This series is sponsored by Tetra Pak and produced by the TriplePundit editorial team.
If you were to audit a business class at a university 20 years ago, you would likely hear the recurring theme that the purpose of business is profit; to maximize shareholder value. Since that time, the Sustainable Development Goals (SDGs) have entered the picture. The SDGs are a United Nations ordained framework created to help guide government, the private sector and civil society agendas over the next 15 years.
The Cambridge Institute for Sustainability Leadership (CISL) would argue it’s no longer as simple as profit maximization. Fresh off of the release of their most recent report, Towards a Sustainable Economy: The Commercial Imperative for Business to Deliver the UN Sustainable Development Goals, we spoke with Aris Vrettos, Programme Director for CISL’s executive education programs about the role of business in society, the process of putting together the report, and the business challenges and opportunities that were uncovered during the process.
“Bringing people together” is at the core of CISL’s DNA. A large segment of the organization is devoted to bringing together investors, governments and businesses in small group settings to explore challenging questions, and make progress in difficult-but-necessary conversations. These conversations are validated with research from the University and insights from the Institutes international network. They use what they have learned over the last two decades to create a systemic approach to positive change.
In this spirit, CISL brought together an intentionally small group of senior leaders from some of the world top companies for a six-month deep dive into the business implications of sustainability. Working under the title of the Rewiring the Economy Inquiry Group, seven industry leaders from companies including Tetra Pak, Marks & Spencer, and Novo Nordisk met to share experiences, best practices, and comb through data and research. The group started with two hypotheses:
Vrettos breaks down how the SDGs themselves inspired the group,
"We started with a question that was ambitious in nature and we brought together a group of leading companies, a group of special individuals together to explore it. We wanted to build the case for implementing the SDGs. There was the recognition that if we start looking at the SDGs individually, not only will it start to create gaps in our ability to deliver, but it will also be counterproductive because the SDGs are so dependent on one another. There is not one goal that you can achieve without having to invest in some of the other goals. That’s what inspired the group."
So why is business singled out in the report? Because the business community plays a dominant role in the economy. The 17 goals are so interconnected that the private sector is best suited to lead the change in favor of sustainability because of access to resources. “Over the last couple of years, the dynamic between government and business has changed, in thinking about who is primarily responsible or able to push sustainability forward,” Vrettos explains, “it’s the behavior and practice of business, that if it changes will have a major impact, having the ability to also to positively influence other key stakeholders in their system.”
Most organizations haven’t explored the commercial implications of business as usual scenario, an unsustainable future, has for them. We generally make the the assumption that some key factors will continue to hold; the climate will remain stable, that our products will still be in demand, that our consumers won’t walk away. Increasingly we see that change. If you ask players in the utility sector a few years ago, they would say, coal will continue to boast a strong balance sheet. Many big utility companies in Europe have had to split between renewable assets and traditional fossil fuel assets. It can sometimes take a bit of a crisis for business to recognize this, so having that foresight, looking far ahead in the future is key. In this project, we look forward to 2030 to work our way back.
In putting together this report, the group concluded that the challenges of business buying into and working towards the SDGs are also the opportunities for business to lead in a field that is still emerging. They discovered that this requires a specific set of four business capabilities:
Vrettos believes that forward-thinking organizations understand the risks and opportunities that come from climate change, resource security, food insecurity, and health issues, but most importantly, they understand that their successes are tied to the success of their local communities. Embracing the findings of this report will give businesses the tools they need to deliver on the SDGs.
It is imperative to explore the commercial implications of business in 2017. We can’t assume that business as usual will continue to produce the same results. “Profit is like oxygen,” once said Peter Drucker, management consultant, educator and author whose writings contributed to the philosophical and practical foundation of the modern business. “You need it to survive, but if you think that oxygen is the purpose of your life then you’re missing something.” In many industries, we’re seeing the beginnings of a strategy that is more people-centered -- fashion giants working on human rights in their supply chains, consumer goods leaders trying to create healthier choices. These are small signs that the business agenda can successfully marry a social agenda; that business can play a role in trying to bring people together, and that business can help us reach 2030.
Image credit: Charles Forerunner/Unsplash
Laura Wise writes and speaks about business, philanthropy, corporate social responsibility (CSR), technology, and entrepreneurship. You can check out her portfolio here.