Why social, environmental and economic sustainability are inextricably linked
Gudrun Cartwright, Environment Director at Business in the Community (BITC), discusses why we cannot have economic security without social and economic sustainability.
Social, environmental and economic sustainability are inextricably linked. You can’t have one without the other two. We need to solve our shared challenges now, aligned to the Global Goals (also known as the UN Sustainable Development Goals or SDGs) and BITC’s Responsible Business Map, and put that at the heart of future business success. We have become skilled at specialisation, leading to major benefits for many, but this has its pitfalls. In economics, an externality is the cost or benefit that affects a party who did not choose to incur it. We must consider the externalities we create for people and nature, and become better at understanding our place in the systems we are part of. We must then design solutions to maximise benefits and eliminate harm. Key examples where we didn’t see the consequences coming include lightweight packaging leading to ocean plastic, or diesel cars increasing air pollution. Humanity must own its externalities, find ways to neutralise them, and ultimately turn them into positives.
It is time to stop throwing our future away
What do we need to aim for? A 2014 study of why civilisations have collapsed in the past showed that exceeding ecological carrying capacity and big inequalities in wealth underpinned them all. This is mainly because decision makers were protected from impacts and so didn’t act in time to stop catastrophe. We know we are in a similar situation. But this time it’s global in scale. There’s nowhere left for us to go and start again. So, we need to get into what Kate Raworth in her book, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, identifies as a ‘safe operating space’. Achieving the UN’s Global Goals will put us on track to finding that safe space if we are ambitious enough. Net zero carbon by 2050 at the latest will be vital, but this needs to be done by 2030 for a realistic chance of keeping temperatures below two degrees by 2100.
How will we get there?
As Albert Einstein said: “madness is doing the same thing over and over, expecting different results.” So, what are the key actions for business?
Understand the unique risks and opportunities for your business
Are you fighting for talent? About 75 per cent of millennials want to work for a company that has purpose at its heart1. Are you competing on price, rather than value? Unilever has found that most of its growth has come from sustainable products. Are customers changing their behaviour and expectations? Might they? Most people did not see the massive shift against single-use plastic coming, but now it is an absolute priority. Can you answer your investors’ questions about what you are doing to ensure they can trust in your long-term performance? Is your supply chain vulnerable? Do you have transparency? How would you respond to an issue such as campaigners putting notes in your products telling customers what they had in their hands were made in sweatshop conditions? Or asking where your products come from? The latter question spurred home-improvement company Kingfisher, and others to set up the The Forest Stewardship Council (FSC) to take care of forests and the people and wildlife who call them home.
With everyday pressures it is easy to get stuck in short-term thinking and measure success by quarterly and annual achievements. Japanese companies think and plan generationally; National Grid has stopped quarterly reporting; Siemens have put solving some of our most critical challenges at the heart of its strategy, using digital technology to improve how we manage health, energy, mobility, making our cities more sustainable. If we know that without swift and radical decarbonisation we will have a three- to four-degree warmer world by the end of this century, which is potentially incompatible with our civilization. How are you playing your part in achieving net zero carbon emissions and using technology to enable more people to participate in the economy? Barclays Code Playground is helping seven- to 11-year-olds to learn coding through fun challenges, so they have the skills they need for jobs that don’t exist yet.
Start to find the opportunities that deliver in a joined up way
PwC have found that enabling flexible working has cut costs and the need for physical property, improved employee wellbeing and been a big pull to attract talent, as well as saving significant amounts of carbon. Drax are committing to improving social mobility for a million people by 2025 as they accelerate the transition to zero carbon. They are supporting schoolchildren to build electric vehicles and racing them in Hull for the first time, with the winner getting an apprenticeship at Drax.
Zeid Ra’ad Al Hussein, former Head of Human Rights said that global leaders are ‘weak, shortsighted and mediocre’. Politicians are struggling to make good decisions that put us on a path to a future we are proud to leave for our children. People are becoming fed up; right-wing populism is growing around the world. Conflict is brewing. Schoolchildren are striking. Ten years ago the Intergovernmental Panel on Climate Change (IPCC) said a defensive approach was one of the worst-case scenarios. It seems that we are well onto that path. You have the power to change this. By understanding the unique risks and opportunities for your business, being strategic, finding opportunities that deliver in a joined-up way, you can define a path that navigates towards the safe space we need to get to. You can build a new, prosperous model for your business, with purpose-driven profits. You can influence governments to put in place the policies and regulation needed to ensure we have a just transition to a net zero carbon, resilient, restorative society. You can provide opportunities for people to have meaningful jobs with dignity. Together, we can be the change the world needs. Time is short. The opportunities for those who move now immense. The risks for those who don’t, existential.
- The Deloitte Global Millennial Survey 2019. Available at deloitte.com
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