Burgess COMMENTARY

Peter Burgess

What is business doing about sustainability?

At the beginning of June, San Diego, California, will host an event focusing on sustainable brands. Although it is clearly not only interested in sustainability of the planet, there are some useful themes which make it worth commenting upon again, following our initial article at the beginning of April.

Sustainable businessThere is widespread consensus in the global Sustainable Brands community that purpose is trending in the business world, especially among brands that are looking beyond the next quarter and trying to figure out how to thrive in the middle and long run. Such brands are not only wisely taking actions to future-proof themselves, but are also smartly leveraging a strong zeitgeist of purpose-driven behaviour in society in general – that verifiable wave of health-conscious consumers, meaning- and balance-seeking employees, future-focused students and increasingly influential faith-based and spiritual communities.

Purpose, of course, is a natural ally of sustainability – on a personal level, on an organizational level, as well as on a societal level. One can easily argue purpose is even a key subset of sustainability, a must-have component for true future flourishing. Below are seven critical trends at the intersection of sustainability and purpose that are already having a big impact on the global business community.

1. The UN Sustainable Development Goals and COP21 will motivate broader and bolder action on sustainability

Sustainable Development Goals

First introduced as a proposal at Rio+20 in June 2012, the new UN Sustainable Development Goals (SDGs) have been launched formally to replace the Millennium Development Goals. The SDGs can serve as an empowering basis for innovation on many levels, and there already is an impressive pool of expertise emerging from sophisticated leaders that have embarked on SDG-driven journeys. Brands such as Unilever, Novozymes, Whirlpool and BASF, among others, have been vocal about aligning brand strategies, product and service innovation pipelines, supply chain initiatives, employee engagement programs and overall corporate sustainability goals with the SDGs. And on the COP21 front, the unprecedented private-sector engagement before, during and after Paris demonstrated to all stakeholders that big business not only supports climate action, but is willing to lead the way with its own serious commitments. Time will show whether these commitments will prove to be enough – science-based and sufficient given the climate timeline ahead of us – but the fact remains that COP21 is a massive motivator.

2. The list of ‘Green Giants’ will continue to grow, fueled by purpose-driven consumers and business leaders

Sustainable businessIn her book, Green Giants: How Smart Companies Turn Sustainability into Billion-Dollar Businesses, author Freya Williams explores what underlies the success of the world’s first nine billion-dollar sustainability-focused brands – Nike, Unilever, Chipotle, Toyota, Tesla, GE, IKEA, Natura and Whole Foods – and identifies six classes of success factors: iconoclastic leadership fueled by deep conviction and a rebellious streak; disruptive innovation that uses sustainability to spur the development of radically better products and services; a higher purpose that ignites the company; mainstream appeal with positioning and packaging stripped of the crunchy clichés that alienate the average customer; embedding sustainability values throughout the entire organization; and establishing a new ‘behavioural contract’ with consumers and other stakeholders. It has been well documented that these are not flukes and the list continues to grow – with this elite and inspiring club now featuring Organic Valley, Target and REI, and counting.

3. Emerging next-level leadership frameworks will provide integrated and interdisciplinary innovation toolsets

Sustainable businessThe importance of systems thinking cannot be overstated – it is a crucial must-have leadership skill for brands seeking to make the most of succeeding while leading the way to a flourishing future. At the same time, however, truly integrated systems-thinking leaders are still rare. To help with this and to provide compelling big-picture direction, a number of powerful new strategic frameworks are emerging. Efforts led by The Future-Fit Foundation, The ThriveAbility Foundation, Evonomics, Forum for the Future, The Cradle to Cradle Products Innovation Institute, The Ellen MacArthur Foundation, The Embedding Project and Valutus, among others, are quickly advancing and equipping executives with user-friendly tools that help plan on a systems level, set the right goals and then take concrete actions to get there. These organisations are doing truly game-changing research and converting it to breakthrough thought leadership. Watch this space for sophisticated, high-level guidance.

4. The science and practice of driving purpose orientations among employees will continue to be perfected

Sustainable businessIn its comprehensive study of purpose in the U.S. workforce appropriately entitled the “Workforce Purpose Index”, social enterprise Imperative and its partners found that “28 percent of the 150 million-member U.S. workforce defines the role of work in their lives primarily as a source of personal fulfillment and a way to help others. These Purpose-Oriented Workers, roughly 42 million strong, not only seek out purpose in their work, they create it and as a result, outperform the rest of the workforce”. At the same time, why and how purpose-driven employees differ from the purpose-neutral or disengaged employees is not well understood. Or at least not well enough – for example, Yale researcher Gabriel Grant has reached the counter-intuitive finding that the kinds of self-determination driving purpose-oriented employees mostly comes from within, and that brands’ efforts to create or boost purpose orientations are likely to backfire if individual self-determination is not already present in employees. This is proving to be a messy area of inquiry, but certainly one that will keep evolving quickly.

5. Content creators, marketers and other creatives involved in activating purpose will embrace conditional virality and virtual reality

Sustainable businessShould we celebrate or lament the fact that Upworthy is now a key player at the intersection of activating purpose and sustainability? The Upworthy crew moved on from its clickbait-oriented origins and is now harnessing the power of meaning- and purpose-loaded content to help businesses, NGOs and others communicate critical economic, environmental and social priorities in ways that are likely to catch mass appeal. Many think we should absolutely celebrate that – beyond Upworthy’s pivot, there is a long list of content creators and curators embracing various approaches to purpose-led virality without the help of distasteful tricks. It can be called “conditional virality”, though you may appreciate more the way GOOD Inc put it: “embracing virality without losing your soul”. If JetBlue can get its passengers to compromise and reach across the aisle, while a Dutch rapper narrates Heineken’s latest sustainability report, anything is possible.

As far as virtual reality (VR) is concerned, things are hanging in the balance right now, but that will likely change very soon. Although VR’s promises of unparalleled and sublime engagement of consumers and other stakeholders may not be trending in mainstream consciousness quite yet, there are many reasons to believe it will be very soon. One hears many influential voices in purpose-driven marketing and communications – including, but not limited to, Simon Mainwaring of We First, Geof Rochester of The Nature Conservancy, and Robert Holzer of Matter Unlimited – pointing out the vast potential of VR as a superior tool for building empathy by turning anyone into a witness of complex environmental and social realities around the world.

6. “Old guard” brands will continue to learn from and synchronize strategies with “next generation” leaders through acquisitions

Sustainable businessWhat happens to the “purpose” when a purpose-driven, “next generation” brand is acquired by a multinational corporation considered to represent the “old guard”? Quite a lot is at stake in such integration processes – from forming a unified internal understanding and level of ambition around sustainability priorities and strategies, to “purpose power” dynamics between the subsidiary and the parent company for the purposes of external communication, all the way to influencing the C-Suite and the Board. And we now have quite a number of such acquisitions to examine – consider pairs such as Coca-Cola and Honest Tea, General Mills and Annie’s, Campbell Soup and Plum Organics or Bolthouse Farms, and Kellogg and Kashi. Pooled insights from these cases represent a fascinating and evolving set of best practices and pitfalls.

7. The disconnect between corporate and investor perceptions and intentions will continue to be studied ever more closely

Sustainable businessWhile awareness and valuation of sustainable practices continues to grow overall, investors are demanding more data, better data, and deepening engagement with their investment prospects. The landscape of investor attitudes and actions around purpose and sustainability continues to be too wide and scattered for comfort, with important points of disconnect between corporate and investor perceptions and intentions. More work is needed to satisfy investors’ data demands, resolve existing communication breakdowns, equip CFOs and Investor Relations functions with ways to navigate complex, emergent stakeholder dynamics, and distinguish activist investor actions from other types of investor attention.

Sustainable businessAll of the topics touched on above, as well as dozens of others, will be discussed at the Sustainable Brands ’16 San Diego event, in early June.