Tuesday August 21, 2018
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Aron Cramer
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Jacob Park
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Eric Olson
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Elisabeth Best
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Climate Change
The turbulent planetary changes we have unleashed—and our collective response or lack thereof.
Technology
Powerful new technologies that are poised to redefine the nature of work and create urgent philosophical questions about humanity.
Structural Economic Change
Mounting pressure to equitably meet the needs of a growing, urbanizing global population at a time of massive change.
The Implications for Business
The wave of changes sweeping our world is coalescing to create a new operating environment for business. In BSR’s 25-year history, there has never been a time when companies everywhere have faced such all-encompassing change. Nearly every business we know is asking itself fundamental questions about the nature, shape, and future of its business.
Redefining Sustainable Business: New Agenda, New Approach, New Advocacy
We believe it is time to redefine sustainable business. It is time for business and other partners to embrace new issues, new ways of pursuing sustainability, and a new—and more assertive—voice. The shifts in the environment, technology, and economics suggest the need to emphasize a new set of issues. Moreover, the variations on familiar topics present different questions today and will continue to do so into the next decade.
New Agenda
First, business needs a new agenda. This should include areas where sustainability issues have converged with business issues and where new topics have emerged, and it should allow for the reinvention of sustainability to meet the needs of a new reality. The starting point for these topics is the need to face head on the three systemic changes affecting business: climate change, technological innovation, and the structural economic change.
These conditions create three big issue sets that we believe need to be front and center on the business agenda—not only for sustainability reasons, but because these questions will be increasingly central to business performance. They will dominate the global public debate. And they will define the economic vitality of people, communities, and the world.
Sustainable business leadership will come to be defined by how well companies approach the following three issues:
Climate Resilience
The Challenge
The impacts of climate change are being felt today. Extreme weather has introduced new levels of financial, operational, and human vulnerability.
Companies need to build resilience in the face of climate change, water scarcity, and related disruptions, both in their own operations, infrastructure, and supply chains, and in the communities in which they operate and invest.
The Opportunity
Attending to this issue will mitigate risk, ensure business continuity, and involve business in parlaying its skills and knowledge as part of the overall climate solution.
The Uncertainties
Creating resilience requires broad collaboration for a benefit that cannot be predicted with certainty. While some aspects of resilience can be measured tangibly (e.g., infrastructure that can withstand extreme weather), other elements of resilience are difficult to measure (e.g., community resilience).
Additionally, climate resilience efforts will be influenced by many uncertain factors, including the policy landscape, the ability of stakeholders to coordinate, the pace of mitigation efforts, and the development of new technological solutions.
Technology, Human Rights,
and Ethics
The Challenge
New technologies continue to offer world- changing benefits in terms of health, connectedness, efficiency and productivity, transparency, and access, with business models to match. They also present fundamental questions about identity, privacy, and security, with new norms usually evolving more slowly than the technologies.
Companies need to develop human rights policies and practices that address big new ethical questions about the application of new technologies. Almost every business today depends on using personal data. Almost every company is exploring the use of artificial intelligence, augmented reality, and other technologies, and there is very little agreement on how to apply these tools fairly.
The Opportunity
Business has much to gain through these innovations, and many technologies can also unlock solutions to climate change and other societal issues. Business also has much to lose if society does not accept these big innovations. Individual companies need a clear-eyed assessment of how to ensure that technologies are adopted consistent with human rights principles and in a way that contributes to building social consensus so we are all able to capture the benefits of a connected world.
The Uncertainties
Human rights principles were largely developed 75 years ago, in a very different reality from ours. In addition, technology moves faster than social norms and official regulations. This leaves gaps in our understanding of the implications of technologies that bring profound change and creates strains for a global governance system that is not able to anticipate and address new technologies.
Additional uncertainty exists around the potential capabilities of artificial intelligence and how quickly these will be developed and deployed. We also have yet to fully understand consumer attitudes toward these new technologies and the technical feasibility of ensuring alignment with ethical and human rights norms. Business has a key role to play in proactively considering these issues and building social consensus around best practices.
Inclusive Automation
The Challenge
By many accounts, we are at the dawn of an economic transition as profound as, or more profound through the transition from an agricultural economy to the industrial world.
This new world—especially when coupled with a global economy experiencing fundamental demographic change— means that the need to generate quality employment in an era of automation is fundamentally important.
The Opportunity
Automation presents opportunities to increase efficiency on a massive scale while improving work safety and other benefits. Business has much to gain if it develops a clear vision of what it can do to generate quality employment and participates in a broader discussion about a social contract fit for the 21st century.
The Uncertainties
For the first time since the industrial revolution, labor and economic productivity appear to be delinked. The implications for individuals and societies are immense. And even if the most dire predictions fail to materialize, there is little doubt the nature and amount of work is shifting faster than people can adapt. If business is only the propagator of change that society rejects, we all lose.
How the quest for inclusive growth plays out in the coming years will be shaped by critical uncertainties, including the capabilities of automation, government intervention to shore up social safety nets, the ability of educational systems to keep pace with change, the potential growth of alternative economic models, and the possible rise of social and political movements demanding more equitable growth.
New Approach
In addition to a new agenda, we also believe that it is time for a new approach by sustainability leaders. In our changing world, new skills will be even more important parts of the puzzle. Helping companies navigate the emerging world means building and contributing to resilient business strategies, not simply integrating sustainability into business strategies built by others.
We have outlined this approach in great detail in our report, Redefining Sustainable Business: Management for a Rapidly Changing World. This report provides a blueprint for putting sustainability at the center of business to enable companies to play their full part in the creation of a just and sustainable world. It focuses on how sustainability is implemented inside companies.
New Advocacy
In many parts of the world, societies are growing more fragmented, and the rapid pace of change is increasing a sense of disconnection for many people. Often, governments are slow to adapt to changing conditions. It is crucial that companies advocate for outcomes that leverage all of the changes we are discussing for broad social benefit.
Business will have the platform to play this role only if it champions an agenda that resonates with the public, and only if it is seen to be acting for the benefit of the greater good—for reasons that go beyond short-term financial gain. The payoff for business is substantial: the opportunity to help build support for progress on crucial issues, the creation of a more predictable operating environment, and, ideally, the restoration of trust.
What’s Next
This action agenda and plan will play a key role in creating and scaling the projects and collaborative initiatives that will power BSR’s own strategy and impact through 2025. We have engaged our members in scenario planning this year, and this will be a major focus of The BSR Conference 2018: A New Blueprint for Business. If you’re interested in talking to us about these ideas, please contact us.
To read more about our perspective on The Future of Sustainable Business, download the report.
Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals.