Businesses must adopt a transformative mindset to build resilience if they are to meet their ESG/sustainability goals against a backdrop of increasingly disruptive climate crises, highlighted a new report.
The latest Future of Sustainability report, from international sustainability non-profit Forum for the Future’s, entitled “Courage to Transform“, comes on the back of a series of unprecedented and extreme weather events, including wildfires across hemispheres, record-breaking heat waves in Europe, and intensifying air pollution and flooding in Asia. It recognises the extremely challenging operating environment businesses face right now, underpinned by growing geopolitical tensions: from inflation and price volatility, rapidly changing reporting standards, to an increasingly politicised ESG agenda.
In a bid to enable leaders and change makers to stay focused on transformation, the report analyses examples of how businesses are responding to today’s ‘polycrisis’ (defined by the World Economic Forum as a cluster of related global risks with compounding effects) and highlights four very different yet plausible ‘future trajectories’ as a result.
These include scenarios where maximising shareholder value, above all else, remains the top priority for businesses; actions are being taken but fall short of creating lasting impact; data and tech are seen as ‘silver bullet solutions’ but in an over-reliant way; and, lastly, businesses fundamentally rethinking their responses to sustainability challenges.
FIVE RECOMMENDED SHIFTS
The report recommends for five shifts in how businesses operate if they are to manage the systemic risks associated with an increasingly disrupted climate. The five shifts for leaders and change-makers, include:
- From a risk prevention mindset to a transformative one, which involves seeing opportunity, not risk, in change, while investing in both climate adaptation and mitigation measures.
- From addressing the symptoms of our social and environmental crises to tackling their root causes, moving beyond incremental solutions that are likely to fail.
- From passively responding to their operating context to actively shaping it. From influencing policy to better engaging stakeholders and customers, businesses must increase their agency to drive change.
- From slow centralised decision-making to more agile distributed governance models. Instead of consolidating power, businesses must distribute responsibilities and value creation across multiple levels and stakeholder groups.
- From failing to acknowledge the influence of individual, organisational and contextual bias to identifying and removing this bias in risk assessment. Businesses making this shift will see more equitable and balanced decision-making longer-term.
TIME FOR BUSINESSES TO STEP UP
“The Future of Sustainability offers a way of navigating the growing polycrisis. We need to shift our focus from mitigating risk to building resilience,” stated Dr Sally Uren, Forum for the Future’s Chief Executive. “While our analysis shows four possible futures emerging for business, we feel only one has the potential to create the socially just and regenerative future we urgently need. Realising this future will mean focusing on five key shifts.”
“Pressure on businesses to step up is mounting”, continued Dr Uren. “This report fills a gap in guidance on what action can be taken when the headwinds are getting stronger and stronger. The five shifts Forum has outlined will enable businesses to deliver on the transformational agendas so urgently needed. Whether it’s by seeing opportunity in change or actively influencing the broader political, economic and social operating context, businesses can lead if they find the courage to do so.”
Produced with support from Bupa, People’s Postcode Lottery, Green Trust, Aldi Süd, The Crown Estate and Henkel, the report draws on in-depth desktop research, interviews with business leaders and ‘signals of change’ generated through the online ‘Futures Centre’ hub: an open-source participatory platform powered by Forum that tracks and makes sense of change.
ACHIEVING ESG GOALS AGAINST BACKDROP OF DISRUPTION
James Payne, Forum for the Future’s Global Strategic Lead – Purpose of Business, believes that “there’s not enough focus right now on how businesses can most effectively achieve their sustainability goals against a backdrop of ongoing disruption. Futures tools, as used in this report, can help leaders to anticipate and respond in smarter ways to the volatility ahead. Understanding the different futures you could face clarifies the role your business could play in creating them.”
Bupa Group’s Group Director of Sustainability Glyn Richards, agreed: “More than ever before, there’s an expectation that businesses should be proactive and be delivering meaningful change when it comes to sustainability. For a long time, this agenda has been treated as separate to commercial priorities, global market developments and regulatory pressures, but it’s clear that sustainability needs to become part of the decisions and discussions impacting future business success and efficiency. As a healthcare company, that could mean focusing on helping people stay well and encouraging healthy lifestyles – which could benefit patients, as well as the planet.”
Download the Future of Sustainability report here.
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