Oliver Balch interviews WBCSD’s Peter Bakker; WEF’s Katherine Brown; the UN Global Compact’s Lise Kingo; We Mean Business head Dr María Mendiluce; and John Denton of the International Chamber of Commerce to get a picture of what sustainability will look like post-pandemic
"Everything we do during and after this crisis must be with a strong focus on building more equal, inclusive and sustainable economies and societies.”
This sentiment, spoken by the UN Secretary-General António Guterres in response to the current Covid-19 crisis, captures a widespread sentiment among sustainable business advocates. Now, in short, is a moment to rethink tomorrow.
What will the “new normal” look like? How can themes like resilience and sustainability be kept centre stage? What influence might climate considerations exert in global recovery plans?
For many companies, just getting from one day to the next is achievement enough
Of course, tomorrow is not the only thing to think about right now. Many companies around the world currently find themselves in full crisis mode. For them, just getting from one day to the next is achievement enough.
Likewise, business networks and associations are working hard to help their members through this unprecedented crisis, yet, as key actors within global trade and commerce, they also have one eye on the future.
So, how are key sustainability organisations shaping their strategies for a post-pandemic scenario? Can we expect a shift in priorities and, if so, what?
To find out, Ethical Corporation interviewed the leaders of the leading business organisations working on the sustainability agenda globally.
Risk and resilience
To date, sustainability has survived – prospered – as a generous catch-all for a better, fairer, more long-term approach to business. Everything from global macroeconomic prosperity through to workers’ rights of association in sub-tier supply chains have fallen under its remit.
Expect this lens to narrow. Perhaps the most significant shift relates to the balance between risk and opportunity. Important as the latter remains, the politics of Covid-19 places the former in the ascendency. The key question, in other words, is less: “How do we build back stronger?” and more “How do we stop something like this happening again?”
As Peter Bakker, chief executive of the World Business Council for Sustainable Development (WBCSD), puts it: “This was a shock from a virus, but the case can be very easily made that future shocks – be they climate-related, nature-related, related to other pandemics – are very likely to occur.”
The response from WBCSD, as from its sustainability coalition peers, centres around a single, dominant theme: resilience. For Bakker, the path to greater resilience arises from a more thorough and more integrated approach to assessing strategic business risks.
Much of the early running has focused on climate preparedness – although the story here is still far from universal. Where not nearly enough work has been done is around social shocks, according to Bakker. He has in mind not just future pandemics, but crises of a political, cultural or demographic origin, to name but a few.
In an effort to compile some of the “long-term resilience lessons” emerging from Covid-19, WBCSD is currently working on a re-boot of its Vision 2050 report. Originally published in 2010, the updated version will be compiled by a working group of 40 WBSCD corporate members, all of which have assigned dedicated resources to what Bakker refers to as a mission-critical question.
If you are not thinking ‘how well-positioned am I to weather a shock like this Covid-19 crisis?’, then you are not preparing for the future
The emphasis on fuller and deeper risk-management is a message that the World Economic Forum (WEF) will also be trumpeting, confirms Katherine Brown, the organisation’s head of sustainable and impact investing initiatives. As she states unequivocally:
“If you [as a business] are thinking 10 or 15 years down the road and you’re not thinking ‘how well-positioned am I to weather a shock like this Covid-19 crisis?’, then you are not preparing for the future.”
WEF has been here before. At this year’s Davos summit in January, it was already asking tough questions about the detrimental effects of quarterly reporting on long-term resilience. Similar thinking is also apparent in its recent white paper on mainstreaming environmental, social and governance (ESG) risks – what WEF refers to as “dynamic materiality” – into company reporting and evaluations.
To this end, encouraging global accountancy bodies to incorporate standardised ESG requirements into traditional accounting rules will be high on WEF’s agenda going forward. So too will be its efforts to convince investor groups of the “value” in “values”, says Brown.
On this second point, she sees grounds for encouragement: “What has been really fascinating is seeing the number of investors who now see themselves as influencers of this materiality for the first time [and how], en masse, the movement of capital really changes everything.”
As Covid-19 has taught, however, resilience is not just about increasing awareness of unconventional or emergent risks that have hitherto gone ignored; it’s about acting on this knowledge. If that requires substantive and systemic change, as well it might, then businesses need to buckle up.
Step forward watchword number two: “transition”. Industry and business leaders are now increasingly cognisant of the necessity to shift their companies onto a fundamentally more sustainable footing, says WEF’s Brown. At the same time, they are looking to business associations for the timelines, milestones and best practice to help them do this.
The UN Global Compact (UNGC) is well-positioned in this regard. In addition to the Compact’s 10 core principles, which provide companies of all sizes with a basic transition framework, UNGC also boasts a tool for developing business strategies and practices linked to the Sustainable Development Goals (SDGs).
In conjunction with software giant SAP and professional services firm Accenture, the UN-backed body has plans to push forward the tool, known as the SDG Ambition Implementation Framework, with a pilot group of 1,000 companies from 40 or so countries.
Our message in the post-Covid era must also now be contextualised in a very pragmatic, solutions-oriented approach
“The SDG Ambition is all about how companies must set much more ambitious targets and goals and integrate these much deeper into their entire business,” says Lise Kingo, UNGC’s executive director.
As well as the 17 SDGs, the SDG Ambition initiative places particular emphasis on two additional targets, which, if universally adopted by the private sector, would be undeniably transformational. The first would see women make up at least 30% of all executive management positions and board-level roles. The second would result in businesses adopting measures to ensure temperature rises exceed no more than 1.5C above pre-industrial levels, as per the Paris Agreement.
We Mean Business (WMB), a business coalition that champions science-based climate targets, among other transition-focused mechanisms, is similarly adamant about the importance of target-setting.
Yet targets are not the only route to a risk-free future, admits Dr María Mendiluce, WMB’s interim chief executive, adding that it isn’t enough to talk about science-based targets, as important as they are in the fight against climate change. “Our message in the post-Covid era must also now be contextualised in a very pragmatic, solutions-oriented approach to the global challenges we now face, because the world needs them.”
A 'green' recovery
This focus on solutions obliges business organisations to look beyond their immediate membership. Corporate sustainability has always been a cross-sectoral affair; in a post-lockdown world, expect this support for multilateral approaches to become more explicit.
“We need to come with a strong narrative about how business can help respond to the challenges arising from Covid-19,” says WMB’s Mendiluce.
Part of that narrative is about business adopting smarter and more sustainable ways of operating, but part also centres on shifts in public policy. Mendiluce would welcome steps by governments to reduce oil subsidies, for example, or to increasing investment in low-carbon industries such as renewable power.
Government rescue packages mark a particularly prime opportunity for making the voice of progressive business heard, she argues: “We need to find better ways to engage with the policymakers that are making decisions about the stimulus packages.”
Support for business continuity plans and for greater digitisation are two quick-win government measures that could help SMEs 'build back better'
The focus on policy is one shared by John Denton, secretary-general of the International Chamber of Commerce (ICC). With a membership of 45 million businesses worldwide, the ICC is well-placed here.
Indeed, throughout the pandemic, Denton has been fielding calls with leading multilateral lenders, intergovernmental organisations, and governments in an effort to devise coordinated responses to the pandemic.
Much of the ICC’s forward-looking plans focus on helping small- and medium-sized enterprises (SMEs) get back on their feet. SMEs make up 80% of global gross domestic product and provide over 80% of all jobs, Denton notes.
A large slice of this task will be taken up with working alongside policymakers to make tomorrow’s global value chains fairer and more resilient for SME actors, particularly in emerging economies. Support for business continuity plans and for greater digitisation are two quick-win government measures that could help SMEs “build back better”, according to Denton.
Hovering at the back of the minds of all international business groups, be they sustainability-focused or not, is the same very real fear: namely, that simmering discontent towards globalisation, which has been on the rise in recent years, might tip over into a total breakdown in the neo-liberal order, with an end to open markets and the cessation of global free trade.
“One of our challenges is how do we enable an environment in which globalisation ... is able to continue and regain the support and confidence not just of citizens but of governments,” says Denton, who concedes that inequalities arising from contemporary neo-liberalism create a dissonance with the notion of business as a force for good.
Helping companies build resilience in the face of existential threats will, of course, be essential to globalisation’s future health. All eyes are on the risks of pandemics right now, but, as sustainability organisations are keen to point out, the next threat of this magnitude could easily emerge from any one of a myriad of overlooked social or environmental areas.
Yet, the future of today’s global economic order owes as much to being seen to be fair and inclusive as it does to being resilient in the face of emerging risks. The world’s international business alliance “hasn’t hit the pause button” when it comes to resolving globalisation’s shortcomings, says Majda Dabaghi, the ICC’s director for inclusive and green growth: “If anything, we need to redouble our efforts to ensure that nobody is left behind.”
Oliver Balch is an independent journalist and writer, specialising on business’s role in society. He has been a regular contributor to Ethical Corporation since 2004. He also writes for The Guardian among other UK and international media.
This article is part of our in-depth briefing Building back better after Covid-19. See also:
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