What challenges and strategies are top of mind for you in sustainable business?
We find ourselves in a geopolitical epoch where “the leader of the free world” is saying the whole sustainability agenda is overrated. Leave serious matters to serious players, ones dominant in a struggle for power. The only social responsibility of business may well be to simply pay its taxes, and to embrace nationalism.
The risk is that even critics fall into the trap of adopting this mindset. If the example set by leadership is saying that all cats are black, maybe all cats are indeed black.
We think of business leadership as entrepreneurial, innovative, forward-looking and setting the standards of managerial efficiency. Leaders of large businesses have traditionally displayed scant interest in being inhibited by national borders. Trade liberalisation was to take market efficiency to a transnational scale.
But the sustainability agenda is still there and increasingly material. Our challenge is therefore one of enlightened leadership, leadership that stands up for a more holistic and values-based way of pursuing business, leadership that grasps the relevance of longer-term developments and that inspires collective action along global value chains.
What should we be doing differently today?
As a student protester in the 1980s, I’ve seen firsthand what happens if large sections of society find their human rights ignored, their welfare conditions rock-bottom, and need to find ways of making collective action work for a democratic transition. The context of economic transformation in an emerging market is nothing new to me. A key lesson from the South African experience is the role that inspirational leadership and open dialogue played in making a peaceful transition.
Working on sustainability issues since the 1990s, I’ve seen the agenda evolve. There are always new issues, including new technologies, that mature and eventually lead to the development of new standards and regulations. But some fundamental dynamics of how we use and manage different capitals (including natural and human) remain the same. And what we know about climate change today we essentially knew thirty years ago.
What is different in the 2020s is the changing geopolitical environment combined with a disruptive phase of the digital revolution. It is one in which Western economies can no longer assume leadership positions. Consumers and business leaders in Asia may lead the way. New leadership can come from many corners of the world. This is dynamic and exciting. Plus, business leadership can demonstrate how sustainability challenges pose not only risks but also opportunities, including opportunities of collaboration across national borders.
IF YOU COULD RESET SUSTAINABLE BUSINESS, WHAT WOULD YOU EMPHASIZE?
Looking at the urgency of the agenda, it is tempting to conclude that only mandatory standards and regulation will deliver the required action at scale. But weakness in regulatory enforcement will remain. This is where voluntarism and leadership by business remain key. As the nature of sustainability issues is clearer today, it may be that the reset is about mainstreaming. This implies that “ESG experts” cannot hold on to old terminology. Climate management may become risk management. Circularity may become synonymous with innovation. People management may become more human in the face of AI. Sustainable finance may become naturally associated with investment grade. All of this challenges how we educate the managers of tomorrow.
WHAT ARE YOU MOST PROUD OF?
I’ve seen the inside of government, international negotiations, the United Nations, international standard-setting, a Fortune 500 company, investor engagements and management education. I have been blessed to work with people from diverse backgrounds and leadership roles.