Sharing Sustainability Innovation

We are at a point when the global issues are widely known and accepted. Although spreading awareness will continue to play an important role, we now really need to move towards implementing the solutions. This is of course relevant for both politicians, companies and individuals.

This means that there is a strong need to translate the issues to tangible trends that will affect companies, so that they can start to work on the strategies and plans for change, supported by real business cases.

Now, this translation of global issues to trends to business impact is not the easiest thing to do, since it requires a lot of data and many assumptions. Let me give some examples of the complexities:

Oilprice

The oil price is likely to climb to higher levels as soon as the economy picks up again. The International Energy Agency projects that the price will be 200 USD per barrel 2030. But probably the volatility of the price will continue to be high, and of course the uncertainties in the price is very high. On top, governments are likely to impose more price incentives to drive away from fossil fuels, through e g taxes. Also, the carbon pricing mechanisms will impact the price which means that the price impact on transportation etc will be high, but quite difficult to calculate as a trend.

Migration

Climate change is likely to cause large migration streams from areas that are more exposed to the changes. A Country like Bangladesh is likely to be severly impacted by floods and higher sea water levels. Sub-saharan countries are expected to be exposed to famine due to droughts and increased desertification. Political stability will also be impacted by the changes. So, what does this mean to the markets? Of course, streams of migrants can have an impact on the customer base and the talent base in your markets. It will also put pressure on priorities from politicians that will both create opportunities and challenges for local business. If your business has operations in counties that are highly exposed, the impact on your company will be more significant.

Legislation and reporting

What gets measured gets done. As goverments push harder for sustainability, companies will have to live up to requirements through transparent reporting of the environmental and social footprints. Reporting frameworks and standards like GRI will be increasingly important. Since you will inherit some of your footprint from your suppliers, the best offer you can give to your customers is a product or service with zero footprint. Legislation in different forms is likely to regulate all major areas relevant to sustainability, such as energy efficiency, energy production, water usage, ecosystems impact. The impact will be very different in different industries and again, it will also open up opprtunities for companies that are proactive in analyzing the trends and acting fast. Recently we saw the Chinese government close 200 pulp mills that were not meeting the environmental regulations. This is an example of a huge opportunity for technology providers and investors that have the environmental solutions available.

Consumer Pressure

We can see that the consumers are very rapidly changing their consumption patterns as a consequence of the sustainability issues. “Green brands” are doing well. For christmas this year, one of the trends is to buy vintage, recycled gifts rather than new ones. Another is to give away an “experience” rather than more stuff. The consumption of cod has dropped dramatically as many consider it unethical to eat a fish that is threatened by extinction in the North Sea and the Baltic Sea. Consumers are increasingly aware and the pressure from consumers will increase but shift from area to area. How does this impact your business?

These were just a couple of example areas in order to describe the complexity involved in determining business impact from sustainability issues and trends. Clearly, it is a challenge for any company to translate these changes into a plan for change in the organisation supported by credible business cases.  But still it has to be done and we can see a lot of early movers already being rewarded.

Roll up your sleeves and get started. There is always someone else ready to take your market if you are slow in responding to change.

Globe Forum is looking for really successful examples of translating holistic understanding of sustainability trends into business practice.  If you have something to share, please contact me!