Building Sustainable Legacies


Pessimism in the developed world runs rampant

This disturbing declaration came from a 2017 study of millennials by Deloitte, a financial and risk management company.  Deloitte has been surveying millennials for the past 6 years and this year they found more general anxiety about the future than ever before.  The concerns expressed included terrorism, income inequality, crime and corruption and climate change.  Interestingly, the participants regard businesses as a force for social impact, however, they believe that companies are falling short in applying their capabilities to alleviating society’s challenges. So where is the disconnect between what millennials believe corporations could contribute versus what they think they are doing to address these overwhelming social issues?

Last month Katrin Muff’s blog was related to this theme.  She wrote about her frustration with companies that cannot see beyond their own short-term self-interest.  Obviously, she is not alone with this grievance.

Over the past few years, the news has been filled with stories about companies that acted solely in their own self-interest with calamitous consequences.  Consider the Volkswagen emissions scandal or BP’s Deepwater Horizon oil spill in the Gulf of Mexico. These companies flagrantly neglected all responsibility to the environment in pursuit of profits.  And, thus, both companies suffered reputation and financial damage.

While most companies do not commit fraud as was the case with VW, many do operate as if their only reason for existing is to create as much wealth as possible for their shareholders. These companies describe themselves by the products they make and the profits they generate. Consequently, they are in danger of becoming irrelevant to customers, employees and investors, all of whom are becoming increasingly impatient with corporations that lack any social purpose.

On the other hand, many companies do take their responsibilities to society very seriously.  Rosabeth Moss Kanter, a widely-recognized expert on organizations, says that an increasing number of successful companies emphasize purpose, values and long-term institution building.  These purpose-driven companies believe that they are inherently connected to society at large, and thus have obligations as members of society beyond mere economic transactions.  That is not to imply that financial success is unimportant to these companies.  In fact, Kanter says that they embrace financial success partly if not wholly so that they can carry out their commitments to society.[1]  And in fact evidence from a 2014 Deloitte study shows that companies focusing on a broader purpose are more likely than others to achieve success for the long-term. The confidence that stakeholders place in these purpose-driven companies tends to lead to investments and growth.

Most of us want to work for companies with a distinct purpose and clear values.  A  2016 study of purpose in the workplace conducted  conducted by the consulting arm of PWC, showed that  a large percentage of all generations in the workforce, not just millennials, want to find purpose in their work. The study emphasized the following:

“A truly purpose-driven company must have purpose as its guidepost for decision-making—including the opportunities it decides to pursue and not pursue—to demonstrate commitment to responsible business leadership.”

Unilever, the company that Katrin cited in her blog last month, serves as a great example of a multinational corporation that lives its purpose every day. Their vision is as follows:

“Unilever has a simple but clear purpose – to make sustainable living commonplace. We believe this is the best long-term way for our business to grow.”

This purpose is embedded in all of Unilever’s decision-making including how they interact with their shareholders, as well as how they develop and package new products.

It is time for all companies to critically examine their roles in society. Certainly, at times our global challenges can seem overwhelming so it is no wonder that we will see alarming headlines about millennials’ pessimism! Nevertheless, we can’t become so discouraged that we are paralyzed.  It is time for all companies to act with purpose.

Of course, the business community alone can’t fix everything.  However, those of us in this community can and should contribute to finding solutions to our world’s challenges, which, at the same time, will help us make our businesses more profitable and sustainable.  And those not working in the business community can and should hold us accountable for more than merely creating wealth for our shareholders.

[1] Kanter, R.M. (2015) How purpose-based companies master change for sustainability. In R. Henderson, R Gulati and M. Tushman (Eds.), Leading Sustainable Change (pp.11-139). Oxford, United Kingdom: Oxford University Press.

Author: Dr. Kathy Miller Perkins 

Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.

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Imagine Corporate Governance for a Sustainable World

I was asked to speak at the Zurich-based conference organized by Frank Bold legal services entitled “Corporate Governance for a changing world”. This conference is part of a global thought leader engagement process with events in London, New York, Brussels and Zurich and aims to develop new insights for new corporate governance. I was mostly impressed by the very impressive turn-out of many of the who-is-who of Switzerland’s relevant stakeholders on the subject, featuring prominent thought leaders from business, government, academia, civil society and consulting.

Given the nature of the 4-hour brain-storming session and the Chatham rules, I am able to share only some general personal insight that particularly struck me. While the pre-reading material and preparatory questions seem to be very detail-oriented, the various speakers (me included) highlighted the need to step back and embrace first the bigger and broader picture. I had suggested that we consider corporate governance in the context of the challenge of living well on one planet, the WBCSD Vision 2050 goal. This allowed me to frame corporate activity within the “safe operating space” of OXFAM’s doughnut model which includes on one hand the outer limits of the planetary boundaries (based on work done by the Stockholm Resilience Center) and the inner limits of social foundation (based on RIO+20 work).

The echo was really interesting and rather than facilitating a one-hour plenary session, I broke our high-level group of experts into relevant topical clusters such as voluntary corporate action, responsibility of the board, stakeholder engagement, influencing the regulatory environment, the purpose of the organization, incentivizing the existing system, and shareholder responsibility. I was deeply impressed by the depth and extent of these discussions and the creativity and engagement that emerged. Interestingly, the largest group and energy emerged in the area of influencing the regulatory environment and better understanding the corporate board to influence the purpose of the corporation.

I look forward to see what happens with a handful of really creative and provocative ideas to change the landscape and use the influence of investors to entice the management of companies to take decisions in favor of society and the planet. It was such an enriching experience to contribute to such positive and creative new ideas with thought leaders from so many different sectors and industries. Well done to Frank Bold and its local partners University of St. Gallen and University of Zurich for organizing this!


Can companies measure the materiality of their business?

Bob Eccles and the supporters of Integrated Reporting, a global initiative attempting to measure and establish the materiality of sustainability across various industries, are making most likely one of the most important contributions in this area to date. They have just shared the report of the Dutch company Aegon, one of the world’s leading financial services organizations, providing life insurance, pensions and asset management. The “Management Board statement of materiality and significant audiences” is available on p. 12 of Aegon’s 2014 integrated report. On p. 15, the company presents a materiality matrix which clearly identifies seven material issues, along with an indication of the degree of control the company has over each one. The fact that there are only seven issues demonstrates rigor, discipline, and focus. Bob explains further: “on p. 16 the company discusses the trends for five of these issues: (1) Increased regulation of the financial services sector, (2) growing importance of new technologies, (3) changing capital requirements for the insurance industry, (4) persistently low interest rates, and (5) global aging and changing demographics. On p. 17 Aegon discusses the opportunities and risks associated with each issue and explains what the company is doing about them.  The other two material issues are customer service and product performance (discussed on pp. 30-31) and employee engagement (discussed on pp. 32-34). Aegon’s 2014 integrated report is excellent in a number of ways and one from which other companies can learn. For example, this concise 70-page document also does an excellent job in using graphics and text to explain value creation for shareholders and society and the relationships between financial and non-financial performance.”

Let me tell you, if Bob Eccles says this, there’s a good reason to read the report! It is a global premiere to have a company report on this and while this may not be perfect, the next reports will be easier to do and shared learning will occur. I am sharing hopes with Bob that other companies will follow Aegon’s lead and start to incorporate a “Statement of Significant Audiences and Materiality” in their integrated report.


Costa Rica is now running completely on renewable energy

Have you heard the news? Costa Rica has managed to shift to 100% renewable energy! And they are not alone – more and more countries are following suit, and I hope you are part of a community and a country that is also moving in this direction. Is there anything you can do to fasten the pace?

My friend Jan Arend, who I stayed with just recently, just took his family and home off the grid – he was so excited to share how much energy he is feeding into the grid and the many places he found he can save energy. Hats off!!

http://qz.com/367985/costa-rica-is-now-running-completely-on-renewable-energy/?utm_source=huffingtonpost.com&utm_medium=referral&utm_campaign=pubexchange


We are a part of something BIG. Can you feel it?

I am so pleased to share the trailer for the film “Planetary” with you which was released on EARTH DAY — 22 APRIL 2015. Here is what the film promises: “We are in the midst of a global crisis of perspective. We have forgotten the undeniable truth that everything is connected. PLANETARY is a provocative and breathtaking wakeup call, a cross continental, cinematic journey, that explores our cosmic origins as a species.”

More info: http://weareplanetary.com/ / PLANETARY COLLECTIVE

Rent the film today!

planetary


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Is there really a business case for sustainability?

Thanks to a comprehensive, aggregate study completed by the Natural Capital folks, we have now a clear and solid answer: YES. If you need convincing or would like to see some evidence, click here to download their report for free. Happy reading!

 


San Francisco Becomes The First City to Ban Sale of Plastic Bottles | Global Flare

I am so pleased to read this! How soon will other cities follow? How we as citizens support this? What can you do in your local community? http://globalflare.com/san-francisco-becomes-the-first-city-to-ban-sale-of-plastic-bottles/

At BSL, we have made plastic bottles redundant by offering all students a BSL bottle.

BSL-Bottles-sm