Ahead of our GreenBiz 17 conference, we collaborated on the Redefining Corporate Value event in Phoenix, Arizona. Partners included the World Business Council for Sustainable Development and the Arizona State University Walton Sustainability Solutions Initiative, the Center for Biodiversity Outcomes.
The world is changing. What do these changes mean, and what's going to drive sustainable business forward in 2017?
Peter Bakker, president of the World Business Council for Sustainable Development, and Joel Makower, GreenBiz co-founder, dove into what forward thinking companies should do, at Redefining Corporate Value, the third annual WBCSD North America member meeting. Here are the three major takeaways from the conversation.
1. The new global reality: Will the sustainability progress made in 2015 and 2016 hold up in 2017 and beyond?
Both 2015 and 2016 brought positive change and built meaningful momentum for sustainability, but today's political climate highlights serious issues within the global economic system.
"What we're seeing is that the current system is not seen as fair, and it's not working for everyone," said Bakker.
In fact, according to the 2017 Edelman Trust Barometer, 53 percent of citizens "believe the current overall system isn't working for them, that it's unfair and doesn't give them hope for the future – while only 15 percent believe that it is working."
President and CEO, WBCSD
Businesses have the opportunity to draw on important lessons that the past few months have taught us. What's clear in this new global reality, is that the business and sustainability journey is as important as ever
It's up to business to step up: the meaning and urgency of sustainability issues are still the same – and the risk and opportunities remain important.
"We as businesses have to gain trust back – otherwise no one will follow us," Bakker said. "We need to become a much more active voice - it may be hard to save the world, but we have to try."
2. Unprecedented opportunities: 2017 has been a clarifying moment. What are the opportunities staring business in the face?
"Addressing sustainability is about future competitiveness," said Bakker. The smart business leaders in the world are unlikely to fall back on sustainability commitments. They understand that doing so will mean falling behind on global competitiveness and missing out on important sustainability opportunities.
Business now has a clear idea of where those opportunities are: The Sustainable Development Goals (SDGs). "The SDGs were a great gift to humanity," Bakker said. "But they are too big to implement in business."
Companies should instead focus on a systems approach – creating holistic solutions that address many SDGs at once.
The Business & Sustainable Development Commission (BSDC) launched its flagship Better Business, Better World report at the World Economic Forum in Davos in January. It identified 60 sustainable and inclusive market "hotspots" across four key areas (energy; cities; food and agriculture; health and wellbeing) that could create at least $12 trillion in business value by 2030, generate up to 380 million jobs, mostly in developing countries.
These are big opportunities for business, but seizing them is going to require companies to work together.
President and CEO, WBCSD
The job is too big for one single company to accomplish alone. What business needs now are sector-based roadmaps to bring companies together across sectors, and rally for change in a much bigger way
3. Understanding risks, changing corporate governance: How do we get the attention of the people "upstairs" – the CEOs and CFOs?
Sustainability needs to be integrated into businesses at all levels – getting executives on board is more crucial now than ever – but according to Bakker, buy-in hasn't happened at the board level yet.
While the opportunities put forward by the BSCD may help get CEOs' and CFOs' attention – the other important piece of the puzzle is around risk management.
President and CEO, WBCSD
CFOs are key players. Without them, nothing will happen. Risk management is a key way to engage
Global developments around understanding and disclosing sustainability risks are gaining traction.
The Task Force for Climate-related Financial Disclosure's recommendations for businesses, asset owners, managers, banks and insurance companies to disclose their climate-related financial risks are "going to change corporate governance," Bakker said, " I would urge all of the businesses in the room to stay ahead of that curve, and implement sustainability into decision-making conversation."
Taken together, what can businesses do to ensure that progress on sustainability continues to move forward? Bakker shared the following advice.
First, stay the course, it will be turbulent and there will be distractions – but we need keep moving forward. Next, make it a priority to get the finance community involved, use established frameworks to understand and communicate your sustainability risks. Finally, make sure we have neutral platforms to talk about our successes – that's the only way we'll make a change.
This article was originally published on www.greenbiz.com