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This is the Sustainable Futures Report for Friday 7th July. I’m Anthony Day and welcome to another episode. The main part of this week’s report is my interview with Tony O’Donnell of Cambium LLP. We’ve spoken before about risks and uncertainty. Now hear what Tony has to say about the future of sustainability in this world of challenges, opportunities and innovation.
But first, a few headlines.
The big news this week will be the G20 summit in Hamburg, but of course that happens on Friday after this report has been published. All eyes on Donald Trump, who could be in for a rocky ride. Physicist Stephen Hawking has already attacked him for repudiating the Paris Agreement saying:
"We are close to the tipping point where global warming becomes irreversible. Trump's action could push the Earth over the brink, to become like Venus, with a temperature of two hundred and fifty degrees, and raining sulphuric acid," he told BBC News.
"Climate change is one of the great dangers we face, and it's one we can prevent if we act now. By denying the evidence for climate change, and pulling out of the Paris Climate Agreement, Donald Trump will cause avoidable environmental damage to our beautiful planet, endangering the natural world, for us and our children.”
President Trump also suffered a setback when a federal court ruled that the Environmental Protection Agency could not freeze the implementation of a rule requiring oil and gas companies to fix methane leaks in their equipment.
More on this next week.
Here’s the interview:
This is the link to the report that Tony mentions: http://report.businesscommission.org/uploads/BetterBiz-BetterWorld.pdf
My guest today is Tony O'Donnell who is a partner with Cambium. Cambium is a firm which for nearly ten years has been helping organizations of all sizes to adopt a smarter approach to translate their ideas or research into sustainable and profitable business opportunities.
Today he's going to tell us why he thinks that uncertain times provide sustainability leaders with a big opportunity. Now I'd like to start off Tony by asking you how do you define sustainability in this context?
That's a good question. Thanks for having me here today Anthony. I don't think we define sustainability any differently to the ways that most practitioners define it. I guess that we go back to the Brundtland Commission definition for many years ago, where we believed that sustainability is about managing business or your organization in such a way so that you're not looking just after today's concerns of meeting your needs but you're also enabling the needs of others in the future to be able to meet their needs. So leaving a sustainable legacy in that context.
And you also talked about sustainability leaders, are we talking about politicians like, Caroline Lucas, industry leaders like Paul Polman or are we talking about people who are sustainability officers within organizations?
I guess that there will be a large diversity of people who are listening to your podcast, that come from a variety of different backgrounds. I don't think it'd be for me to sort of say who can or can't be a sustainability leader. But I suppose in the context that discussion we're going to be having today will be thinking about sustainable innovation and be thinking about how that might be applied to organizations and I guess most primarily businesses but I wouldn't suggest that some of the thinking here wouldn't be relevant to any of those other parties as well.
Right, uncertain times. We are living in uncertain and changing times and not least in the UK because of course, we've had a referendum and we've had a general election and in both of those, the Prime Minister seriously misjudged the feeling of the electorate. So we've voted to leave the EU almost to everybody's surprise and the general election instead of delivering a landslide majority wiped out the prime minister's majority. Now in that context, is this uncertainty a risk to sustainability or is sustainability part of the solution?
Well, I definitely lean towards the latter. I think you're absolutely right about the uncertainty that seems to be hitting us particularly here in the UK at the moment. We may be all the suffering from sustainability fatigue I suppose or uncertainty fatigue. I think that coming back to your question, our view, our thinking about in sustainable innovation, these uncertainties is in a general sense increasing business risk. They're probably making boards feel more cautious about long-term investment and the risks that accompany these uncertainties are likely to keep some of those business leaders awake at night as they try to work out how they're going to ensure their sustainable profitability and indeed the competitive advantage to their business, when the futures we've all said is not clear. So business leaders are used to making decisions when there are risks but these risks seem somehow slightly larger and more systemic and with great potential for disruption from business as usual.
So I think for sustainability leaders it might be somewhat intimidating to kind of raise the topic up but I think that our contention here is this may have been an effort... never been a better opportunity and I was reading a blog online the other day reporting on sustainable brands conference in Copenhagen, where indeed sustainability leaders were asked what kept them awake at night and their response was a bit different perhaps business leaders it was about things like, biodiversity loss, climate change, inequality, recession, and factors such as that and maybe there's a difference in the concern of business versus that of sustainability, that means connecting these two particularly with innovations - could be challenging but going back to your question, I think that today's business uncertainties offer a really big opportunity to reestablish or reconfirm the connection because in a way sustainability provides some certainties regarding new opportunities in an uncertain world or at the very least a stable target. The question is how do you leverage that opportunity?
Right. That's interesting because was it Mark Carney who said: "that businesses are pretty good at dealing with risk but they're rubbish at dealing with uncertainty" ? So I suppose what we've got to try and do is to approach the uncertainty and break it down as far as we possibly can into definable risks. You're talking, I believe about innovations and opportunities in that way, let's say a bit more about that.
Well, I guess that if you kind of try and reconnect with the business in these uncertain times, it's probably worth starting from the fact that sustainability in the business context, in particular, can add tangible value to any business indeed by positively impacting their profitability and I suppose you think at a high level, it means the sustainability could enhance or grow revenues through new goods or services that offer value to the new and growing sustainability innovation market. So I'm going to talk more about those in the moment hopefully. But secondly, of course, you can improve margin through optimization and costs, sustainable reputation and brand can improve talent acquisition and retention and increase pricing power by offering greater brand value.
And then more and more examples of businesses that see that value in addition to sort of the flagship businesses that seemingly a lot of individuals talk about like, Unilever as we know recently supported, I think they grew their sustainable living brands grew 50% faster than the rest of the business and that delivered more than 60% of Unilever's growth. And surveys of wider organizations, for example, last year’s Radley Yeldar list of top companies for social purpose included a wide diversity of organizations ranging from Lewis banking in the financial services sector through Philips in manufacturing, British Land in property and Pearson in publishing. So I think the thing that we have to think about is how can sustainability and smarter way of doing innovation actually show to colleagues in your organization how they can make more of an opportunity out of sustainability. And our thinking is that we have an approach called smarter innovation that accelerates the development of opportunity
Before we get into that... into detail on that, how can you show that these business benefits of sustainability and innovation provide an antidote to the uncertainties which are facing businesses in the moment?
Yes. Well, I guess that if all those parties who take an interest in sustainability are really thinking about some challenges that affect us over the slightly longer term and we'd call those global challenges, global sustainability challenges, I will explained a bit more about what I mean in a second but overall I think that smarter sustainable innovation is all about think taking the organisation to think about how meeting some of those slightly longer-term challenges allow them to see through the current uncertainty and to develop new ways of working that actually bring longer-term value to the business.
So many of your listeners are probably familiar with global challenges, the things I'm talking about here are the mega trends driven by population growth, the associated resource scarcity and maybe increasing global health risks. Many of these challenges are driving demand for new innovative solutions that address problems that affect all parts of society, they may have economic benefits, in terms of providing work and economic growth such as sustainable cities housing and transport. Conversely, they may be about ensuring sustainable supplies of clean energy and food and water and maintaining biodiversity in the face of changing climate that they may have social benefits in terms of meeting rising aspirations for good education or for ensuring justice across people everywhere.
Yeah, I think I'll agree, I might put the emphasis in slightly different places because certainly energy and climate change are both going to be major challenges for the whole world aren't they?
Indeed they are but although there are challenges, there are also big opportunities for innovation. And so my argument would be as you're going to use these longer-term challenges to connect back with a sustainability agenda and to help an organization see past the uncertainty, may be a good framework to consider might be the United Nations sustainable development goals
Right. Now we're going to talk about that in a future report but perhaps you just like to tell us a little bit more about them because I don't think they're particularly well known in the UK, so what exactly are the United Nations sustainable development goals?
Well, "the United Nations sustainable development goals", which I think some people may have heard of as the Global Goals, set out a whole range of targets that governments all around the world have signed up to under the United Nations, where they're committed to meeting these goals. You'll find details about them on UNSDG by putting that into Google. And given these commitments, the goals and targets are beginning to get translated into government policy in the form of industrial and economic strategies and an analysis of them in terms of the sustainable innovation opportunity they create has been recently presented as part of the business and sustainable development commission's report. And the business and sustainable development commission represents a wide diversity of stakeholders from different businesses, they range from organizations like, Alibaba to JPMorgan Chase and from Ericsson to Mars and this report estimated that if the goals are met on a global basis then potentially they can create up to 12 trillion of new opportunities in business savings and revenue per year. And particularly in four economic systems such as cities and infrastructure, energy and materials, food and agriculture and health and well-being. And as you know this builds on the fact that business has a long-term involvement in sustainability and it builds on the earlier work of the UN Global Compact, so if people haven't heard of the sustainable development goals, it's likely your colleagues will refer to the UN Global Compact. And if reassurance is required about how this can benefit business, there are already 9,000 businesses worldwide who are signatories to the Global Compact and it might also enable you to highlight the competitive advantage that businesses whether they're multinational enterprises or SMEs, they will derive from their participation.
Right, let's move on to another point. Now technology is racing ahead in all sorts of directions. At the moment people are talking about Big Data, they talk about the Internet of things how do you see this affecting us, how you see this affecting sustainability and the future?
Well, I think that you're absolutely right and these technologies are going to affect all walks of life and definitely going to affect sustainability and our belief is that one of the big opportunities here is that as the underlying drivers and cause and effects of the global challenge is very broad and diverse, largely because they're systemic in nature and means they're highly complex with many interdependencies, there's a need to acquire a baseline of information, indeed insight to establish the basis for new sustainable business models and ways of working that will help organizations and governments achieve these sustainable development goals.
And the good news is that you say the recent advances in information technology are potentially game-changing and change an idea into the art of the possible. So even if you see IT only as playing a supporting role for the kind of innovation that you might have in mind, the advances in this area, really so rapid it needs to be given probably special attention.
Yeah, I think also there's going to be a big social upheaval as a result which we really haven't addressed yet, we haven't even started talking about. Because we have the paradox in this country for example, that people are saying that you're going to have to work until you're 70 years old before the state will be able to afford to pay you a pension and on the other hand we're saying, AI-artificial intelligence is going to wipe out the vast majority of jobs. So I don't know how this is going to work, I don't know whether you've got ideas on that?
Well, if you look at some of the ideas that emanate from the sustainability movement, they are also recognizing those changes. I think it's impossible to predict what those changes will be at the moment but certainly, it ought to create more space for part of society to any rate to spend more time considering how some of these longer-term problems might be addressed. But I think that smarter sustainable organizations can make the best of the opportunities by at least evaluating what those techniques are and getting ahead of the game and applying them to some of these longer-term goals. Because as the report I alluded to earlier and explained, there are big opportunities out there for those businesses and organizations that can bring solutions to bear because they are dealing with such pressing compelling challenges that are facing everyone everywhere.
Well, what about the state, what about the public sector in all of this. You talk about businesses but the tremendous sign of economic activity is in the public sector. Do you see the public sector actually keeping up with all this sort of innovation?
Well, the public sector I think will get involved as a consequence of the fact that there are government commitments to support sustainable development goals. And in our view innovations are not just going to be about business or the public sector. It's going to be about people and many stakeholders whatever their background are interested in creating a smart sustainable future. So everybody's got ideas that can be contributed, I mean academic researchers may have new scientific insights, SMEs may have new innovative ideas and maybe multinationals will start to look at these new sustainable opportunities to build new markets that could underpin their future success. But ultimately the complexity of the global challenges means that we've got to collaborate better. And as in nature, where an ecosystem strength is linked closely to the breadth of biodiversity, successful smarter innovation collaborations will also find strength in the diversity of skills, experience, and motivation.
So I see these collaborations coming from many different disciplines across science, engineering, perhaps the arts and they'll also involve participants from a wide range of organizations not just from the private sector but also the public sector, let's not forget also NGOs and charities. But I think the key thing is that unlike traditional approaches to innovation which kind of just puts people into a space and expect things to happen through organised serendipity, smarter innovation collaborations that are focused on these complex problems can't afford to leave those vital interactions and connections to chance, they've got to adopt a more predictable structured approach focused on those challenge areas, And this is where sustainability leaders who often use this kind of approaches to deliver progress already to date can actually play a great role. They have a lot of experience in building, for example, new sustainable supply relationships and as a consequence, I think that would be placed to lead these initiatives through their networks and their expertise.
Well, you started by saying... by telling us about what keeps people awake at night, what messages have we got to make sure they sleep soundly?
That's a really good question and I alluded to the fact that.... about the conference that the sustainability leaders had a diverse and perhaps different perspective to people in business but the sustainability leaders were also asked what was it that gave them hope given the challenges that they were concentrating on and the consensus was that it was a combined sense of purpose amongst people within their organization that allows them to turn the organization to focus and to have a greater sense of purpose particularly as it relates to sustainability. So I think that one of the ways that which we can help everybody sleep at night is if sustainability leaders could lead this transition and enable this much bigger impact faster by harnessing the profit motive and catalyzing the more new certain development of these sustainable business opportunities. I think if you think about it this is what leading businesses right across all industry sectors such as a Aviva, Erickson, Grundfos, Pearson, Unilever, and others are also interested in the value that sustainability can deliver and I think that is a good starting foundation.
Right. Just to be devil's advocate, how do we deal with the companies that see sustainability staring them in the face as a threat to their profits, like the oil companies, like the coal companies which are going to have to fundamentally change, in fact, give up their core businesses that they are dealing with at the moment and may even not survive all together?
Well, you make a very important point and I think there's going to have to be a lot of transition for a lot of organizations, a lot of individuals as we make the move to a more sustainable future. That change is inevitable and organizations will have to change and they'll come to a conclusion, I guess as to when the time is ready for them to change at different rates. I think….
Will legislation play any part in this? Will they be legislated out of existence?
Who is to say, ultimately that will come around for the... in democratic countries to their population saying, that they want to see that change happen and that may not be as fast as some people may like but from my perspective, I think trying to be pragmatic about it and this is that what I've tried to outline in our conversation this morning is a pragmatic approach I hope and I think we're looking for ways in which you can increase the traction with individuals and parts the organization that maybe only had traditionally been motivated by short-term profit motivations. And in a time of uncertainty maybe there's an opportunity for sustainability leaders to get them to shift and say: there actually could be some solutions to our short-term problems by focusing on these issues that have got their long-running challenges and therefore will need to have solutions in the medium-term.
So in my view as sustainability leaders, we can all play a part in helping to support that transformative role and helping colleagues to manage the uncertainties. And I go back to these three ways: firstly by raising awareness of these new market opportunities, I urge you to look at the report I alluded to earlier and, secondly by understanding how technology will play a role particularly, data-centric technology in being able to provide solutions to those long-running problems and finally by bringing together people and by leveraging expertise that many many leaders in sustainable projects have had in the past of bringing meaningful multidisciplinary and multi-organizational collaborations to bear and that by promoting this smarter sustainable innovative approach, sustainability leaders can help an organization maximize its economic value in all markets and enabling at the same time hopefully a sustainable future for us all.
Tony, thank you for giving us a lot to think about, I'm quite sure. On the blog we'll put links to the reports that you've mentioned and you can find out more about Cambium and Tony O'Donnell at cambiumllp.com.
So thank you again.
Thanks very much for your time. I've enjoyed it.
Two thoughts to close.
Across the world some 20,000 plastic bottles are sold every second. Yes, that’s 20,000 every second. That’s about 26 million since you started this podcast. Only 7% are recycled; the other 93% go into landfill or end up scattered across the countryside or floating in the sea. We are rapidly approaching the point where there will be more plastic in the sea than fish. More about this in a future Sustainable Futures Report. In the meantime have a look at
This week a swarm of Welsh Black Bees was found in a dustbin on Anglesey, North Wales. These are very rare native wild bees. Council pest controllers, mistaking the totally black bees for yellow and black wasps and without seeking help from local beekeepers, wiped them out. What hope is there for wildlife in the face of such crass incompetence?
Never mind, let’s be optimistic.
There will be another Sustainable Futures Report next week for one thing. I’ll tell you about the lady on the train and what she told me. We’ll know what happened at the G20 summit as well.
I chaired a conference in London this week, so don’t forget that if you need a conference chair, a host for your awards ceremony or a sustainability keynote you can contact me via email@example.com. And did I mention Patreon? Yes of course I did. patreon.com/sfr
I’m Anthony Day. That was the Sustainable Futures Report.
Have a great weekend.