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Strategic planning for prosperity and sustainability

To survive and thrive in connected global markets, smart businesses now understand they must play a role in creating a better world. Government can help create an environment to facilitate that.

It’s not only the hard business case that is convincing CEOs of small and large organisations to get behind the United Nations plan for a better world; the plentiful growth opportunities are now well-documented. It’s also a sense of corporate citizenship — these leaders are human too.

Financed to the tune of trillions of dollars, overwhelmingly the most accepted framework is the UN’s Sustainable Development Goals (SDGs). Launched in 2015, this sets 16 interrelated targets — from health to climate adaptation — that are monitored and measured, with a further one focusing on partnerships to support the rest.

How is sustainable development creating opportunities? Listen to Felicia Jackson, a senior consultant with Contented Ltd, addressing a workshop in 2019 on transport and energy.

By opening up new revenue streams, building resilience into supply chains, helping recruit and retain talent, engage investors and partners, and earn the trust of stakeholders, the SDGs have become a road-map to shareholder value and future growth.

In supporting these global goals through innovation, cross-sector collaboration and business transformation, enterprises are helping address the most urgent problems faced by society, industries, cities, countries and businesses. According to a recent survey, the top ‘business ready’ SDGs Include Decent Work, Health and Responsible Consumption/Production. The Sustainable Development Goals (SDGs) represent tremendous investment opportunities.

Doing well by collaborating for the greater good

Research by consultants Frost & Sullivan and GlobeScan with business network CSR Europe has shone a light on trends in global transformation that are shaping the future of societies and their economies. In 2007, interviews with business leaders around the world identified more than two-thirds who thought investment in sustainability gave them a competitive advantage or an opportunity for growth.

Nine years later, that had risen to three-quarters, with strategic partnerships seen as the most focused strategy. Nearly half the CEOs surveyed believed growth into the next decade would depend on this collaboration. However, technology is speeding up the need for working together in order to navigate an increasingly complex future. The authors believe the convergence of these two factors will open up new ways to create value.

Public-private partnerships can also play an important role in supporting SDG focus, for both collaborative working and collaborative project financing. Innovation hubs have sprung up around the world from Beijing to Birmingham; SMEs are helping address working conditions, climate action, responsible consumption and production, health & wellbeing, industry innovation, and equality.

To illustrate, the report analyses how universal Quality Education (Goal 4) can help address hunger, poverty, gender inequality, and ability to find decent work. Sustainable Cities & Communities create the chance to build infrastructure for energy, transport, water, waste and healthcare. This Goal 11 is also a catalyst for tech innovation to make living spaces more collaborative, inclusive, navigable, informed, safe and enjoyable, it says.

How should local government teams react to the climate emergency?

It’s the local teams who, in practice, are saddled with the burden of tackling the climate emergency now declared by more than 1,000 jurisdictions around the world. Where do they start? How can they identify and prioritise the real challenges?

Climate heating impacts on many areas of citizens’ lives. From health and education, to energy and travel. Take just transport, for instance: while railways and roads, and even signs and lighting, may all need upgrading, it’s not just about infrastructure. What then are the actual issues at stake? Where should councils direct their scarce resources? How can they make informed decisions?

The universally-recognised Sustainable Development Goals (SDGs) offer a powerful tool for strategic planning. They allow local authorities to examine issues from the point of view of society and the citizens themselves.

A Special Report published by the Intergovernmental Panel on Climate Change in October 2018, describes “enormous harm” that a 2°C average rise in global temperatures is likely to cause, compared with a 1.5°C rise. Yet, it asserts, with concerted ambitious action, it may still be possible to limit heating to the lower threshold.

In November 2018, the major UK cities of Bristol and Manchester declared a climate emergency, setting targets for carbon neutrality. Since then, 19 countries have echoed concern for climate heating with more than 1,000 places covering 224 million citizens.

When a community is hit by a flood, what if children can’t get to school because a bridge has collapsed? In 2005, in an inundated Carlisle, UK, more than 63,000 homes were left without power. Poor people are less likely to be covered by insurance. In a heatwave blamed for 35,000 deaths across Europe in 2003, more women than men over 45-years-old succumbed.

The SDGs prompt us to think about the interconnected issues and how government might help manage risk and mitigate impact.

Engaging the forces of change

Citizen action and investor pressure are two key forces creating the shift, according to Felicia Jackson, a senior consultant at Contented Ltd, a communications company focusing on change and innovation.  She says organisations need to tell an authentic story of who they are, what they’re doing, and how they are making a difference.

“Consumers want to know that companies are taking action,” she says. “They want to know that what they are doing in their day-to-day lives is not making things worse, but actually making things better. Ten years ago companies told a good story but there was no integrity. These days, you can’t afford not to have authenticity.”

Investors want to see companies publishing information effectively on the risk to their business from climate change — something which is not included in traditional financial reporting. An international Taskforce for Climate-related Financial Disclosures was set up in 2015 demanding that companies report on danger from climate change.

Following wildfires in California, US utility company PG&E settled for US$11 billion with insurance companies. They were seeking compensation for claims from homeowners and businesses in connection with fires sparked by the utility’s equipment.  It followed a US$1 billion payout to local governments and state agencies arising from fires in 2017 and 2018.

The SDGs are another story, says Ms Jackson, aiming for an end to hunger and poverty and to ensure that no-one is without access to energy. “It’s a whole new way of doing business — and the scale of the finances are hard to comprehend.”

The IEA estimates U$30trillion for decarbonising the energy sector, while the International Financial Corporation calculates US$12trillion in business opportunities to meet just four of the 16 goals.

“We’re undergoing a fundamental paradigm shift in how business operates.  Traditionally, directors have had just one objective — to maximise financial return to shareholders.  People are now beginning to realise that this not good enough; you don’t have a business if no-one’s got any money!  Companies have a far wider responsibility for how they act and it’s having an effect on how they operate and the stories they need to tell. Understanding this sea-change puts them ahead of their peers.”

The communications imperative

When a hurricane known as Katrina struck the town of New Orleans, US, in 2005, a major energy company found its operations base under water.  As a large automated business, it had a back-up system.  This also flooded and the whole company was out of action for a week at a cost of $800m.  No such risk had been mentioned in the financial accounts. However, the company had declared this possibility over the previous five years to the Carbon Disclosure Project, a database capturing company and city climate risk for investors and customers.

A key challenge for organisations in the developed world is to understand: How can we identify and quantify the impact of our actions? How can we address the SDGs? An important step is to develop internal reporting procedures, understanding what’s going on and what impact you are having on the world around you — learning what your reality is. 

“Remarkably, many companies don’t even know that,” Ms Jackson says. “They need help to understand the impacts of their own activities.”

Communications are also critical in retaining and attracting staff.  How can companies tell the story of who they are, what they’re doing and why they are making a difference? Prospective employees are asking: “What’s special about his company? Why would I want to work there?”  Existing ones are asking: “What am I doing daily to make the world a better place?”

In some countries, like the UK, there’s something of a philosophical shift: those who think climate change is the most important issue, and those who don’t.  The former understand and see the economic arguments for leadership, especially in areas of technology.  For example, in energy and transport, traditionally an area of excellence for the UK, leaders tend to have better understanding of the potential for growth. 

However, this often not the case.  Transport is very engineering focused and has a tendency to eschew innovations ‘not invented here’.  Many people just don’t see the speed with which change is happening.  One of greatest challenges is getting individuals to understand their roles as change agents.  Ms Jackson adds: “It’s not just about altering one’s own behaviour, but taking opportunities to champion change within an organisation in order to embed sustainable behaviours within a wider tapestry.”

External links

Transport and the SDGs: https://www.unece.org/trans/welcome.html

[See TJ’s 11am email. Dropbox paper]

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