What's fundamentally reshaping business? Look to high school chemistry
The global business context appears to be on the cusp of fundamental changes in expectations — of stakeholders and, in some parts of the world, of governments and regulators.
This context has the attributes of a super-saturated glass of salty water — in which one final added crystal fundamentally can shift the characteristics, thereby changing the overall operating environment. Such a shift could alter expectations of companies, notably in relation to climate change, water, deforestation and other natural capital related issues.
The analogy is apt. Think back to your high school chemistry class lesson on super saturation — when water is boiled with more salt than can dissolve at room temperature. The glass vessel is removed from the burner and just one salt crystal is dropped into the liquid. Within moments, a change is underway — from salty water to a salt crystal chunk.
It appears that we are similarly reaching of transformational point within the overall business context — following on years of slight changes that may be culminating in a fundamental shift.
Consider a set of dynamics across several domains.
The (atmospheric) climate has changed
In a climate-changing world, we see more businesses grappling with what it will mean for operations and staying viable as a firm. Leading companies are also working to design the problem (of greenhouse gas emissions) out of their business systems.
And so Apple, Amazon, Facebook, IKEA, Salesforce, WalMart, Starbucks, Nike, Unilever and a growing number of companies are making 100-percent renewable energy commitments, as is documented and enabled by RE100. Companies are also beginning to make real commitments that reach through their supply chains, such as General Mills did in stating that it would decrease emissions by 28 percent in the next 10 years throughout its supply chain (which includes farmers, producing the food).
For corporate decision-makers, the question is: How many corporate climate commitments, which are science-based and time-bound, need to be made before it is the expected modus operandi, among investors, insurers, regulators and even consumers? And how is my company engaging?
The modern industrial product context is shifting
In a finite world — in which rare metals for our beloved touch screens are running low (in terms of those that are relatively easy to extract) and our ability to "clean" thoroughly polluted waters, lands and food chains is limited — it is not surprising that companies are looking at inputs that are net positive impact or highly recyclable and circular economy approaches (which are also running on renewable energy sources, of course, as per the first issue).
Corporate work on these issues is not new, as early adopters’ progress shows, such as Nike’s Sustainable Materials Index and Interface’s carpet tiles and Mission Zero, among others. In addition, important insights and inspiration have been drawn for more than a decade by sustainable product design concepts and applications, such as mimicking nature’s approaches to solving design challenges (biomimicry); thinking "cradle to cradle"; embracing principles of green chemistry and seeing design innovation as an opportunity for dematerialization, substitution and humanization.
The next steps likely will be seismic, as the ground is well and truly prepared at this point. The winners will be the innovators, those who fear not a lack of precedent — but see only opportunity. Disruptive innovation will become the norm.
For corporate decision-makers, the question is: How are we onboarding these sustainable design and production ideas in our business, so that we stay up-to-speed on innovation gains?
Seeding efficiency and resilience literally may include seeds (of trees)
Businesses ultimately depend on green infrastructure, which is literally rooted in well-functioning ecological systems (ecosystems) that enable flows from nature — such as oxygen, reliable access to freshwater, productive soils in which to grow food and other things that are literally the rootstock of people and businesses.
As Jared Diamond has pointed out in great detail in "Collapse," we disregard these linkages between our socio-economic systems and ecological systems at our own peril. History illustrates the need to invest in maintaining natural systems.
Companies are beginning to take heed, although in more fits and starts and pilot-testing ways, which need to be ramped up.
For example, Dow has almost two decades of U.S. data to show how well a wetland can naturally filter water and improve quality — at a tiny fraction of the cost that a built wastewater treatment plant can do the same job. Coca-Cola has concluded that maintaining a key input to their product (water) requires corporate investments in reforesting and revegetating watersheds far upstream from bottling facilities. Apple sees innovation and leadership opportunities by investing in trees and forest management approaches that sustainably can address the raw material flows needed for packaging, including 36,000 acres of forestland. The list goes on.
For business people, the question is: How are we assessing ways in which we depend on, and need to invest in, well-functioning watersheds and ecological systems? Is my company to starting to pilot test green infrastructure solutions and invest?
Respect of human rights is fundamental
Being respectful of human rights, workers' rights, and (because it has not been historically obvious) women’s rights is not just a good idea; it is the law in an increasing number of places. And where it is not the law, it is becoming the expectation of multinationals engaged with supply chain partners, of investors, of insurers and of NGOs.
The commitments of companies to human rights as well as investments in initiatives such as the HER Project are laudable. Clearly, the ante will continue to be upped. Treating people in a way that is in accordance with the United National Declaration on Human Rights still has a way to go. It is a path that both advocates and a growing number of companies realize is key. Mistreatment is just bad for business.
For companies, the question is: How do we ensure respect for human rights throughout our business systems?
The sum is becoming greater than the parts
The notable moment in time that we’re is one in which all pistons are firing. All of these issues now have a head of steam. All are being applied in some way in businesses. All have a growing number of experienced professionals ready to advise and engage with companies seeking to make changes.
All of these people as well as corporate pilot tests should be seen as the proverbial grains of salt in the glass of water, which is the current business context.
At some point, the chemistry of super saturation will occur — all of these grains of salt fundamentally will change the water into a different form. A very different business context will result, in which companies are expected to be acting on climate change; sustainable design and production processes that address toxicity and water use; green infrastructure and human rights.
The opportunity for companies is to engage on multiple dimensions concurrently with a focus on synergies and ways to succeed in an evolving business context.
It is now a matter of seeing that the salty glass of water is increasingly full — with opportunity for those who engage.