Business must solve sustainability. Policy and the public cannot

Policymaking and the public will not move quickly enough to address climate change or any of the global sustainability context. The last strands of optimism from COP26 that this could change have gone. But that might be the most important realization in solving sustainability. It gives businesses clarity. Specifically, clarity to the right people, in the right organizations, in the right rooms.

My only remaining optimism on sustainability is the clarity that businesses are increasingly experiencing. The only levers we have left that can achieve the systems-level dynamics and speed of change we need to limit climate change and progress toward the 17 UN Sustainable Development Goals—while also pulling policy and the public along—are now in the hands of business. We will get there eventually. Innovation and determination will come through, even if it’s far beyond 2050. But the important question is how bad it gets for how many people before we do.

I’ve lost patience with foundational research. The world doesn’t need more surveys telling us sustainability is important but that we’re not doing enough or that culture, data, and alignment are barriers… Or, as much as they need to be addressed, that there are deeper challenges like data models, roadmapping, and a disconnect between organizational-level strategies and the metrics, targets, accountability, and incentives needed for sustainability to cascade throughout an organization. Our presentation at the COP26 UN climate summit last year covered exactly these challenges.

We have roadmaps and goals to solve sustainability

The UN Goals cover all environmental, social, and governance (ESG) factors, as our framework in Exhibit 1 and more detailed outline show. But we’re failing. We need new levels of ambition and collaboration. Over the coming months, I’ll work with a series of organizations to pull together a critical mass of the right people and firms to ask, “What is the most ludicrously ambitious we can be together?” Given the level of systems influence many firms have and the speed of change required, anything that seems realistic seems pointless. But it does go without saying that the lower-hanging fruit must be tackled by those in the positions to do so.

Exhibit 1: Breaking down the global sustainability context from goals and roadmaps throughout systems and organizations

Source: HFS Research, 2022

My last strands of optimism from COP26 have gone, and COP27 is unlikely to help

A strange example, given the floods we see in Pakistan, hurricanes, global fires, droughts, and much more, is the UK’s record 40 degrees Celsius (104 degrees Fahrenheit) this year. But it wasn’t the temperature that struck me—so many deal with far worse—it was that it and an increasing number of tipping points we had predicted for 2050 are happening in 2022 (see this separate study). We’ll hit several tipping points even if we limit global warming to 1.5 degrees in alignment with the Paris Agreement. Add on the danger and loss-to-date of reefs, biodiversity, extreme weather, the sheer scale of lost ice and sea level rise, and then more, and it’s hard to draw any conclusion other than we are f*****. Politics, policymaking, consumer behavior, and public attitudes are not moving quickly enough, and COP27 in Egypt this November will not change that.

Not one organization has the full plan it needs for sustainability

Last year leading up to COP26, we published that 80%+ of organizations don’t have the plan they need for sustainability. But now, I’d say it’s 100%. If internally your organization has roadmaps and science-based targets, then one, I guarantee they won’t cover all the UN Goals, and two, you need to go to clients to push their sustainability. If you’re already pushing clients, push them more. And if you’re pushing as hard as possible, and have any position of influence, then it is critical to take that influence as far as you can to your ecosystem.

Exhibit 2: Organizations must address sustainability with clarity on three fronts

Source: HFS Research, 2022

Business can and must pull governments and the public into alignment with the global sustainability context

Leading organizations are realizing the scale of impact they can have from the center of a system. The three spheres of influence in Exhibit 2 are also detailed here.

But we need more direction on how businesses can best pull policy and the public along at the pace we need while addressing the sustainability of industries and value chains. We need to highlight how key organizations (business, government, or NGO) can move first, prove sustainable approaches work, and set the standards others can align with. The world remains dangerously unaligned with the UN Goals and roadmaps. Our sustainability shortcomings are already horrific—whether you consider climate, human rights, or global risk management—and these will get much worse for so many while those of us lucky enough to have more time battle to avoid the worst possible scenarios.

The Bottom Line: Our systems as they stand are not good enough to address sustainability, and too many of the most influential firms still use this as an excuse for not moving first and bringing their ecosystems with them

The reality staring businesses in the face is that regulation and a critical mass of public pressure will come. No one knows when. Heaven forbid it takes something so much more disastrous than anything we’ve seen before to trigger that change. It’s better to be ahead and part of the movement that sets that regulation—whether kneejerk or gradual—rather than frantically reacting to catch up.

We’ll soon be publishing the impact that services firms—financial services, consulting, tech, engineering, and business process services—can have in giving businesses the confidence and diligence needed to overcome the first-mover hesitancy emerging as perhaps the biggest barrier to sustainability.

We have a global context of the 17 UN Goals underpinned by roadmaps covering all ESG factors that need to be broken down through ecosystems and organizations that need to collaborate and align (refer back to our outline). Organizations need clarity on three fronts: internal sustainability, client sustainability, and ecosystem influence (refer back to our more detailed piece).

In sustainability, too many still play not to lose—but the right people and organizations in the right rooms can help everyone win.