More businesses want to put something back, but let's not forget that they operate in a wider system, says the Deputy Chief Executive of Forum for the Future.
There is a new sustainability pioneer on the block: those businesses with an ambition to be net positive. These businesses are absolutely critical for a sustainable future, as their ambition is not just to be a little less harmful – not even to get to ‘zero harm’ – but to put something back.
Putting something back, when it comes to natural capital in particular, has never been more important. The bad news is that the stocks (which include renewable and non-renewable resources, and sinks – such as rainforests, which absorb, neutralise or recycle waste) are perilously low. You’ve all heard the saying that, ‘If nature was a bank, it would have been bailed out ages ago’. Just cutting carbon emissions, reducing waste – even going to zero – won’t rebuild the value of natural capital. We need to reverse the damage that’s been done. This means enhancing biodiversity, re-establishing eco-systems, and switching the supply of commodities to allow the non-renewable resources not to disappear completely.
Social capital also needs some urgent attention. As social inequalities rise, as the chronic disease burden in society balloons, the groupings in society that allow it to function effectively are put under ever-increasing strain.
And we all know that, right now, the stock of financial capital in developed nations is, well, not high (triple-dip recession anyone?). Rebuilding the value of natural and social capital will help address this, too.
So, a big hurrah for the net positives! But let’s not forget that they operate in a wider system, one in which there are significant barriers to becoming a truly sustainable business. Investors aren’t exactly falling over themselves to ask probing questions about a company’s sustainability endeavours, which means capital markets have yet to figure out how to reward the sustainability pioneers. And wider civil society isn’t yet demanding sustainable products and services, which is a brake on product and service innovation. Not to mention the global policy framework, where a depressing picture of incoherence and perverse incentives is emerging.
These barriers mean any business with net positive ambitions needs to understand its role in the wider system, and work to create the conditions in which it will be successful. And this is where system innovation comes in: when a set of actions shift a city, sector or an economy onto a more sustainable path.
To achieve this, the net positives will need to be very deliberate about the change interventions they make. Ultimately, they will need to embrace a new model of collaboration: one with greater co-operation within sectors before competition becomes the norm, and one where partnership characterises interactions along value chains. This, in turn, will mean a shift in mindset, from tactical to strategic, and from short to long term. And business very much not as usual.
Sally Uren is Deputy Chief Executive at Forum for the Future. @sallyuren
Watch Forum’s animation about system innovation:
Photo: Nick Woodford