This article titled “Business leaders: dig deep and collaborate for the common good” was written by Jo Confino for the Guardian Professional Network, for guardian.co.uk on Monday 23rd April 2012 17.33 UTC
We live in a dualistic world, which means that for all the talk in business circles about the positive power of collaboration in the arena of sustainability, lurking in the shadows is a growing fear of conflict.
I sometimes wonder if the life I am living is akin to those years before the outbreak of the second world war. I wake up and the sun is shining, the flowers are blooming and I go to work. The conversations I overhear on the train are about football and what was on TV last night.
Yet parallel to this “normal” life, the seeds of a possible global catastrophe have already been sown and are germinating. All that is needed for them to manifest is a particular combination of circumstances.
As Björn Stigson said to me just before he stepped down as president of the World Business Council for Sustainable Development, there are good reasons why the US military is doing so much planning around the consequences of climate change.
I asked my colleague Julian Borger, the Guardian’s diplomatic editor, about this issue last week and he referred to Darfur as being the first conflict based on climate change and environmental degradation, with the risk of many more to come.
He also pointed to a study by the UN Environment Programme back in 2007 that concluded that “Darfur … holds grim lessons for other countries at risk.”
What are these seeds of conflict?
The latest predictions are that by 2030 the global demand for freshwater will exceed supply by 40%, and global food prices will double. Energy supply is already becoming more volatile and prices are at unprecedented levels. More than three-quarters of edible fish species are already fully exploited or depleted.
According to Yvo de Boer, KPMG’s global adviser on climate change and sustainability, there are more than 40 countries facing agricultural productivity declines of between 15 and 50%, and up to 60% in some African regions, yet food production needs to rise by 70% to meet global demand by 2050. As Unilever points out, that means producing as much food in the next 40 years as has been produced in the last 8,000.
In just 20 years, population growth and rising incomes could together account for a rise by more than half in protein consumption. What that will do for methane levels, you don’t want to know.
I could go on and on about a host of other impending crises such as ecosystem degradation and the consequences of population growth but the list is too long. On the other side of the equation, I cannot think of a single major indicator of planetary health that is going in the right direction.
Teetering on the edge
It’s also critical to understand that it does not take a powerful trigger to knock us off our centre. We only have to look at the recent panic in the UK over just the fear of a short-term petrol shortage to see how thin the veneer of our civilisation actually is.
Mike Gooding, an agricultural consultant, who owns his own farm in Oxfordshire as well as advising BBC Radio 4′s iconic programme The Archers, pointed out that we are only nine meals away from anarchy, adding that “hungry people are angry people.”
There is plenty of evidence of this already. We have seen how food and fuel price hikes have been the catalyst for civil unrest in the Middle East and Africa. Don’t believe for a moment that the developed world is immune from such convulsions.
Given all these risks, it’s not surprising that NGOs and progressive business leaders are concerned that the time for considerate change is shrinking and that protectionism and conflict will stalk us unless we act now.
James Cameron, chairman of Climate Change Capital, the investment manager and advisory group, said at the recent Skoll World Forum that the only other times that commodity prices have risen so sharply in history is at times of world war.
He believes the fact that war has not broken out yet is only because our creaking global institutions and the networks they spawn are just about keeping us out of harms way. But he says he is very fearful the next step will be protectionism.
This worry is shared by Georg Kell, chief executive of the UN Global Compact, the world’s largest corporate sustainability initiative. He said: “Governance is mainly about a peaceful environment for corporate sustainability to flourish. So we should make the case to struggling countries that improvements in employment and income need a stable environment and incentive structure that rewards long term investment. This is far from the reality today.
“I am very concerned about opening up the door to protectionism and we need to be very alert there. My experience as a trade economist is that open markets are the best insurance that technological solutions can rapidly diffuse around the world.”
Another conversation I had recently was with Nick Mabey, chief executive of E3G (Third Generation Environmentalism), who was a senior adviser in the UK prime minister’s strategy unit leading work on national and international policy areas, including energy and climate change.
Having been engaged in countless multilateral negotiations over the years, he realised that politicians do not currently have the courage to create change fast enough, which is why he is seeking to effect change from the outside.
Mabey, who has been instrumental in the creation of the UK’s Green Investment Bank, says it is not just a stable business environment that is at risk but our basic democratic freedoms.
Where do companies go to from here?
Well, like the rest of us, there are two divergent paths they can take. One is a race to the bottom, going back to our more primitive responses of protection and aggression.
But there is neither success, nor joy from this path. Paul Polman, chief executive of consumer goods conglomerate Unilever, made this very clear only this week.
“Business must be part of the solution,” he wrote. “But to be so, business will have to change. It will have to get off the treadmill of quarterly reporting and operate for the long term. It will have to see itself as part of society, not separate from it. And it will have to recognise that the needs of citizens and communities carry the same weight as the demands of shareholders.
“We believe that in future this will become the only acceptable model of business. If people feel that the system is unjust and does not work for them, they will rebel against it. And if we continue to consume key inputs like water, food, land and energy without thought as to their long-term sustainability, then none of us will prosper.”
So the other path we should be heading towards is to strengthen and deepen our bonds of community and inter-connectedness so that we improve society’s resilience to deal with shocks. For businesses that means becoming far more radical and open in the way they co-operate and collaborate.
A collaborative approach
While some businesses have already come a long way in developing real partnerships with NGOs, business now needs to take a leap into the unknown and work much more pro-actively with the political process and also with its customers, or as Polman more accurately described them – citizens. Ian Cheshire, CEO of Kingfisher, has already talked about the need to work in partnership with his customers to help generate political change.
Business executives also need to shine the spotlight into their own dark corners and challenge some of their core beliefs, which are still based around the language of competition and individuation.
While a few may be starting to talk about systems thinking, businesses still base their decisions around linear processes and fail to honour and listen to employees who may seem chaotic, but whose minds are able to work with much greater complexity.
They should follow the lead of Jeffery Sachs, the noted economist and director of The Earth Institute at Columbia University, who has recognised the bankruptcy of the current economic systems and is casting his net wide looking for answers.
He recently held a conference, which took a refreshingly inter-disciplinary approach by bringing together executives and economists with psychologists, Buddhist monks and neuroscientists.
Changes are taking place but far too slowly for the challenges we face. What business leaders need to do is tear open their suits and dig deep to find the strength and humanity to work for the common good, which is not at odds with the interests of their shareholders.
Unilever’s Polman has a simple benchmark for knowing if he is doing enough or not: “It’s too important for the world not to act,” he told me. “I couldn’t look my kids in the eyes if I did not do this.”
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