How Businesses Should All Dare Together for the Only Future We Have

February 23, 2020 Anna Kapica-Harward

Still relatively fresh into 2020, we are apt to speculate what the next decade will hold. What innovations are we likely to see? Will wearable technology continue to trend? What changes are we likely to see in post-Brexit Europe? Will Scotland become an independent country? But just as nobody could have predicted Brexit in 2010 or 9/11 in 2000, such predictions are all guesswork.

There is one thing, however, we can be sure of: Climate crisis will, without a doubt, persist and become the defining issue of the next decade, growing in urgency even more than it has over the past several years. And this crisis will be closely followed by concerns over human rights, which it will have to a large extent aggravated. 

In fact, these unprecedented global challenges are already impacting people and causing disruptions in business. But we are at a pivotal moment. Experts are confident there is still time to get the world back on track. We have the innovation, tools and expertise to make it happen. But, they stress, we need to act before the window of opportunity closes for good. And this may require us to redefine concepts, challenge the status quo and dare to be different.

This is why, the theme we have adopted for this year’s Sustain, our annual conference for the sustainable supply chain, is #DareTogether.

The Corporate Agenda Is Changing 

The limitations of governments to mobilize stronger and more ambitious climate action have been clear for a long time. The world has been looking up to the private sector to step up and demonstrate leadership. And it seems the changing consumer sentiment and growing expectations have resonated: The corporate agenda is changing.  Business leaders around the world are calling on companies to look beyond profits, to redefine the purpose of corporations and to more effectively cater to the needs of communities and the environment. 

BlackRock, the world’s largest money-management firm, which oversees over $6 trillion of assets, may be the most prominent example. Having introduced a variety of sustainability products, the company CEO, Larry Fink, has stressed in his letters to CEOs, starting in 2018, that business must “make a positive contribution to society” rather than focus solely on profits. 

The question of corporate purpose was also central to the Business Round Table statement just over six months ago. America’s most influential group of corporate leaders, bringing together some 200 CEOs, rejected the idea promoted by the late economist Milton Friedman that a company’s only responsibility is its profits. Instead, they agreed that a company needs to serve a much larger purpose and satisfy the needs of all its stakeholders. 

And in December 2019, 177 companies, spanning 36 sectors and headquartered in 36 countries, pledged to set highly ambitious emissions reduction targets to help limit the worst effects of climate change -- more than doubling in size since the first group of early movers was announced at the UN Climate Action Summit in September.

As part of the “Business Ambition for 1.5°C — Our Only Future” campaign, new signatories have pledged to set climate targets that align with limiting global temperature rise to 1.5°C above pre-industrial levels and reaching net-zero emissions by no later than 2050. These companies have a combined market capitalization of over $2.8 trillion, and represent annual direct emissions equivalent to the annual total CO2 emissions of France. 

And let us not forget the 10,000 companies across 161 countries who have signed up to participate in the United Nations Global Compact and committed to the Sustainable Development Goals. 

From Commitment to Action Through Sustainable Procurement

The growing awareness and commitment among the worlds’ most visionary CEOs is certainly encouraging. But to successfully put these commitments into practice they need CPOs who are equally committed. A company’s supply chain can have a huge impact on sustainability. Purchasing volumes account for up to 60% of a company’s revenue and it’s procurement who owns relationships with vendors, placing it in a unique position to establish transparency and promote sustainable environmental practices as well as anti-corruption, fair labor and human rights policies. 

The UN Global Compact encourages companies to make sustainability a priority from the top of the organization. If the CEO sees the supply chain as an extension of their workforce and community, the company can set expectations for best practices across its supply chain.

A growing number of procurement professionals are beginning to see the gravity of their roles in the changing corporations. Only last year, a group of them came together to create the Sustainable Procurement Pledge, a movement, they say, “borne out of passion and driven by a shared sense of responsibility.” They see the impact the procurement decisions have on the future of the planet and have committed to make sustainability the central mindset of their daily decision making. 

And there is an added bonus too. Procurement organizations, traditionally primarily concerned with cost saving and risk management, find that investing in sustainable procurement pays off. Some of the most engaged companies have been better able to mitigate risks, have developed deeper and more meaningful relationships with their suppliers, often leading to innovations and increased sales. And many have found their commitment to sustainability has helped them attract and retain top talent, which in turn helps drive their sustainability agenda further.

Let’s #DareTogether

The commitment is there. As is the roadmap for action. Now, we need to be bold and place sustainability as a core component of everything we do as businesses and individuals. This is the only way to avert the crises that already impact lives and businesses, and work together for the only future we have.

Learn more about Sustain 2020 and watch the replay of the conference.

 
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