Laurel Farrer is an internationally-renowned thought leader of remote work. She has been unlocking the power of distributed workforces for over 15 years.
Sustainability is the incoming wave that companies must catch and ride
Jose Carlos is an international consultant with over 15 years experience in sustainability, evaluation, donor relations, resource mobilisation and international relations. He is a member of several panels and working groups in the framework of the United Nations and the Sustainable Development Goals (SDGs). He is the founder of “Your Chief Sustainability Officer”, a novel sustainability services consultancy.
Why is sustainability important for the future of our planet? Are we “digging our own grave” as UN Secretary-General António Guterres said in his opening address at COP26?
Sustainability is key to ensuring the survival of the planet, our societies and our way of life, even if the latter must change in order to achieve a sustainable future. I would say that sustainability is part and parcel of maintaining our life on the planet as we know it. Sustainability is also a way of understanding the environment, the economy and society. Being sustainable entails a whole new way of understanding your behaviour as a human being, worker, investor or a consumer. Sustainability requires that we challenge ourselves constantly: Am I doing my best to ensure a sustainable environment? Am I contributing to a more equitable economy? Am I considering the stakeholders affected by my actions and activities? Is there a better or more sustainable way to live and work? working? In a nutshell, sustainability brings about a new socio-economic paradigm that calls for a new mindset.
I welcomed Mr. Guterres’s address and his commitment to the global sustainability agenda. He made a bold and determined call to action. In that vein, I applaud the new UNDP campaign “Don’t choose extinction”. It represents the voice of 4 billion people who call for urgent action against climate change. The campaign cleverly uses the image of an extinct dinosaur shaming world leaders into action!
How do SDGs fit in the current sustainability debate?
Regardless of their level of accomplishment, the SDGs have been a major achievement as they represent the first global development agenda. They are a landmark agreement on development, societal, the environmental and economic sustainable targets. The SDGs are a global sustainability road map and as such they are the yellow brick road that society, the private sector and governments should follow in order to secure a sustainable planet for future generations. In other words, the SDGs are the paper on which the international community will write its legacy for forthcoming generations.
The private sector is key to achieving the SDGs. The masterminds of the SDGs and the UN system had one very clear idea in mind i.e. non-traditional development stakeholders had to be part of the process and take responsibility for a sustainable future and planet. It was amazing to see how the idea of public-private partnerships, and engaging with non-traditional stakeholders caught on so rapidly. I have been very lucky to be a part of that breakthrough. It is worth mentioning that it was the first bold call to action to corporations in history.
Why should companies embrace sustainability and sustainable practices?
As stated before, corporations have been called upon by governments and the UN system to support the implementation of the 2030 agenda and the SDGs. The private sector represents approximately 80% of the world’s GDP and at least 80% of the world’s workforce. Without the contribution and commitment of the private sector the world cannot accomplish the SDGs. They are a critical part of the sustainability process and public debate.
What are the incentives for companies to further sustainability and sustainable practices through their operations?
First and foremost, it is the right and ethical way to run a company. However, it is important to highlight a number of compelling reasons why sustainability is moving from a “nice to have” to a “must have”:
- Access to credit and investment: Financial institutions are favouring sustainable companies that can report on ESG metrics according to internationally accepted standards. Increasingly, failure to report on your impacts and risks will increase the price of money for companies. BlackRock’s CEO Larry Fink has led the way in urging companies to embed sustainability in their core business. He has also announced measures and criteria to decarbonise its investment portfolio.
- Access to insurance: Many insurance companies are removing extractive operations and polluting practices from their portfolio. The price of insuring companies and operations will rise dramatically, if available at all, for non-sustainable companies.
- Profitability: Sustainability is inextricably linked to innovation, to out-of-the-box thinking. It promotes new products and services value and increased efficiency that leads to cost savings. This is a key parameter to persuade companies to mitigate pollution, improve social well-being and support the economic sustainability of stakeholders.
What about other motivations which are not directly linked to profitability?
In this respect, I would add the following to the above-mentioned sustainability drivers:
- Talent: The competition for attracting and retaining talent is affecting all kinds of companies and organisations. Many studies show that people want to work for purpose-driven organisations that adhere to social, economic and environmentally sustainable standards.
- Strategic partnerships and innovation: SDG 17 encourages stakeholders to partner with non-traditional actors and to engage constructively with the value chain including the local communities and natural ecosystems. These engagement practices can lead to new business models and novel operating processes. In this way, companies can also establish synergies and economies of scale which would otherwise be difficult.
- Trust among stakeholders: Sustainable companies are more transparent and open to external inputs and constructive dialogues. Sustainability promotes critical and systemic thinking which typically yields good results. Customers and stakeholders at large value trust as a key currency. Sustainability is the best way to build this trust.
- Pre-empting legislation: European and national lawmakers are preparing a set of laws and regulations. It will soon turn into a legislative tsunami that companies need to prepare for and comply with. Anticipating this legislative wave is critical for companies.
Where and how do you think companies should start their sustainability journey?
I think companies should view sustainability as a long-term strategy that guides decision-making and investment options. Importantly, sustainability should not be approached as a marketing/ greenwashing opportunity as this strategy is bound to backfire. Companies can start with coming to grips with the basics of what the broad sustainability umbrella includes and offers. We are not just talking about solar panels and recycling plastic and paper, which is great and the best starting point. The private sector can analyse the opportunities that a sustainability road map offers in terms of profitability, ethical behaviour and business, social, and environmental opportunities. They will learn to embed sustainability in their core business model and to set up a dedicated department to implement sustainability strategies. The establishment of mutually supporting partnerships with a view to achieving sustainability objectives is also key.
In “Your Chief Sustainable Officer¨ we offer the sustainability services and functions that a CSO and a sustainability department would typically perform within a company. We help companies and public institutions to identify relevant SDGs, design and implement sustainability plans and road maps. We insist on the fact that ¨green washing¨ is not an option and that transparency and openness are a must.
What are current sustainability trends and how should companies prepare themselves?
I have been boogie surfing for many years and as such, I would like to answer with a metaphor that reflects my views on the challenges ahead. Sustainability represents a revolution, a new economic/social paradigm and this creates an earthquake. This earthquake has provoked several tsunamis and swells which are the incoming legislation, market trends, banking and insurance ESG criteria requirements, talent competition and the search for profitability. Following the analogy, companies and public institutions are the surfers waiting for the swell to come. Their surfboards are the different techniques, methodologies and required standards to implement and report on sustainability. The wax is the willingness to insert sustainability in the core business. I am the sustainability consultant, the surfboard shaper. It takes effort, diligence and perseverance to get sustainability right but when you do, you will stand upright riding the biggest waves while everyone else may have fallen off the board with the first swell … In “Your Chief Sustainability Officer” we facilitate the implementation of the SDGs and sustainability in your core business. We help you to shape your board.
Geilan Malet-Bates is the Chair of the P27 Green FinTech Forum and a regular contributor to green finance debates and consultations.