2020 & Sustainability: It’s Decision Time for Business Leaders
Anyone involved in business is facing an extraordinary challenge. For decades, ‘working in business’ has been a perfectly respectable career. It says wealth creator, driver of economic prosperity that benefits all. But lately this has changed.
As we enter a new decade, business people are finding that they are having to choose sides. According to James Perry, co Chairman of frozen food manufacturer and retailer COOK, the evidence is becoming increasingly alarming and incontrovertible.
In the words of the Apollo 13 mission, ‘Houston, we have a problem’. You can read it in the headlines. Feel it in the air, and in the staff canteen. The threat that we face from climate breakdown is profound. And the threat of social breakdown driven by widening inequality and inequity is becoming real and present, from Chile to Hong Kong via Brexit and Trump.
As these twin storms start to rip through our stability and our future, it doesn’t take long to identify a key driver – big business. Those of us living in developed economies see our savings and pensions paid for by businesses that have been playing a game that has been judged perfectly fair: extracting fossil fuels and building the power stations and engines to burn them; creating technology to persuade us and each other to buy more stuff, and foment the belief that we need it. Agribusiness, fast fashion and mining exploiting the natural world to feed us, clothe us, and make the gadgets we need to buy more stuff. Financial services to lend us money to pay for it, and entertainment and pharmaceutical companies to sell us the distraction and drugs to anaesthetise us from the anxiety and emptiness of it all.
Does this make business evil? Certainly not. Business is a get-stuff-done machine. It is one of the most powerful inventions we’ve created as humans – it just needs to be properly harnessed and directed. Whether business is malign or benign depends on what we have instructed this machine-that-shapes-our-world to do for us. Currently, we have installed an operating system in business that instructs it to maximise profits. Whilst for decades this may have driven prosperity for billions, latterly we have seen that the machine has become sufficiently efficient at taking human capital (people) and natural capital (planet) in order to convert it into financial capital (profit) that it is harming us and our children at an accelerating rate.
Business is a get-stuff-done machine. It is one of the most powerful inventions we’ve created as humans – it just needs to be properly harnessed and directed.
So people in business are increasingly asking ‘what are we doing?’ And they are increasingly concluding that things need to change, fast. The signals are everywhere. Most notably in the UK, with the autumn publication of the Future of the Corporation report from the British Academy, which called for nothing less than the complete repurposing of the awesome machine of business. It calls for us to remove profit maximising as the operating system, and replace it with a new operating system: to profitably solve problems for people and planet. This is no leftie pipedream – some of those calling for this new operating system are leading users of the current, flawed one. These companies, such as BP, Rio Tinto and UBS are particularly well placed to understand how damaging the profit maximising idea is but find themselves boxed in by the legacy system. In similar vein, the Financial Times launched a New Agenda to insist on a new operating system. Across the pond, the Business Roundtable in the US also argued for a new operating system, a group which includes the most senior business leaders in the US, from Jeff Bezos down. In February this year, the World Economic Forum in Davos will launch their 2020 manifesto calling for the same thing.
The UK is poised to take leadership in this twenty first century imperative. The manifestos of Labour, Liberal Democrat and Green for the December 2019 election all included proposals for legislation to un-install profit maximising and replace it by uploading a new set of rules into Section 172 of the Companies Act which are designed to re-purpose business: to protect the systems in which it is embedded whilst solving social and environmental problems.
In much the same way as there are climate-change deniers, there are profiteer-deniers. These people, whether in finance, business, politics or business schools, cling to the wreckage of their old certainties about business in spite of the extinction event that has befallen them. It is becoming increasingly obvious that, if we don’t change, it is us business people who will be behind the wheel as our economic system destroys our planet and eviscerates our communities.
If we don’t change, it is us business people who will be behind the wheel as our economic system destroys our planet and eviscerates our communities.
This new decade will be pivotal for the human race. We have a strategy, the Sustainable Development Goals. If we succeed in re-programming the machine of business, then we have a chance to meet them by their 2030 deadline. We can enable business to repair and restore; to become circular rather than linear; to curate and care for, rather than exploit and extract. If we fail to do this, then the consequences for our children and our children’s children will be dire.
Over the last 14 years, this trail has been blazed by the now over 3,000 Certified B Corporations around the world, companies in 150 industries and 70 countries who have installed this new operating system and are daily demonstrating that it works and it is better. They have created a pathway for all business to follow.
As we enter this new decade, all business people are faced with a choice: Do we follow the easy path of doubling down on the status quo, soothed by the ‘prosperity’ gospel of unreconstructed Chicago school profit maximisation? Or do we take the harder path and take an honest look in the mirror, think about what side of history we want to be on, and agree that we must install a new operating system into our awesome get-stuff-done-machines? Do we want big business to be a death machine, or a life machine?