Sustainability and the environment should underpin forward thinking business strategies, says Nick Dormon
The past year has really brought the need for climate action to light. Wildfires devastated California and Australia, floods ravished South Asia, and a momentary fall in carbon emissions due to the pandemic gave us a brief glimpse into a more eco-friendly future.
Yet despite the awareness for urgent change, people still feel powerless individually to do anything about it. While it’s true that governments and corporations have the power to take action on climate change, mobilising the masses is where true transformative action derives. In an increasingly divisive world, we need strong and effective leadership to rally people together. If everyone works as one, amazing things can be achieved.
Take the collective response to the pandemic as a case in point. The struggle has been unprecedented, but never before have we seen such fast, community-based action under the influence of powerful leadership. In many countries, such as New Zealand, leaders faced with phenomenally challenging circumstances have shown immense skill at encouraging collective action. And the vast majority have complied with the rules and advice.
In others, where governments have failed to act quickly or effectively enough, the medical and scientific communities have stepped in as unlikely leaders, acting with both innovation and heroism. On a global scale, the collective effort to stop the pandemic has shown how the world’s nations really can come together under a common cause.
The need for collaborative leadership
To tackle the climate crisis, we need collaborative leadership and a cohesive plan. The human cost of coronavirus has been unimaginable, but it has also provoked a much-needed reassessment of our lives on this planet. This, along with a new US President rejoining the Paris agreement, gives us both a reset button and a powerful message from the world’s most powerful nation about the importance of tackling a global disaster that has long pre-existed the coronavirus: climate change.
It isn’t easy. Where totalitarian states such as China can pledge to be carbon neutral by 2060, democratic systems rely on consensus and collaboration that can be hampered by comparatively short-term leadership tenures. In the past, climate change was too low down on the list of electable or achievable tasks for Western leaders to really bother with during their terms in office. However, pressures are now mounting from multiple directions to take real and immediate action, and leaders are expected to make change a reality in the coming years.
Shrouded in scientific jargon, the climate crisis often appeals to the left (technical) side of our brain, which can become confusing and ultimately isolating. Polar bears have become the poster child of climate change campaigns; their frozen worlds melting under climbing temperatures. Yet the concept of increased CO2 in the atmosphere has always been such an abstractly communicated concept that only but a relative few took notice until a more tangible picture of its impact was portrayed.
Today, with extreme and volatile weather events culminating in floods, hurricanes, bushfires and snow storms, humans are being affected in real terms: threatening safety, economics, social structure and health. The over-saturation of social media has played an essential part in transforming the formerly abstract concept of climate change into an immediate and dangerous reality. Horrifying images of the Golden Gate Bridge encircled in wildfires, or that burnt koala bear, did more to bring the crisis to people’s attention than the tireless efforts of many environmental campaigns.
These crises are manifesting themselves in the many causal forces that will rapidly shape the way we do business in the future. With the proper leadership in place, this can only accelerate.
‘Green’ shares
Investors, for example, are increasingly moving towards ‘green’ shares. More climate awareness and shifts in consumer behaviour married with advancements in technology that lower the cost of green technologies are making green stocks increasingly attractive. In fact, according to a 2020 survey, 74% of global investors now plan to put their money towards more socially and environmentally conscious causes.
Any CEO concerned with their legacy would be wise to realise that sustainability creates business value in multiple ways. Though there can be tensions between acting responsibly and short-term profits, the long-term benefits of sustainability are unquestionable in the more climate-conscious future. The CEOs who will be remembered in this future will be the ones that took an empathetic and considered leadership approach in the early days, not the CEOs who intervened reactively at the eleventh hour.
Environmental credentials are also a divisive factor in attracting new talent. How many people would announce loudly at a dinner party that they work for a fracking company? In fact, 62% of millennials would prioritise purposeful work over a high salary. This is likely to be even higher for Gen-Z who are entering the workforce during a pandemic; a time where inequalities are even more pronounced but where empathy is (arguably) on the rise. Today’s graduates see environmental responsibility as essential, not optional, in the workplace. Business leaders must attune to this shift if they’re to attract the brightest young minds.
This is equally true for brand loyalty. Consumers have reached a tipping point where sustainability is a deciding factor at point of purchase. Take the fashion industry: back in November, consumers expressed outrage at Pretty Little Thing’s Black Friday sale, in which clothes were sold for as little as 8p – hardly a promising sign of ethical and sustainable production. For today’s empathetic consumers, cheap clothes are not seen as a bargain, but a sign of exploitation and violation.
Ugg, by contrast, won consumers over with the creation of Uggpush, its signature Uggpure wool combined with a percentage of recycled materials. Realising that sustainability sells, the global powerhouse developed their trademark material with the climate crisis in mind, engaging more consumers in the process. As Gen Z and eventually Generation Alpha obtain greater purchasing power, only brands that show true climate leadership will be able to attract the emerging cohort of conscious consumers.
Holding brands to account
The digital-first nature of today’s world has played a vital role in holding brands to account for and encouraging sustainable developments. The supply chain is no longer invisible and reporters are always on the lookout for the bad guy to expose. In the past, only major disasters such as the Exxon Valdez or Deepwater Horizon oil spills made the news. Today, thanks to social media, journalists are able to expose a multitude of more covert environmental indiscretions to a much broader audience. Boohoo, for example, were outed last October for not paying their workers minimum wage; a story communicated across the world thanks to Instagram and Twitter. As a result, shares in the company almost halved overnight.
Ethical transparency is clearly a determining factor in a brand’s success, not just from a consumer perspective but also for investors. No one wants to be associated with a brand that exploits human rights or natural resources. In fact, if the supply chain is sustainable and ethical, it can actually become an asset to the business. Unilever is paving the way. By refusing to do business with any firm that does not pay a living wage to its workers, the global conglomerate is sending a loud and clear message of the value of ultimate transparency. Other companies would be wise to follow suit.
Forward-thinking business strategies clearly depend on putting sustainability and ethical concerns front and centre. No longer a performative, tick box action, climate responsibility is now a valuable asset for business growth and lasting success. As the coronavirus continues to expose global inequalities and brands are judged on their transparency, leaders who showcase a genuine and empathetic consideration for the world at large will be the ones who build enduring and impactful companies.
Nick Dormon is founding partner and strategy director at brand design and innovation agency Echo.
