Leadership for sustainable business development
The other day I had the opportunity to talk about leadership for sustainability with a small group of CEOs. A great discussion where the focus was not so much on the business value of sustainability – they all knew, appreciated and accepted that – but rather on challenges and opportunities in our roles as leaders. We talked about courage, endurance (or “long-term activation”, as it is called in an interesting paper on Leadership for the Decade of Action, produced by the UN Global Compact), curiosity and empathy.
We were all in agreement that leadership will be crucial for the transformation towards more sustainable business models. And as leaders, we have a responsibility to explore how we lead, as well as what we lead towards. What are the attributes that leaders need, and how can we support our leaders in moving beyond the basic requirements, making some of the bold decisions that come with running a business sustainably? A willingness to collaborate and support each other, we argued, is one of those attributes.
The world’s most important meeting: COP27?
In less than two weeks – from November 6 to November 18 – it is time for the largest annual, and arguably most important, gathering for climate action, COP27, in Sharm el-Sheikh, Egypt. One purpose of the meeting is to follow-up on commitments made in Glasgow. A recent report ahead of the conference (read more here) reveals that there has been some progress, but unfortunately it is still getting worse:
“We are still nowhere near the scale and pace of emission reductions required to put us on track toward a 1.5 degrees Celsius world. To keep this goal alive, national governments need to strengthen their climate action plans now and implement them in the next eight years” -Simon Stiell
The World Meteorological Organization just released new data revealing atmospheric levels of the three main greenhouse gases carbon dioxide, methane and nitrous oxide all reached record highs in 2021. All three gases have increased, and in particular methane. The levels are now 149%, 262% and 124% respectively, compared to pre-industrial levels (read more here).
With the current trajectory we are, according to an analysis of National Determined Contributions (NDCs) that most countries have produced, heading towards a 2.5-2.8 degree temperature increase in relation to pre-industrial times. In addition to this analysis of NDCs (produced by the UN Environment Programme, link here), the analysis also includes recommendations on what needs to be done to get on track.
The themes for COP27 include adaptation, gender, finance, energy, water, biodiversity and solutions (there are 11 thematic days during COP27). The major discussion, however, is expected to be around the concept of “just transition”; how can the transition towards a greener economy benefit all, and in particular those economies that have contributed the least to the changed climate -and who often bear the greatest consequences from a changed climate?
It is quite evident that the longer we wait with reducing our emissions, the more we will have to spend on mitigating and adapting to a new climate. For most of us, the financial and human cost of doing nothing is going to be high. The lack of urgency among many countries and decision makers is therefore likely to create costs for all of us. Good news is, that the COP-process (COP stands for Conference of the Parties) has a very strong participation from the private sector nowadays. I asked Marie Trogstam, Director and responsible for sustainability at the Confederation of Swedish Enterprise (Svenskt Näringsliv) what they expect from COP27:
“For us it is important that we don’t lose sight of the 1.5-degree target. Both climate change mitigation and adaptation will be key. Can we still make it? Well, when I see the drive, concrete technical solutions and the aspirations among Swedish companies, I get hopeful.
Our contributions to a green, and just, transition corresponds well to our values but limiting global warming is also very much in line with long-term and sustainable economic growth. Swedish companies have a lot to offer when it comes to finding solutions to the climate crises, as well as with regard to adaptation. In that way the transition also offers new business opportunities for companies who are serious about sustainability. And if we had a global price on CO2, that opportunity would increase further, which is exactly what is needed to stay within 1.5 degrees.”
Sweden’s new government (and the continued preassure from the private sector)
Sweden recently elected a new center/conservative government. It’s still early days for the new government and so far, I haven’t seen much analysis about plans or visions on the broader sustainability agenda as regards for example Agenda 2030. There has, however, been concerns from both the political opposition as well civil society on the new environmental and climate related policies and some heavy criticism towards the decision to scrap the ministry for the environment, and instead have the minister report to the minister of enterprise and energy (read more here) as well as new, lower ambitions related to the reduction obligation (“reduktionsplikten”) in fuels (if you speak Swedish you may want to listen to this recent episode of Vetenskapsradion Klotet).
The new government has also announced a decrease of foreign aid (there’s been talk of a reduction of core support to multilateral institutions) and a merger of the foreign trade and development cooperation portfolio to one minister. There is probably a lot to say about the merger of trade and aid (with both opportunities and challenges), but I will leave that for now.
The new government comes into office at a time of high inflation and economic slow-down, which could tempt decision makers to prioritize short “quick-wins”, rather than more long-term policies addressing sustainability in general and the climate in particular. The same could be true for the private sector but, it seems as if many of the larger corporations are firmly committed to ambitious goals, even if it comes with costs in the short run. This would indicate that many small or medium sized companies that are part of the supply chain of larger companies, will be incentivized to continue on their sustainability journey.
Unlike what many companies experienced during the financial crises in 2008, the transformation towards more sustainable ways of running businesses seems – at least for many sectors and companies – to be irreversible. The “flywheel” is in motion. Read more in this article for example, where more than 200 companies urge politicians to view the current transformation towards more climate smart policies as a business opportunity that needs political support, or this report from Hagainitiativet showing how some of the largest emitters in Sweden are transforming rapidly.
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My intention was to devote this newsletter to write about social sustainability and about sustainability impact – beyond the basics (“the hygiene factors”). However, I’ve written too much already so I will leave you with a cliffhanger: next months newsletter will feature a little longer piece on how corporations can work with their social sustainability and their impact beyond “do no harm”.
PS Have you tried “the climate game”? Great game that will give you a good hour of interesting discussions with your playmates. Try it yourself; it doesn’t take more than 15-20 minutes.