If one thing is constant in our modern world, it is that we are constantly changing.
The same can be said for the field of corporate sustainability. It feels like every day there is a new framework, a new ranking, a new concept that promises to change the field. What are the next generation frameworks and ideas that will shape the strategies of corporate sustainability leaders over the next 5 or so years? Looking into our crystal ball, we’ve identified a few – what do you think?
1. Beyond science based GHG targets
One trend gaining traction in the field of corporate sustainability is setting science based targets- GHG reduction targets (those in line with the level of decarbonization required to keep global temperature increase below 2°C compared to preindustrial temperatures, as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC)). Already this year, a number of companies have set new goals and strategy under the Science Based Targets Initiative (SBT), including Walmart, Tetrapak and Kering. While there is still a long way to go before this concept is commonplace, we’re looking to see what’s next.
- Land and water targets: WRI and Mars Inc. have worked together to develop new science based targets around water and land use. Employing the SBTs GHG methodology, the targets into account the latest science on theglobal carbon budget, water stress and other ecological limits.
- Social impact goals: At the heart of SBTs is a desire to set goals that are based in fact and backed up by research. In the future, we expect to see this rigor applied to companies’ social as well as their environmental goals. As an example – research shows that the most gender diverse companies are 15% more likely to outperform the least gender diverse companies, while the most ethnically diverse companies are 35% more likely to outperform the least ethnically diverse. In the future, will we see companies setting goals based on such research, aiming for the workforce balance that is show by research to correlate to higher performance?
2. Matrixed approach to impacts
In how companies set sustainability strategy and goals, organize their reports or communicate with stakeholders, ESG topics are often presented in silos. In particular, environmental issues are presented in isolation from their related societal impacts. But how companies understand and communicate on these topics is changing – a more complex, matrixed approach is emerging.
For example, the circular economy is most often presented as a framework for reducing use of non-renewable resources, including materials and energy. This model keeps products and materials at their most productive for as long as possible, circling what would have been “waste” back into a circular manufacturing cycle. But, the circular economy isn’t just about reducing resource use, it is about improving social and economic outcomes as well. This new model opens up new service economies in product repair and refurbishment and raises the income potential from waste collection and processing. By some estimates, potential revenues from recycled e-waste in the EU could total more than two billion Euros (2014 estimate). And, of course, with less waste comes less environmental degradation, particularly in those communities that are often the recipients of this waste – such as China which, according to United Nations data, receives about 70% of electronic waste globally.
3. Radical transparency to radical collaboration
Over the last several years, we’ve heard a great deal about radical transparency – the idea that companies, rather than limit their communications to carefully crafted annual or quarterly sustainability publications, would throw open their doors and provide stakeholders with real time updates on the progress and performance of their sustainability programs. As an example, since 2013, H&M has published a full list of its suppliers down to Tier 2 fabric and yarn suppliers. The move was made to demonstrate that H&M has worked hard to develop transparent, strong relationships with suppliers, and the company intends to update the list every three months. This drive toward greater visibility into supply chains and operational performance is leading to new innovations that hold real promise – the new platform, “Trase” (TRAnsparence for Sustainable Economies) aims to bring “radical transparency” to global supply chains, tracking commodities from producers to end purchasers.
Over the next three to five years, we expect this trend toward greater openness and transparency to morph into what we are calling “radical collaboration.” In the quest for faster change, better results, more impact, companies will find new ways to partner with others to solve big challenges. The SDGs are a first step in this direction – providing common goals for multi-sector actors to rally around. Particularly as companies move into parts of the world with lower purchasing power and more constraints, we’ll see big corporations partnering with social entrepreneurs to learn how to do more with less and to innovate for new use cases. These collaborations will be bolder, more strategic and more integrated into the business than ever before, with a high potential for impact
What do you think will be the major trends shaping the future of corporate sustainability? Share with us @Context_Group on Twitter!