Farid Baddache, Managing Director, BSR

For decades, the responsibility of delivering sustainable leadership has been left mostly to governments. With rising environmental, social and governance (ESG) challenges against a backdrop of more demanding and critical citizens, however, this burden is proving too much for governments to bear alone.

Businesses – with their vast capital, market power and financial motivation – are both part of the problem and part of the solution. Now under greater pressure than ever to contribute to creating a more sustainable future, they are being looked upon to create more than just jobs and wealth – they are tasked with creating more sustainable solutions to address market needs that customers will want to buy. And market expectations are moving fast.

THE PRESSURE IS ON

Multiple studies have found that customers are increasingly seeking solutions aligned with ESG issues. Investors are now placing added importance on these factors too.

For example, companies with practices that produce high levels of carbon emissions are becoming less and less acceptable to all aspects of society. No matter the business segment, if a competitor is able to provide pertinent, low-carbon, affordable solutions, then why should clients opt for solutions with a larger carbon footprint? From a broader sustainability perspective, the same rationale can be easily applied to biodiversity depletion or water.

We can expand the same rationale to social and economic issues. We can explore, for instance, how topics like fair wages, career training and quality overall employment are genuine business issues. In a world witnessing deep digital transformations that are diluting relationships between employees and companies, and where quality and knowledge management are driving customer satisfaction, margins and innovation depend on people. Business competitiveness will not only depend on its capacity to make the most of the digital revolution underway, but also on its capacity to invest in and retain people.

Business really has no other choice than embracing a new vision: a vision of business as a force for positive change; a force that can preserve and restore natural resources, ensure human dignity and fairness, and operate transparently.

Many factors drive business resilience, and sustainability will no doubt play a growing role for competitiveness in the decade to come. As such, it is necessary for businesses to be able to respond quickly to disruptions and radical changes that affect environmental and social issues.

UNDERSTANDING THE BIGGER PICTURE

Business agility will hinge on successful digital transformation. Digitalization offers a huge opportunity for a much greater level of data, which can be used to explore broad sustainability performance. Examples include the nexus between climate and water, connecting the dots between local infrastructure and child labor, or analyzing social audits to better predict risks. Without a doubt, digitalization will help systematize data collection and sustainability performance monitoring at a large scale.

However, placing too much emphasis on data alone will generate its own risks, as the same sustainability performance across different contexts may not lead to the same business decisions. Water is an illustrative example: good water practices in countries like Mali or Mexico certainly are much more important overall than in places like Canada or Sweden, where water scarcity is less of a material issue. Sustainability, therefore, remains a fundamentally qualitative approach, requiring real-world expertise to confirm what data may have to say.

ALIGNING FOR SUCCESS

 
All in all, to become the leaders in sustainability that humanity needs for them to be, businesses must be aligned on a wide range of factors: the thoughtful use of digital tools and data; products and services that generate genuine sustainable services; consistent innovation to develop practices that go beyond minimum-level certifications; using a sustainability lens when selecting business partners; and keeping environmental and social priorities in mind when lobbying government for policy changes.

This may all seem burdensome, but it is necessary to deliver on a more pressing challenge: building a sustainable future for generations to come. Only companies able to adapt and build their own resilience will likely survive and thrive.

PROFILE

BSR (Business for Social Responsibility) is a global nonprofit organization that works with its network of more than 250 member companies and other partners to build a just and sustainable world. From its offices in Asia, Europe and North America, BSR develops sustainable business strategies and solutions through consulting, research and cross-sector collaboration.

With 20 years of experience in the sustainable business field, BSR Managing Director Farid Baddache leads BSR’s consulting services and engagement with companies across industries, including direct experience with more than 100 projects. As part of BSR’s global management team, he also helps to oversee membership strategy and operations. Prior to joining BSR, he was a CSR strategy and management consultant and project manager in the technology, manufacturing and extractives industries. He also has authored several books, one of which won a business book award in 2006. He holds two MBAs, including one in Clean Technology, plus a doctoral degree in Organizational Sociology.

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