The Next Economy
Q&A:
Will We Go 'All In'? The Past, Present and Future of Sustainability Leadership

Written by three leading thinkers in the field of sustainability — Chris Coulter, CEO of GlobeScan; David Grayson, Emeritus of Corporate Responsibility at Cranfield University School of Management; and Mark Lee, Executive Director of SustainAbility — All In: The future of Business Leadership (Taylor & Francis, 2018) identifies the essential attributes of high-impact corporate sustainability leadership and describes how companies can combine and apply those characteristics for future success. It draws on research involving thousands of experts globally as collected via the GlobeScan-SustainAbility Leaders Survey over the past two decades. The book also reveals insights from dozens of interviews with Chairs, CEOs and Chief Sustainability Officers of pioneering companies — including 3M, BASF, BP, DuPont, Google, GE, Huawei, IKEA, Interface, Marks & Spencer, Natura, Nestlé, Nike, Novo Nordisk, Patagonia, Shell, Tata, Toyota, Unilever and Walmart — explaining how they have gained recognition, created value and boosted resiliency based on their sustainability leadership.

All In offers current and aspiring business leaders a succinct overview of the most important developments and trends in corporate sustainability and responsible leadership, sketching three core catalysts behind the movement; five essential leadership attributes, and examples of such leaders in action today; along with past, present and future eras of sustainability leadership. The book will appeal to private sector leaders and others interested in why sustainability has become a critical mainstream business issue.

We caught up with Coulter, Grayson and Lee to dig deeper into some of the book’s themes, ahead of its official release this week at SB’18 Vancouver.

There have been many articles, books and analyses on the ‘secret sauce’ of successful sustainability leadership. What made you all decide to write a book on the subject? And why now?

There is plenty of evidence pointing to simultaneous loss of trust in big business and widespread hunger for more positive business leadership to tackle the kind of systemic global problems inherent to sustainability or sustainable development. There is also plenty of evidence that many business leaders want to address this — but many are unsure how to do so effectively. And there is the serious situation of a deteriorating global ecosystem, fractured societies projecting at least xenophobia and sometimes outright discrimination and racism, and worldwide problems with inequity in terms of access to needs like housing and healthcare as well as income/wealth on personal, regional and national levels — what one of our All In interviewees called ‘the threat of hyper global inequality.’ All of this suggests that we have yet to crack the code. As authors we believe it is important and urgent to do so. All In is our effort to help business and society move forward.

Writing a book forces authors to refine and define their ideas. All In is no exception and we feel we have, through close analysis of the approaches of leadership companies past and present, identified (or at least redefined) the elements of the kind of guidebook private sector leaders need to create more and more resilient leadership companies in the future.

In the book, you posit that “a growing wave of populism and social unrest may compel governments to force changes on the private sector … if businesses and society do not prepare effectively for the job losses coming from automation and the Fourth Industrial Revolution.” How do you think they can do this?

Businesses should anyway be regularly scanning the horizon, looking at the external environment, considering global trends, asking “what if” questions and scenario-planning. In the case specifically of artificial intelligence (AI) and potentially rapid and widespread redundancies, boards and senior management teams need to engage with stakeholders and experts to understand possibilities. They need to define principles to guide decisions and actions addressing the responsibilities they have for stakeholders including employees, suppliers and communities who may be negatively impacted by AI and automation. In the UK, for example, the responsible business coalition Business in the Community has worked with Accenture to define some principles. Their 2016 report, A Brave New World?, suggested businesses need to develop action plans in partnership with employees and other stakeholders.

Businesses can also contribute to ensuring a more informed debate: e.g. should we really be talking about AI — or IA (Intelligence Augmented)?

Further, companies need to understand that the vulnerability and insecurity of citizens in many countries have increased. Without proactive leadership from business — the institution that employs the most people in society and has the biggest impacts on economic development — populist pressures and regulatory responses will be inevitable. Getting ahead of this now and building a more inclusive, responsible and sustainable economy is a priority for all business leaders. This requires thinking out of the box. One of the next-generation entrepreneurs we interviewed — Helen Hai, from China — who runs businesses in Africa, shared her ideas for creating sustainable employment in Africa to tackle three “wicked issues:” (1) African youth unemployment, (2) Europe’s economic migration crisis and (3) manufacturing jobs moving out of China as the Chinese economy matures.

Chicken or egg: In this new Purpose-Driven era, how much do you think continued progress toward sustainability in business will depend on consumer demand vs companies convincing consumers to demand/expect better products?

It is chickens and eggs! In our book we quote Nike, which sees Innovation = Sustainability and Sustainability = Innovation. There are plenty of business drivers for e.g. switching to circular economy models. Businesses can nudge changes in consumer behaviour directly through choice-influencing and choice-editing; and indirectly, through advocacy for pro-sustainable development public policies such as tax and regulatory changes to encourage sustainable production and consumption.

Extreme global connectivity nowadays also means that consumer pressures on business can also build very rapidly. Just look at the speed with which consumer concern about single-use plastics and ocean plastics has built up.

We also must be clear-eyed in looking at how much effort and acumen has been applied to date in engaging consumers. Very few companies have invested fully in this conversation. We know that we need to shift to sustainable living to hit the SDGs, let alone create the world we all want. This will require wholesale shifts in how we live, shop, move, etc. Brands should see this as an especially opportune moment to build deeper relations with their customers, create new sustainable products and services (there is an estimated $12 trillion value to business embedded in their helping achieve the SDGs) and help society adapt to a more sustainable footing.

If we took even a small portion of all the advertising revenue in the world, applied it to engage consumers around new ways of living, leveraged all the expertise at a company’s disposal to sell this, and worked with governments to create the right policies to drive change, we might well get to where we need to go and see consumers respond. One of the collaboration examples we highlight in All In is the Consumer Goods Forum (CGF). There are exciting opportunities for trade associations like the CGF to stimulate innovation for sustainable production and consumption.

Speaking of sustainable consumption, as demand increases for naturally derived/produced products, for example, is there really a way for all businesses — particularly those with global supply chains — to continue to operate at scale, not only in a ‘do no harm’ capacity, but in a regenerative capacity? Considering impacts to biodiversity, communities, etc, does the “big business” model have a place in a sustainable/regenerative future business world?

Yes — and those big business models will continue to evolve, too. Consider, for example, the developments in personalized medicines and food since the mapping of the Human Genome, or ideas that we heard from Marks & Spencer for customised clothing. Technological advances like 3D printing make small-scale batch production, production on demand and more localised production economic. Our book, for example, is being printed in several different locations to meet local, bulk orders.

And more to the point, what choice do we have? In All In, we quote Unilever Chief Marketing Officer Keith Weed, who says: “When people ask for the business case for sustainability, I say I’d like to see the business case for the opposite!” All the evidence suggests that we need to regenerate natural ecosystems, let alone communities. We must find ways to do this, and there are early examples from e.g. Patagonia’s work in raising bison in ways that will support regeneration of biodiversity, atmospheric health and water tables. There is also Interface’s Climate Take Back approach. Interface says ‘we shouldn’t just minimize our impacts on climate but fully reverse those changes.’ Such efforts will require collaboration at scale and innovation at scale.

Building on the above … As Patagonia’s Rick Ridgway says in the book, we need “a new form of capitalism that doesn’t rely on annual compounded growth.” What do you think it would take for this idea to take hold and help shape a new business as usual?

There are plenty of mainstream business leaders who are working on the renewal of capitalism to make it fairer, more inclusive and sustainable. In the book, we quote the work that Tata is doing with McKinsey Global Managing Partner Dominic Barton and others in Focusing Capital on the Long Term. We also quote the letter to corporate CEOs from Larry Fink, the head of BlackRock — the largest institutional investor in the world — in which he says: “Society increasingly is turning to the private sector and asking that companies respond to broader societal challenges. Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers and the communities in which they operate. Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders."

There are, anyway, numerous different varieties of capitalism and none of them are fixed in concrete. They are constantly evolving and if — as we hope — many more businesses follow the example of the leaders we quote in All In, then that will change capitalism towards something more sustainable, more resilient to future shocks.

As Paul Polman noted in his Afterword, we must find ways to create more long-term and systemic thinking and that will require a focus on the next generation of business people to cultivate this new mindset.