The greatest chance

A guest commentary by Nigel Salter, founder and CEO of the consulting agency Salterbaxter in London, that is specialising in sustainable strategies.

 
 

Just a decade ago, many people in business saw sustainability as a burden and a cost. The agenda was defined in some sectors by negative incidents that underlined that business was being irresponsible or unsustainable, rather than by positive achievements and benefits. That has now changed. Sustainability is no longer about doing less harm. It is about finding ways to do more good for society in general and the communities we live in. A combination of shifts also mean that sustainability is no longer the barely tolerated guest at the table, but a real and much needed opportunity for businesses to act responsibly with the resources available while finding new growth and customers.

A few examples support that the time to act is now – and has never been better:

• Consumers are increasingly concerned about how things are made, who by, with what and where – and there is increasing evidence that they are changing their buying patterns in line with these concerns. As the customer experience shifts more online, buying becomes more of an expression of personal values and 66 percent of global millennials are willing to spend more on brands that are sustainable. 

• Social media is the perfect channel to start an open and transparent communication with customers to build trust and competitive advantage. However, companies must take it seriously as any indiscretion, mistake or secret will be exposed immediately. 

• In 2015 almost the entire world signed up to the Paris Agreement to keep the world below 2 degrees of climate change – and the main force for delivering this commitment will be business..

• The UN Sustainable Development Goals have created a common framing (197 states signed up to them) of what the world’s most pressing challenges are. They have been described by some economists as the biggest economic opportunity of our generation, with the potential to open up an estimated US$12 trillion in market opportunities (Business and Sustainable Development Commission). 

• Recent research by the Bank of America showed that companies integrating sustainability were less likely to suffer large price declines, and showed significantly better three- to five-year returns on equity than their counterparts.

• It’s not only consumers expecting more from the brands they are buying. Employees are now one of the main driving forces in raising the bar, wanting to work in organisations that have a clear positive contribution to society.

 
Sustainability really is no longer needing to apologise for being at the table.
– Nigel Salter, founder and CEO of the consulting agency Salterbaxter

And even those who are still not convinced of the scale of the sustainability opportunity are finding it hard to ignore the scale of the risk side. The CEO of the largest fund manager in the world, Larry Fink of Blackrock, is one of the leading voices calling for sustainability to be central to the way business measures performance. His latest letter to all leading CEOs was stark: ‘Society is demanding that all companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.’

So what does this new environment mean for business? On the one hand, it provides the unique opportunity to innovate through the lens of sustainability. Two examples happening right now are innovations in materials for the future and innovation for the circular economy:

• A report by the Ellen MacArthur Foundation, ‘A New Textiles Economy’ provides a vision for the apparel industry. It’s one that is restorative and regenerative by design. Clothes, textiles, and fibres are kept at their highest value during use and re-enter the economy afterwards, avoiding the loss of $500 billion worth of underutilised materials each year.

• Materials innovation is moving fast – from recycled ocean plastic (G-Star denim) to mushroom-based leather (Stella McCartney). And underwear brand Wolford has created biodegradable, Cradle to Cradle certified hosiery and lingerie, that use cellulose-based fibres, biodegradable Infinito fibres, and stretch is created by an innovative alternative to elastane.

The other requirement for leading in this new landscape is the ability to see the big picture. The leaders, and those likely to gain the most rewards, have worked out that these challenges need the whole system to change, not just their own operations. And this also requires the creation of new partnerships, collaborations, and new ways of working both within and across sectors. So sustainability really is no longer needing to apologise for being at the table. Quite the opposite: it is one of the biggest opportunities for unlocking growth, producing and selling better products, and – above all – doing good for society and our planet.

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