New report calls for 'extended leadership' on sustainability
Each year, the Worldwatch Institute publishes its flagship State of the World report. The 2013 edition is organized around whether sustainability is still an attainable goal. In the opening chapter, Worldwatch President Robert Englemen asks starkly, "In the wake of failed international environmental and climate summits, when national governments take no actions commensurate with the risk of catastrophic environmental change, are there ways humanity might still alter current behaviors to make them sustainable? Is sustainability still possible?"
This is similar to the starting point for a new report from SustainAbility and GlobeScan, Changing Tack: Extending Corporate Leadership on Sustainable Development. The report is the final, summative output of The Regeneration Roadmap, an 18-month project designed to assess progress on sustainable development during the last 25 years, and to consider how to more thoroughly accelerate and scale such progress in response to the growing urgency of economic, social and environmental challenges today.
Not surprisingly, Changing Tack finds that the macro picture isn't very good. Despite decades of well-intentioned effort and dialogue, as well as genuine improvement in social and economic welfare in many parts of the world, nearly every metric of global environmental health is still moving in the wrong direction, while inequity, volatility and political upheaval continue to cause damaging social disruptions in rich and poor countries alike. Taken together, these trends threaten to undermine or reverse progress on development more generally, and to severely constrain opportunities for future prosperity.
This is the sustainable development challenge in a nutshell, and Changing Tack joins a chorus of voices proclaiming we still have a long way to go to improve the overall outlook. That perspective doesn't overlook the great number of positive examples and trends we do observe, which, even if not yet adequate in macro terms, are both encouraging and important. Indeed, real change is often the result of years and years of trial and error, accumulated effort and plenty of starts and stops along the way. As such, it is likely that we wouldn't recognize a meaningful tipping point on sustainable development until well after it has occurred. Still, it is not radical to acknowledge that more and faster progress is needed in order for civilization to outrun the worst of what the future may hold.
Business to the fore
While acknowledging the vital role of both civil society and governments in driving the agenda early on, Changing Tack recognizes the increasing role and importance of private-sector leadership today, and while others (particularly governments) cannot be left behind, we see the private sector as having the greatest potential to drive forward progress in the short term.
This conclusion is partly a response to stubborn reality: as Rio+20 and recent climate change summits have proved, governments are still largely incapable of delivering meaningful, enforceable international policy frameworks for critical issues, and civil society organizations (for now) lack adequate influence and resources to compel them to do so. It also rests on the view that business has both the reasons and resources needed to chart the course toward a more sustainable global economy, and to pull governments, consumers and other critical actors along with them.
Building on this view, Changing Tack's central conclusion is that leading global companies – many of which already have embraced a significant commitment to sustainability – now have both the imperative and opportunity to demonstrate "extended" leadership, in order to accelerate their own and others' progress. This refers specifically to the ways in which companies can further focus and optimize their own strategy and actions on sustainability, while also extending their effort and influence in order to reshape the larger systems – industries, markets, cultures – of which they are a part.
To guide companies on this journey, the report prescribes concentrated effort across six attributes of extended leadership, or those things that businesses not only can control and do directly, but also apply effectively to reshape larger systems, so that business and society generally may continue to thrive.
Vision is the articulation of a company’s unique role in and contribution to a sustainable future. It is best when it is a direct evolution of the existing core vision of the firm, aligning the business’ identity, culture and competencies, and the way it creates value, with fundamental sustainability needs or challenges. It describes a compelling and relevant destination for the organization and inspires employees, partners and other stakeholders to help achieve it.
Goals help define the destination expressed in Vision and establish waypoints on the journey. When they are ambitious and specific, they boost stakeholder trust and engagement and help unlock both competition and collaboration to drive innovation. Absolute and science-based goals are particularly important for the way they require companies to shift from reducing impact intensity — which may obscure or ignore that overall impact is still rising — and act on the best available science to improve operations in ways that resolve underlying system challenges.
Offer calls on companies to evolve the nature and substance of their core propositions — their products, services and the business models that underpin them — to deliver on their vision for sustainability. This requires developing products and services that push the boundaries of different and better. Better brings cleaner, more efficient, more socially conscious products and services to market; different entails fundamentally new approaches to value creation plus products and services that account for externalities.
Brand is the effective expression of Vision, Goals and Offer through a compelling brand promise and communications. It creates opportunity to engage and reshape fundamental values and mindsets. Brand brings the intangibles underlying consumer loyalty into play, with the implication that emotions and social norms affecting consumer preference might enable companies to create more demand for sustainable products and services.
Transparency means providing relevant, appropriate and timely signals to all market players in order to optimize their understanding and decision-making, and ensure proper functioning of markets. This requires further and faster evolution of traditional corporate sustainability reporting, plus new approaches better able to engage, inform and influence.
- Advocacy is about business helping to shape more sustainable behavior and choices across the economy. This means mobilizing others, including policymakers, other companies, investors and consumers, to help reform policy, market incentives and other system conditions to drive sustainability further (and faster) into the mainstream.
Even in the face of present challenges, we remain optimistic that we can shape a sustainable economy by mid-century. This will require putting the pre-conditions in place during this decade to allow exponential progress from 2020 through 2050. Changing Tack describes what is required of business particularly, in order to set the stage. We hope more companies heed its call.