Here are the 10 things business should do to help save the planet.
1. Develop a long-term visionIn a time of rapid environmental, social and economic change, short-term corporate planning horizons represent a risk to company value creation and resilience. Investing in understanding the long-term risk and opportunity picture, and building organisational capability to adapt to changing circumstances, is key not only to business success but will transform companies into forces for good. Businesses should develop visions for the long-term that is aligned with sustainability priorities, such as the UN Global Compact principles and the Sustainable Development Goals (SDGs).
2. Redefine the company purposeRethink the purpose of the company to ensure that it meets the needs of the 21st century. Abandon ‘shareholder value’ as the dominant business philosophy and the long-held view that business is purely about maximising short-term profit. Replace it with the principle that business can and should balance profit with broader value creation that serves the interest and needs of stakeholders and society at large.
3. Aim for net positive valueAssess the company’s environmental and social footprint, determine and manage material impacts so as to ensure that the company delivers net positive value across a broader set of ‘capitals’ beyond financial. Use the framework of the new Sustainable Development Goals to assess how the company contributes to societal goals, and respond in strategy with targets aligned with science (e.g. the Planetary Boundaries framework).
4. Establish a strong accountability systemGood governance is a precondition for demonstrable results. A good accountability system involves formalising board oversight of non-financial performance, adopting governing documents on material issues, linking executive compensation to non-financial performance (e.g. GHG emissions and energy efficiency) as well as engaging actively with stakeholders, including regular dialogue with own employees.
5. Set in motion the transitionPlan the shift towards a sustainable mode of business which penetrates all aspects of production and operations, towards a circular ‘cradle to cradle’ approach. Embed sustainability in core business decisions, processes, management systems and culture, and extend requirements to suppliers to drive sustainable practices amongst smaller companies. Set clear and measurable targets (e.g. on emissions reduction) so that performance can be monitored, and pursue third party evaluation for trust and credibility of approach and outcomes.
6. Advertise responsiblyCorporate advertising practices drive excessive demand, and companies have a responsibility to stop fuelling senseless consumerism and delink human worth from acquisition of material goods. Business should take bold steps to move towards more value-based and sustainable marketingand encourage responsible consumption.
7. Embrace transparencyWith 6 billion smartphones expected on the market by 2030, combined with the continued explosion of social media platforms, the Internet Age’s demand for radical transparency is here to stay. Companies should openly communicate material non-financial impacts – both good and bad – thereby getting a jump on competitors and regulators, and score points with consumers that look for responsible products / demonstration of social and environmental performance.
8. Look for opportunities
9. Lobby responsiblyPolitical leaders have a tough time making the bold political decisions needed. Business leaders can de-risk political decision-making by publicly voicing support for regulation that is aligned with sustainability priorities. Companies should urgently stop lobbying against climate change regulation.
10. Nurture collaborationIn a world of increasingly complex, multifaceted and trans-border challenges, more organisations are realising the value of collaboration. Companies, particularly those operating in high-risk regions (e.g. suffering from severe water scarcity or heightened risk of conflict), will benefit from engaging with peers and others to share experiences and know-how, and best-in-class approaches to shared value practices benefitting the company as well as the community of operation. More than ever, stakeholder engagement is vital for building trust and can add credibility to new solutions offered in the market place.
A future by design
One thing is certain. Change is coming, whether we like it or not, either ‘by disruption or by design’. COP21 marks an historic opportunity to ensure a smooth transition towards a future that is better, brighter and more desirable for all of humanity.
This is not only the most fundamental moral obligation of our generation; it also makes business sense. Proactive businesses that embark on the transition early will be more resilient to change, whether regulatory, environmental or other. Moreover, the path to a sustainable future is paved with opportunity. No doubt, the companies that will excel in the coming decades are those that will manage to combine the pursuit of profit with meeting societal and environmental needs.
But there is also a far nobler and more inspiring motivation. In 1919, a group of business leaders and financiers met to establish the International Chamber of Commerce, determined to bring economic prosperity to a world that was still suffering from the devastation of World War I. They called themselves “the merchants of peace”.
Perhaps time has come to revive the business statesmanship of the past and go back to the original purpose of business to build nations, and through trade strengthen connections among the peoples of this world, so as to foster stable, prosperous societies where both people and commerce can flourish.
This article is a synthesis of findings from two reports: ‘A Safe and Sustainable Future: Enabling the Transition’(DNV GL 2014) and ‘IMPACT: Transforming Business, Changing the World’(DNV GL and UN Global Compact 2015), as well as interviews with several hundred international experts including those profiled in the two books NEXT: A Safe and Sustainable Future (2014) and NEXT: Sustainable Business (2015).
Author: Cecilie Hultmann and Anne Louise Koefoed, Authors at DNV GL Blog