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Sustainability has received unprecedented attention over the last several years. Chief executives have aggressively set sustainability priorities and goals, and new reports and articles are released on the topic every week. This attention is positive, for if the modern global economy is to uncouple growth from environmental and resource intensity, awareness is crucial. But for global business, it is not easy to discern what is truly important amidst the cacophony.
The World Economic Forum’s Sustainable Consumption Initiative was designed to cut through this noise and the many confusing and sometimes conflicting perspectives. It aims to bring clarity to the discussion by pulling together the perspectives of stakeholders from all sectors, catalysing concrete discussions between those who have the power to affect change. This collection of essays is a volume of interesting ideas, pulled together to explore the overall direction of business progress on sustainability and sustainable consumption. Each author has played a crucial role in the World Economic Forum’s work on sustainable consumption since it started five years ago.
Peter Lacy, Managing Director of Accenture Strategy and Sustainability Services for the Asia-Pacific region, has contributed a chapter entitled “Recalibrating the Business Compass to True North” where he explores the overall direction of business progress on sustainability and sustainable consumption. True North is about the kind of innovation and transformation that leads to sustainable systems. It is about setting the direction to “True North” and the transformational change and innovation required to align the power of market forces with sustainable development.
Over the course of more than four years, CEOs from a range of companies along entire value chains as well as leaders, scientists and experts from top NGOs, universities and international organizations gathered, first to understand the impacts of consumption, and later to explore the opportunities offered by sustainable consumption as the lens for business innovation. With workshops and panel discussions at the World Economic Forum Annual Meeting in Davos- Klosters from 2008 to 2012, visible progress was made as CEOs first explored sustainable consumption as an important business issue and then embraced the ideas as enablers of innovation to transform their companies.
While much commendable progress has been made on sustainable consumption since the publication of the Sustainability for Tomorrow’s Consumer report, the companies engaged recognize the difference between the mainstreaming of ideas and the mainstreaming of actions. It is important to acknowledge the power that business brings to the table, especially when one considers the billions of consumers reached on a daily basis by top consumer brands. Many companies are doing the best they can within the rules established around them, while under-priced resources and impatient investors make it difficult to change quickly. By bringing together leaders of the highest level with a wider range of stakeholders than ever before, the World Economic Forum is able to make a tangible impact in this space, moving from the ideas and ideologies to the actions needed.
Taking stock on sustainable business, some progress has been made, but much still remains to be done. Sustainability – in its social, environmental and economic sense – is increasingly a top agenda item in boardrooms around the world.
In the recent UN Global Compact- Accenture Study on Sustainability 2013, more than 93 percent of chief executives from 1000 global companies spanning 100 countries and 25 industries, said that they see sustainability as “important” or “very important” to the future success of their business. Among the nearly 150 CEOs from emerging and developing economies, many of them in Asia Pacific, more than 98 percent said they regard sustainability as a business imperative for their companies. This reflects not just long-term concern for global socio-economic and environmental issues, as in Europe and North America, but a gritty and realistic “lens of proximity” fixed on short-term business necessities in areas like pollution, energy, water, waste and poverty alleviation.
Put simply, sustainable business, and efforts on sustainability more broadly, are not keeping up with what the science tells us we need to do. According to the UN and Trucost, the full cost of doing business picked up by society at large – of the 3,000 largest companies in the world, is already US$ 2.2 trillion per annum, a sum greater than the GDP of all but seven countries in the world.
Real progress on sustainable business looks questionable. The extent of the challenge appears not to have fully penetrated mainstream discussions, and objective performance assessments reveal a mixed bag.
Sustainable consumption and resource efficiency means influencing supply, demand and policy at the same time to create systems change. So while the research suggests that many executives have made genuine progress on sustainable business, it is clear that we are not headed in the right direction on most key sustainable development metrics, and the sustainable business compass does not appear to be set to get us to where we need to go.
Four practical, achievable steps emerged from the World Economic Forum’s Initiative on Sustainable Consumption. First highlighted in the 2010 report, “A Roadmap for Sustainable Consumption,” these recommendations can be used to help companies and other institutions and organizations start the process, as they highlight the obstacles that must be overcome and the opportunities that can be seized by business, leaders and citizens on the way.
The first step is to firm up the Foundation, as the current leading practices of today become standard practice and sustainability strategy becomes integrated into business. The barriers to be overcome include the mind-sets of leaders, a lack of awareness at all levels of an organization and general inertia associated with any organizational change.
The second step is Rebuilding Business; the real challenge addressed at this step is that of organizational change. This shift within a company is certainly not easy, and can be made more difficult by a lack of knowledge and know-how or the challenge of building higher and more authentic levels of trust within an organization.
The third step, New Value Chains, is the beginning of a major shift towards new business models, in which sustainability is integrated across entire value chains to move towards sustainable supply and zero net waste.
The fourth and final step leads us to Balanced Systems, in which radical innovation drives a circular economy and the concepts of value and growth are redefined for all stakeholders.
December 19, 2013
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