Wednesday, 26 February, 2020
Capitalism is great. It is the driver of innovation and it celebrates progress. Over the last 100 years, mankind has come up with endless new solutions. As a result, globally, millions of jobs were created, expanding access to education and poverty levels decreasing significantly. We are healthier, live longer than ever before in history.
Nevertheless, the form of capitalism we have today is not sustainable for business or the planet. We are facing a climate change crisis, and we know the FridaysForFuture campaign tells us the truth. The campaign is a youth-led international strike to protest government and business inaction on climate change. It is potentially one of the largest environmental protests in history, with 2,500 events scheduled in over 150 countries.
We need to act now. We need to have a conversation about what businesses can do. Although businesses play a massive role, current action does not match the ambition and pace necessary to achieve Sustainable Development Goals by 2030. Sustainability is still considered a nice add-on. Business is doing business; afterwards, they try to get a little green on it.
As the world faces many complex and interrelated challenges, it is clear our fundamental systems are broken. Unless we grasp the larger picture in which these challenges sit, we will only end up addressing symptoms or offering simplistic solutions.
Running a business in a competitive environment may be difficult and there are other priorities for the survival of the company. However, it is possible to change how things are done. Business, as usual, is not an option for a future-proofed economy in which, by mid-century, nine billion people live well within the limits of the planet.
A variety of drivers are forcing companies to confront the inadequacy of business as usual. For instance, reactionists such as FridaysForFuture, consider the push towards boundless economic expansion being in conflict with the planetary realities.
Secondly, a growing number of studies show that workers and especially millennials want to work for companies that have a positive impact on the world and whose values align with theirs. Responding to this desire, smart companies are able to attract the right talent and keep them motivated to drive greater productivity and efficiency.
Thirdly, a company’s supply chain practices can generate significant positive or negative impacts in the areas of human rights, fair labour practices, environmental progress and anti-corruption. However, in a study conducted by the United Nations Global Compact, companies ranked supply chain practices as the biggest challenge to improving their sustainability in performance.
Businesses are here to serve societies needs and must do so in a sustainable way. They, therefore, cannot continue to operate as independent members of society disregarding the impact of their decisions and actions.
Capitalism needs to evolve, and that requires different types of leaders from what we have had before. Not better leaders, because every period has its own challenges, but leaders capable of meeting today’s challenges.
The assertion that companies are responsible for the stewardship of multiple capitals is evident in a number of contemporary initiatives. The United Nations Global Compact exists to help companies of all sizes and from all sectors understand and put into practice good corporate stewardship.
Enlightened companies and investors understand the role business has to play in the economy. Those who do not are destined to be left behind in the coming years by missing opportunities and miscalculating risks and uncertainty. Such a future can, and must, be averted in the interest of business, society and the planet alike.