That’s the intellectual case sorted. So far so good.
But what does that actually mean in real life? How can we, at home and at work, do our bit to secure the future of humans as a species? Those questions were the focus of Leidar’s event last week in London, with speakers from HSBC and Octopus, alongside a leading sustainability consultant.
The event started with Lukasz Bochenek, head of our international team, giving a run-down of Leidar’s latest research, which we carried out in conjunction with Polecat. The research looked at the current and future risks of applying – or more importantly not applying – the environmental, social and governance criteria and the UN’s Sustainability Development Goals holistically across a business. It also found that focus has been put on the environmental SDGs, with much less emphasis on the human ones.
Our speakers were Brendan McNamara, Head of NGO Engagement at HSBC, Charles Perry, Founder of Sustainable Future For All and Jennifer Viccars, Marketing Director at Octopus Investments.
The main discussion was around what companies need to do to be more sustainable. And we had three different answers: the incremental approach, increased regulation and making sustainability a central part of everything an organisation does.
Brendan McNamara talked about embedding sustainability into large organisations through performance management and incentives. For example, HSBC has a values threshold and if you don’t cross that, you’re not eligible for additional financial reward.
He cited two more examples from elsewhere.
When he was at a UN Global Compact meeting in Madrid, a large Spanish manufacturing company talked about how their procurement team is incentivised by having variable pay linked to suppliers’ ESG scores.
And the Hong Kong Stock Exchange is introducing requirements for its listed companies to report on environmental and social issues.
As Brendan stated, “It might sound terribly boring but these things are happening and they’re making a difference. It doesn’t have to be a big bang. It might not be happening as quickly as people might like. But in five years’ time, you’ll see a substantial change.”
For Charles Perry, the role of regulation is critical: urgent change needs fundamental regulation shift. However, at the same time, each organisation needs to accelerate “making sustainability second nature” for its own survival, by being vision led and values driven.
He argued that the playing field is set by the regulators and companies have to play to the rules they are given and see how they can out-compete the others. Unless that playing field changes, they’ll just go back to their old ways.
He was integral in developing BP’s Beyond Petroleum approach. But the company later went back to petroleum (after he left) because they realised that wind and solar farms weren’t moving the share price: few in the City cared about BP’s wind and solar assets. For the vast majority, it was Business As Usual (BAU): hitting upstream oil and gas extraction targets every quarter.
Charles also believes GDP is a perverse measure of a country’s prosperity. A broader Sustainable Growth/Development Indicator would be much more revealing and accurate.
“If the system enforces bad behaviours, values and attitudes, we’re going to get stuck in a vicious cycle of human decline and our very species may not survive,” Charles warned.
Sustainability at the core of everything
Jennifer Viccars is in a hurry and wants fast change. She hates sustainability departments. They are always an add-on and enable everyone else to shrug off responsibility for sustainability.
Instead, we should focus on “plus one”. It’s not much, just one. It’s about everyone having the attitude that whatever we do needs to not be net zero or impact neutral but plus one. After years of borrowing from the planet and from society, we now need to make sure everything we do in business puts backone more than it takes.
Businesses are complex organisms of people, systems, processes and products. We need to add the plus one mindset to everything to get the compounding effect of change.
Another example is what Mark Carney is doing to find a framework for reporting on progress on the SDGs. We’re all used to reading company accounts, which make it easy to compare financial performance. We need a similar highly measurable process for reporting on societal and environmental impact.
In fact, as Jennifer said, “Business can make more happen than government, and more quickly.”
Whichever approach, or combination of approaches, is right for you and your business, think hard about what you and your business can realistically do — and get on with it quickly.
While getting on with it is of course the most important thing, you also need to make sure your stakeholders understand what you’re doing to make your business as sustainable as possible. That could be the Hong Kong Stock Exchange, if you’re listed there, or your shareholders, your customers and your suppliers.
If you’re doing it properly, you’re also in the position to be an advocate for sustainability in your industry and wider: the leadership position you can take will set you apart from your competitors. It will also help mitigate any potential risk. There is a lot to be said for both doing the right thing and being seen to be doing the right thing.
The final word goes to Dr Suess’ Lorax: “Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.”