I’m writing this from home, where I have been isolating after catching COVID. Kim and I were so careful over the holiday, avoiding all parties, that frankly I’m amazed I caught it. But it just goes to show how transmissible the new variant is. I’m very lucky: I didn’t suffer badly thanks to the vaccine and booster. It’s an outrage so many people are still being denied this basic protection. 7% of people in developing markets have been vaccinated versus over 75% in developed ones. This is top of the list to change in 2022.
What else? 2022 will be a huge year for climate action to curb dangerous temperature rises in the time we have left. A huge year for equality as we strive to close the gaps that have been made worse by the pandemic. A huge year for democracy as populism continues to rise in many parts of the world and the gridlock in US politics continues to serve no one. Here are some of the big private sector shifts I and others will be working on.
1. A critical mass of courageous leaders
Despite growing evidence that more sustainable business models yield lasting value, attract the best people, unlock innovation and create resilience, I am still regularly asked to “prove it”. Thankfully we’re past the days when you had to point to Unilever and just a handful of others, over and over again, to show that companies can profit through purpose. There are now many more businesses striving to put themselves in greater service of people and planet and benefitting their shareholders as a result.
Microsoft has decided to remove from the air all the carbon it’s emitted since the company was first launched in 1975. Walmart has committed to protecting or restoring at least 50 million hectares of land and one million square miles of ocean. BT Group plans to by 2030 have a workforce with a 50% gender split, 25% from an ethnic minority and 17% with a disability. Lush has taken an admirable stand against the social media platforms it believes harm the mental health of its core demographic of young girls. There’s Ikea, Orsted, Schneider Electric, the +70 apparel companies collaborating through the Fashion Pact to, among other things, eliminate single use plastics and shift to regenerative cotton. New coalitions are emerging in sector after sector, especially on climate and including in hard-to-abate industries such as aviation and shipping. All helped by the financial markets finally beginning to move this way too.
Yet for every company trying to step up others are still stuck in a CSR mindset, believing it’s enough to be “less bad” or “do no harm” when the real prize lies in being what Andrew Winston and I call being “Net Positive” and thriving by giving more than you take. From a private sector perspective I see no challenge more urgent than shifting this balance, between companies engaged in incremental CSR and those aiming to help solve humanity’s biggest problems. We need more leaders.
Why? Because this is how we get to tipping points. Whether it’s moving our food systems to regenerative agriculture, or shifting our energy systems to renewables, or helping women and girls take up their rightful place in developing economies, change will be driven by a critical mass of leading companies raising standards and accelerating the pace of change for everybody else. Of course business cannot drive change alone – government must set the right frameworks, incentives and regulations and civil society has its vital role too. But the private sector brings speed, scale and innovation to the mix. And if we can secure this critical mass of leaders in key sectors, the dominos can really begin to fall.
I believe it’s possible. In the last 18 months, even with the pandemic, corporate momentum behind the responsible business agenda has grown at a rate which would have been unimaginable just a few years ago. It’s hard, painstaking work and every courageous CEO looking to take their company on this journey needs support and partnership. It’s another reason to spend less time debating why purpose matters, focusing instead on how companies achieve it.
2. Higher ambition to counter climate fatigue
2022 is set to be an emotional paradox. On climate, especially, humankind is doing more than ever, in terms of governments and companies setting targets to cut greenhouse gases and restore nature. So on the one hand we feel better. On the other, however, many people are starting to feel tired and overwhelmed. It feels as though the more we do, the further away we are from our goals. This is because climate change is an exponential problem – the worse it gets, the faster it gets. Even though we are doing more, the gap between our actions and our needs continues to grow.
There is no easy answer to this but we can pre-empt some of the fatigue and frustration already beginning to manifest. It falls to leaders, in business and in politics, to offer people a compelling vision and plan for how we, together, can step up to our historic challenges. It’s not about any one government or C-Suite having every answer. Indeed no one does and overpromising is counterproductive. But it is about elevating our ambition to match our challenges. Nation X or Company Y promising to get its act together by 2050, or 2060 or 2070 is too little, too late. Very soon such ill-fated incrementalism will really start to feed people’s collective despair, and this risks slowing us down even more. It’s very difficult to drive change in an organisation or a society when the people within it feel hopeless or scared.
Higher ambition, by contrast, fosters hope and urgency. Don’t just set the targets you can get away with, set the targets the world needs. There’s no silver bullet pledge or commitment. Higher ambition is a mindset shift, and the overall test for our actions is: will we leave the world better than we find it? This is the whole idea behind Net Positive companies. Don’t just cut your emissions, take Green House Gases out of the atmosphere. Don’t just offset your carbon by planting trees, actively regenerate our soils, forests and oceans. Empower the disempowered across your value chain. Improve the health and well-being of the people whose lives you touch. Help them find truth and work to strengthen the democratic process. Collaborate with your competitors, your critics and politicians to address the challenges we cannot solve alone.
Not everyone can do everything. But increasingly we need agendas to motivate and inspire. A collective willingness to raise the bar can help re-energise our efforts as our climate challenge continues to unfold.
3. Employees, employees, employees
2022 will be the year of the employee. The way we see work has changed dramatically, sped up by COVID. In the US workers are switching jobs like never before. All over, we want our working lives to hold meaning and we expect the organisations and people we work for to represent and embody our values. Every company now has a Greta in its ranks, and probably many. It’s a trend we can expect more of – and it’s a good thing. Employees have become a key accelerator for getting business to embrace more environmental and ethical practices. And CEOs who treat their employees with the same respect they treat their investors can build a deep, purpose driven culture across the company.
But, even in some of our best businesses, there are significant gaps between how the leadership sees the company’s environmental and social credentials versus how their people do. 78% of C-suite executives say their organisation is doing all it can on climate change, but only 53% of employees. 73% of leaders say they put the same importance on sustainability as they do on profits. For employees, fewer than half believe this is true.
These gaps are a problem. We live in a period when trust in established authorities is at an all-time low, and this trust deficit pulls at the fabric of our societies. Look at this another way: imagine the good that can be done if more and more people believe that their employers share their values, are being straight with them, and that their work contributes to a bigger shared purpose.
Closing these gaps is not always easy. Ultimately it’s about consistency and transparency, driven from the very top of the business. You have to try to stay true to the company’s values in everything you do, even – especially – on the tough issues. There’s no point having a fantastic carbon target if you fund politicians who deny climate change. You can promise to put more women or people from ethnic minorities on your Board, but what’s the point if you are a member of a trade association trying to block equalities legislation? You can create jobs in your local communities, but if you try every trick possible to avoid paying your taxes you are starving those same communities of the cash they need for hospitals and schools. As employee power grows, more and more of these thorny issues will come to the surface. There is a lot to be gained for the business leaders who take them head on.
Find out more about Paul’s work to accelerate sustainable business at netpositive.world.