Future historians will have plenty to debate on the state of sustainable business in the 2010s. Was it the decade when the business community finally woke up to address the world’s pressing environmental, social and governance (ESG) challenges or when the last great opportunities for action were squandered?
Although 2019 was only the second-hottest year, the 2010s turned out to be the warmest decade on record. Extreme weather events over the past decade forced more than 20 million people a year to leave their homes, estimates Oxfam. You can add to the list of climate-related human impacts: mounting mass extinctions; growing global inequality; and the appalling impact of environmental problems on public health.
And if the disappointing COP25 is any indication, sustainability professionals will have their work cut out for them in the 2020s. If the 2010s were the “ESG awakening,” then the 2020s will need to be the “ESG actioning” in order to avoid a frightful future “ESG reckoning.”
To reflect on the past year and anticipate all that might come in 2020, we at thinkPARALLAX connected with several corporate sustainability leaders across industries, including food, technology and fashion.
The theme (or is that meme?) of 2019
It turns out that summing up 2019 with a single theme isn’t so easy: corporate sustainability leaders have mixed opinions.
“In 2019, the theme is sadly ‘not enough,'” said Jessica Appelgren, vice president of communication at Impossible Foods. “We are in an unprecedented moment of environmental and human crisis where marginal energy savings or incremental shifts in business are just not enough.”
Although the past year saw youth taking to the streets in protest, led by breakout climate activists such as Sweden’s Greta Thunberg, many companies continued down a “business as usual” trajectory in terms of ESG strategy, Appelgren added.
Others are cautiously optimistic in their reflection. Janiece Evans-Page, vice president of global philanthropy and sustainability at Fossil Group, characterized 2019 with a single word: Awakening.
“There have been countless actions and announcements in recent years regarding CSR and corporate sustainability, yet 2019 was seemingly a year of unprecedented recognition that ESG is a priority for CEOs, boards and shareholders,” she said.
“The theme of 2019 is more brands taking a stand,” said Ali O’Shaughnessy, corporate social responsibility marketing manager at Driscoll’s. “They’re moving toward greater transparency on their business operations and are highly engaged on consumer and policy topics that impact the world.”
Take, for example, the Business Roundtable’s August announcement that it would redefine the purpose of a corporation to promote an economy that serves customers, employees, suppliers, communities and shareholders. Although this declaration stirred up some debate around intent and authenticity, the fact that a group of nearly 200 CEOs representing the largest U.S. companies recognize the need to redefine the mission of corporations suggests something has changed.
This year, investors continued their onward push for companies to demonstrate a commitment to ESG. “2019 has been an important year for the recognition of corporate responsibility as an essential value-creating business element by key stakeholders,” said Angela Baker, head of corporate responsibility at Qualcomm. This holds especially true as the investor community’s focus on how companies manage and report non-financial aspects — primarily ESG — has seen exponential growth this year.
Excitements for the year to come
Moving into 2020, corporate sustainability leaders are dealing with some heavy topics, yet many remain excited about what’s possible.
When asked what excites him most about 2020 in terms of corporate sustainability, Andrew Savage, vice president of sustainability at Lime, said: “The circular economy. From advancing the shared economy like transportation to breaking away from the traditional linear take-make-waste model, I think we’ll see a further embracing of circularity in the corporate world. It’s a model which at its basic core is simply good business, and at its best is a path toward a more sustainable world.”
Evans-Page concurred: “Circular economy and opportunities to create inclusive business models — especially in the fashion industry.”
“There’s been mounting concern over single-use plastic and how the management of plastic has impacted our environment,” O’Shaughnessy noted. “I’m excited that consumers are driving change and are pushing for accountability from the companies in this area.”
With all of 2019’s talk about disrupting the food industry, there’s also a lot to be excited about when it comes to sustainable food systems in 2020. “I’m excited about this incredible excitement around sustainable food and sustainable protein,” said Udi Lazimy, senior sustainability and sourcing manager at JUST.
And there’s optimism that there could be a shift toward collaboration in addressing the climate crisis in 2020. “I’m excited about the sense of cooperation I see building across sectors to fight our climate crisis,” Appelgren said. “In the food space, companies like Google are stepping up to convene thinkers from across the industry, often competitors or representatives from organizations with diverse points of view, to work on the big issues involved in transforming the food system.”
Savage shared this sense of urgency for action on climate. “The undeniable truth is that we simply aren’t making progress fast enough in addressing the climate crisis,” he said. “The business community has a central role to play in that. It’s imperative to make the changes and investments required for a more sustainable future, and our opportunity is now.”
What scares sustainability teams
With such high stakes, there’s also plenty keeping corporate sustainability leaders up at night. There are fears that a looming economic downturn or political fortunes in the United States will stymie corporate sustainability progress.
Savage said he is worried that an economic downturn could cause corporations “to take their eye off the ball on making substantive progress on the vexing issues of our time including climate, plastic waste, inequity, among other key social impact challenges.”
“We can’t have another year of ‘not enough,’” Lazimy said.
Evans-Page agreed that the impetus is for action in 2020. “Authenticity and transparency — how do we ensure that there’s more action and not just talk?” she said.
And then there’s the fear of fear itself. “I’ve been doing more thinking lately about the onslaught of eco-anxiety, and corporations are not immune from this phenomenon,” Appelgren said. “As corporate sustainability actors, I think our job will be to find empowering ways to engage our constituencies with science-based programming and with cautious hope.”
Imagining the perfect world in December 2020
Nobody needs a clairvoyant to tell them that the world could look very different a year from now depending on the outcome of the U.S. presidential election, a potential recession and other macro forces. But when it comes to corporate sustainability, what would it look like in the perfect world?
A common aspiration is integration — that companies will embrace ESG as the main event rather than a sideshow. “In a perfect world, at the end of 2020, corporate sustainability would be fully integrated into every company’s operations and strategic decision-making,” Baker said. “Corporate sustainability would be so tied into the way companies do business that it would be impossible and undesirable to separate one from the other.”
Evans-Page concurred: “That corporate responsibility would be integrated into every company’s purpose and mission — thus ensuring that it’s a top priority.”
Those focusing on the built environment also believe 2020 should be marked by a shift toward a more comprehensive approach to ESG.
“In a perfect world, companies would be reporting and offsetting their entire carbon footprint and have aggressive reduction targets for each one of their sustainability impact categories,” said Jacob Arlein, principal at stok. He said many companies have increasingly been embracing “embodied carbon,” focusing on reducing operational carbon emissions associated with the production, transportation and installation of building materials, as well as building disposal.
In the ideal end of 2020, we’d see a lot more corporate action and collaboration on ESG issues. “I think the biggest companies in the world will be implementing solutions, rather than just reporting on the things they have done,” Lazimy said.
“Imagine if the companies contributing most to climate change decided to course-correct voluntarily — not before it was mandated by global climate policy but because they saw the opportunity that exists in engaging Gen Z and millennials who are rapidly becoming parents to the fiercest and most demanding-of-change generation yet,” Appelgren said. “In this perfect world, the corporate sustainability teams become leaders of business strategy and climate progress becomes corporate currency.”
“I am most excited when the corporate world can solve big, substantive challenges faced by the public sector,” Savage said. “Cities and nations around the globe have appropriately set ambitious climate targets. And yet they don’t have the capacity, capital, technology or ability to deploy solutions to meet the challenge themselves, but in close partnership with business we can get there together. To that end, I hope we’ll see more public-private partnerships that take bold action on climate change.”
Make no mistake — 2020 will be a pivotal year for corporate sustainability. What happens then and over the next 10 years may well determine our collective fates for the next 100 years.