Wednesday, 16 January 2013

Bridging the gap - where will we find sustainable leadership?



We need strong leaders to deliver the action required for a more sustainable future.  The existing collection of politicians and business leaders has been unsuccessful in turning the desire for sustainability into swift action and there is now a lag in how long it will take to set in place the necessary prevention, adaptation and mitigation measures to cope with the inevitable changes in the climate.   The 2012 report from the World Bank on climate change, “Turn Down the Heat. Why a 4 degree centigrade warmer world must be avoided”1, is a call to action in order to avoid the potentially catastrophic effects of climate change.  Inundation of coastal areas, greater insecurity in food production due to drought and loss of productive land and more frequent, catastrophic weather events are predicted.  These are likely to impact harshly on the most vulnerable people across the world. 


The fortunate, resource rich, globally powerful minority have the systems and reserves in place to limit and mitigate climate disasters and changes.  The most serious effects of climate change are likely to impact severely on poor, vulnerable communities and individuals.  To mitigate this there needs to be a new wave of leaders who can drive forward long term, global policies with sustainability at their core.  So where can we turn for the qualities needed to halt the progression towards a rise of more than 2 degrees in global temperature? Where will the technologies and innovation come from to deal with the consequences of the changes to the climate already set in motion?  


The world may be full of potential sustainability leaders, but we are likely to be looking for them in the wrong places.  The people who have the insight we need are probably not currently in positions of power or influence.  Many people with the knowledge to improve environmental performance and increase corporate responsibility are working with the people and landscapes they wish to protect, far away from the corporate corridors of power.  So how do we change that, find inspirational sustainability leaders and get them into the positions where they can influence decision making? 


Partly it will be driven from the bottom up.  It is no coincidence that the organisations which have been quicker to adopt sustainability are those who deal with consumer products or are publically listed.  There has been a consumer driven response from large firms to be seen to behave in a sustainable and ethical way.  But for those organisations who are not consumer led, where will the impetus come from to take the required action?  It is hard to visualise where the necessary strength of conviction, passion and drive will come from, particularly considering the wide range of global societal attitudes which influence business decision and policy making.   However, the current growing areas of entrepreneurial and innovative idea creation may hold some of the answers.  


Developing nations are looking to the wealthy, powerful countries to benefit from the business models they have traditionally used.  However, if those models are unsustainable it is necessary to advocate a new business approach.  As emerging economies develop their research and development skills, embark on their own business growth path and build their levels of global influence they are bringing a new set of values and influences with them.  There is a huge opportunity from working with these developing economies to ensure their businesses grow in a way which builds sustainability, equality, accountability and transparency into the very core of their culture.  By working with senior executives from emerging areas of economic growth it may be possible to develop and try different business models, with sustainability enshrined from their conception. 


But it is not only emerging economies which are providing a new type of entrepreneur.  There has also been a huge rise in the number of people from existing business backgrounds working from home and creating their own businesses which fit around the needs of their family or community.  These businesses are often significantly less carbon intensive, attuned to social needs and able to quickly adapt to new technological innovation.  People who have left the workplace to care for young children or older relatives are often highly educated, innovative and skilled individuals.  They are also often highly aware of the needs of the next generation and the pressures placed on the globe by resource hungry economies.  They are providing one of the few growth areas for entrepreneurial activity in a depressed economic climate.  They are also developing new business models which ensure their skills are not lost from the market place through using technology to work flexibly and remotely while they care for the most vulnerable in our society.


There are also an increasing number of social entrepreneurs from across the spectrum of business and society.  From philanthropic projects in wealthy economic hubs, to business start-ups for women in rural poverty there are a huge range of enterprises which are developing across the world aiming to help communities on the ground and empower the most vulnerable people, rather than to simply generate wealth for their owners.


For existing business leaders there is a need to harness the benefits of a more sustainable business model.  One suggestion is to have more diversity on the board of companies.  If businesses recruited people onto their board who are from disadvantaged groups, social campaigns or from developing economies they would have far wider insight into their business’ impacts, a more innovative view of their progress and an opportunity to give some business experience to people who could use those skills for the benefit of their own enterprises and communities.  This enables a positive cycle of improving skills and developing new leaders for business and wider society.


The skills needed for the leaders of a sustainable future are not necessarily those which have been associated with leaders in the past.  It will require people who are good at listening, mediators, those with passion and an awareness of the issues facing those remote from positions of authority, with knowledge of life for the underprivileged and disempowered.  It will also require the ability to build cross party consensus and commitment to cooperative working, to enable longer term decision making and planning (beyond an election cycle or financial reporting period) and a more holistic viewpoint based not on a narrow political, social or business outlook.


By using these skills and looking for leaders outside of the traditional avenues, there may be a way to build the knowledge and creative thinking which can find a sustainable path forward.  These leaders will need to change hearts and minds, bridge social barriers and build consensus led action to limit the worst of the climate’s effects on the most vulnerable people in the world.  The current economic crisis offers an opportunity to take some risks and try out new ways of working yet many companies are suggesting that they are too busy focusing on basic business needs in a harsh economy.   Those are the businesses which will miss out on opportunities and innovation, particularly once the economy begins to recover.  The organisations which are bold and step forward with innovation and new ways of working will be the ones to benefit.   Change or die.  


1 – “Turn Down the Heat. Why a 4 degree centigrade warmer world must be avoided”, A Report for the World Bank by the Potsdam Institute for Climate Impact Research and Climate Analytics, November 2012


Monday, 14 January 2013

Mind the Gap



Bold leadership and innovative decision making is required to deliver the sustainable future that the world aspires to.  Unfortunately such leaders appear to be scarce and there is currently a big gap between stated intention and action on sustainability issues.  While there are reports stating that sustainability is gaining more focus from leaders in government and business, there is also a noted lag between intent and demonstrable results.  


At the Doha UN Climate Change Conference in November 2012 new agreements under the Kyoto Protocol were made. Christiana Figueres called on countries to “focus on the concrete ways and means to accelerate action and ambition” to keep climate change below the agreed 2 degree Celsius rise.  This message seems to have been heard, as a report due to be published by Globe International, who support legislators working on sustainable development policies, is to show that 32 of 33 major economies included in a study have progressed or are progressing significant climate and/or energy-related legislation1

However this news has to be balanced by the recent report by the World Resources Institute which lists the huge number of coal fuelled power stations proposed across the globe, particularly in developing countries2.  This demonstrates that while climate related legislation is starting to proliferate across the world it is often at odds with energy policy and the commercial pressure for energy requirements to be fulfilled quickly, with proven old technologies and with little thought for how low carbon technologies may be a more resilient long term prospect.

To bridge the gap between stated desire and real action will require a cooperative and consensus led move to change how we measure and value our output and the timeframe over which we view it.  Most leaders and decision makers now grasp that sustainability is good for their organisation and the wider world.  Many senior executives across the globe are concerned about protecting security of supply of food and energy, cutting waste and therefore costs and ensuring organisations meet their social and corporate responsibilities.  However the desire for a more sustainable outcome is being thwarted by the short term political and financial outlook of many policy makers and business leaders.  It can also be harder to find the required long term commitment, beyond the potential short term cost savings, when there are varied or non-existent legislative or regulatory drivers. 


A 2011 KPMG progress report on Corporate Sustainability3 stated that the number of businesses with a sustainability strategy is increasing and there is a rising acceptance that profitability increases following the implementation of sustainability measures.  The report also notes the problems businesses face in implementing sustainability programs such as lack of available expertise and poor data or auditing systems, particularly for smaller privately owned businesses.  Large, publically listed, consumer goods firms are those most likely to have sustainability measures in place.  This is mostly motivated by “being seen to do the right thing” alongside the economic drivers of cutting waste and avoiding incidents which lead to prosecution or bad publicity.  However the longer term, more strategic elements such as balancing risks from security of supply and taking a more long term view on return on investment in sustainability measures are often a harder sell.

Senior executives need to grasp the opportunity to use sustainability programs to limit their exposure to risk and increase their resilience to change.  When asked to respond to such a challenge many state they need a clearer and more stable regulatory framework or common auditing processes.  However, it will be those who take the initiative first who benefit from the results.  In a world where the concept and qualities of leadership are excessively discussed there is a need for some key decision makers to really step up and use their leadership skills and have some imagination and drive to become sustainability pioneers.  


The people who take the initiative today will be discussed and quoted in the way that the leaders of the world of technology are talked about now.   The technology leaders who saw how a computer led revolution would change the way we do business were the ground breakers of twenty years ago.  These people were once young visionaries, from outside the conventional business world, who identified and capitalised on a new way of working.  This would indicate that the key movers and shakers in a sustainability-led change to business may well come from outside the traditional corridors of power. 

However, if we are to find a way to continue improving the quality of life for every human on the planet, while limiting our climate change to less than 2 degrees, these new leaders of sustainable capitalism need to stand up and begin the innovation-led drive for change now in order to prevent the grave risks from potential climate related disasters listed in the World Bank Report on avoiding a 4 degree rise in global temperatures4.  This alarming call to action requires immediate strong leadership to meet the challenge it issues.  Where will those leaders come from? It is very possible they will come from somewhere unexpected.

References
1 – “GLOBE Climate Legislation Study”, 2013

2 – “Global Coal Risk Assessment: Data Analysis and Market Research”, WRI Working Paper, World Resources Institute, Washington DC, Ailun Yang, and Yiyun Cui. 2012

3 – “Corporate Sustainability, a progress report”, KPMG International in cooperation with the Economist Intelligence Unit, 2011

4 – “Turn Down the Heat. Why a 4 degree centigrade warmer world must be avoided”, A Report for the World Bank by the Potsdam Institute for Climate Impact Research and Climate Analytics, November 2012