by Gael O’Brien
For hundreds of CEOs, 2017 galvanized their speaking out when changes in public policy ran counter to company values on diversity, social issues or how to address climate change. However, the role of business in society isn’t on every CEO or Board agenda; nor is sustainability routinely considered a cornerstone in business strategy.
Nevertheless, business as usual has been upended. We can count on uncertainty, change and disruption continuing to affect business in 2018 and beyond requiring companies to reinvent themselves. Government’s role in addressing social and environmental challenges is unclear. While short-term thinking hasn’t loosened its grip, it is increasingly clear it offers no solutions to some of the key problems confronting business. So the question is, will companies (and leaders) in shoring themselves up to deal with rapid change recognize the increased importance of what sustainability offers?
Drawn to the conference title “How Business Leads,” I attended the annual fall conference of Business for Social Responsibility (BSR), a nonprofit organization whose members include many of the largest businesses in the world – companies like Microsoft, Boeing, The Walt Disney Company, MacDonald’s and Target — who were represented by nearly 1,000 of their sustainability officers, team members and partners. I wanted to understand the global nonprofit’s take on where sustainability leadership is heading.
The broad scope and complexity of the sustainability field was brought home when I needed to choose breakout sessions from among the 30 offered: topics ranged from the ethics of artificial intelligence to human trafficking; from products and climate resilience to discussion of the 21st century social contract.
Celebrating BSR’s 25th anniversary, CEO Aaron Cramer framed the conference by outlining the need to redefine sustainable business with a new agenda, approach and advocacy going forward – themes elaborated on in a subsequent report, “The Future of Sustainable Business: New Agenda, New Approach, New Advocacy.”
My takeaways from the conference included: 1) Redefining sustainable business takes continuous improvement to the next level to increase relevance, impact, value and collaboration; 2) If the right players are involved, the collaboration involved in “futures thinking” (a process to map possible scenarios) puts sustainability and ethical considerations into business planning and strategy from the outset to benefit stakeholders; and 3) The new advocacy, modeled by hundreds of CEOs in 2017, happens authentically when CEOs grasp the value of their sustainability teams and operate out of a company’s values, mission and connection and commitment to stakeholders.
Redefining Sustainable Business
Cramer told BSR members that an unprecedented era of change and disruption was ushering in a new business environment and it was time to redefine sustainable business around the roadmap already established. “In the last five years,” he said, “we’ve had the Paris Agreement, Sustainable Development Goals, and the UN Guiding Principles on Business and Human Rights.” We have a roadmap, he continued, “and it is universally accepted that business is central to that.”
He indicated the new agenda is being driven by areas where sustainability and business have converged and new topics emerged (such as climate resilience, new technology and its ethical implications and automation affecting work). The new approach he indicated would change an operating assumption and evolve the role of chief sustainability officers. Rather than integrating sustainability into regular business strategy, he said, smart companies have sustainability as a foundation from the beginning. “We’re seeing companies look at questions related to climate, social acceptance of new technologies, and that enable economic vitality and security as the building blocks of success.” The new advocacy, he explained, is a need for a new voice for business which many CEOs already demonstrated in responding to 2017 issues.
The BSR report indicates that over the next year the organization will be engaging with member companies “on what is changing – and what needs to change – to achieve a just and sustainable world” and asking a series of questions that will help advance relevance, value and collaboration.
I participated in the breakout session “Redefining Sustainable Business: A Futures-Thinking Design Sprint” with a group of CSR executives who worked on a futures proposition Marks and Spencer the multinational British retailer, raised for our input. The exercise gave us exposure to “Futures Thinking” tools and how they can help companies deal effectively with rapid change, uncertainty and complexity. The purpose is to be able to spot early signs of change and identify multiple possible future outcomes to explore. Forecasts aren’t reliable. Our 20-minute maiden exercise didn’t help Marks and Spencer, but the experience reinforced for me how greatly companies would benefit from very diverse teams that include both sustainability and ethics officers when business strategies, decisions or “Futures Thinking” are addressed with marketing, finance and other key areas.
Both the sustainability and ethics functions within organizations have multi-dimensional ways of seeing and relating to stakeholders, unintended consequences and potential ways of making authentic connections. In line with this, one of the BSR report’s questions for member discussion in BSR’s process of redefining sustainable business in 2018 is: “How can sustainability teams use their core competencies and networks to help their companies anticipate and address new issues that will be created by rapid changes in the global climate, technology and the role of business?”
The New Advocacy
The CEOs who’ve been the most effective speaking out against racism and on behalf of diversity, fairness, human rights, climate change, gender equity and other issues are those whose corporate policies reflect and reinforce the behaviors and actions that give weight to their words. These issues, rather than separate from business, are interconnected; business isn’t an inanimate entity—it is inextricably connected to people — those who create, make, deliver, buy and use products and services. Issues of sustainability, acknowledged or not, are at the heart of every stage of the process.
We badly need champions like those CEOs who use their voices for principles not politics. In a recent Harvard Business Review article, “The New CEO Activists,” which offers a playbook, business school professors Aaron K. Chatterji and Michael W. Toffel write: “As more and more business leaders choose to speak out on contentious political and social matters, CEOs will increasingly be called on to help shape the debate of those issues.” Employees and customers deserve this kind of leadership as do the communities in which the companies operate. Granted, these are difficult issues and mistakes happen. And leaders make choices about how mistakes are addressed; the degree to which they actively support and reinforce a company’s culture; and the degree to which they fuel their potential leadership by using sustainability and ethics teams as a critical resource in dealing with the business landscape.
In the reinvention that is an inherent part of change, exploring what would have to happen to have sustainability as a foundation for business strategy would be a great start.
Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust, and reputation. She publishes The Week in Ethics and is a Kallman Executive Fellow, Hoffman Center for Business Ethics, Bentley University