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Megatrend 6: Expectations on businesses to act sustainably

Insight

In March 2018, a 15 year-old Greta Thunberg sat outside the Swedish parliament, alone, striking from school to raise awareness for climate change. In just 18 months, Greta became the symbol of action against environmental damage, a movement which ultimately galvanised 6 million people to march in the name of the planet.

Greta Thunberg is Time’s Person of the Year (2019), a Nobel Peace Prize nominee, and has been described by the likes of Leonardo DiCaprio as a “leader of our time”. The teenager has taken the world by storm. Perhaps unbeknown to many of the children marching the streets in her name, Greta is far from the first to advocate for climate action: the first traces of climate activism date back to 1970. Her rapid rise to global fame therefore begs the question: why are people suddenly so interested in climate change?

The rise of sustainability

The answer is simple: accountability. Technology provides increasing amounts of data about the impacts of our consumption, facts which are easily divulged on social media platforms worldwide. The impact is a new age of liability, where many feel they can’t so much as get their morning coffee without thinking about the environmental impact of the styrofoam cup it comes in.

When the inaugural Earth Day was hosted in 1970, people knew that something needed to be done to better our carbon footprint. However, unarmed with statistics or facts, they failed to galvanise the masses in the way Greta Thunberg has so deftly done: her youth and unassuming ways mean she makes people stop and listen to what scientists have been saying for years. 

Sustainability isn’t just an intriguing conversation topic or an Instagram hashtag for new generations: it dictates how they utilise their purchasing power and the career choices they make. A report into workplace priorities shows that millennials and Gen Z employees rank sustainability as a top priority when evaluating job offers, and 87% of millennials would be more loyal to a company that helps them contribute to social and environmental issues.

This means that businesses must break the perpetual cycle of short-termism and start looking ahead, fast. By 2050, millennials will represent 75% of the workforce. Acting sustainably is no longer an added bonus to a job description, but a key determining factor for applicants, as well as for consumers: 66% of global respondents, from a survey of 30,000 online consumers, said they are willing to pay more for sustainable goods. Ignoring this fact will cost businesses employees, productivity, and ultimately their ability to survive.

What does sustainability actually mean?

Sustainability is often confused with environmentalism. Sustainability means that no resources – environmental, financial or human – should be unduly depleted or wastefully managed. Environmentalism is one of the three pillars of sustainability, encompassing concern and action regarding the health of the planet.

For a business, acting sustainably requires a dual approach. The first part of this is more closely linked to environmentalism, as it focuses on avoiding the waste of resources or excessive pollution. There are daily acts of sustainability that businesses can do to improve this aspect, varying from using recycled pens in the office to choosing to have a video-conference to cut down on emissions from travel. These environmentally friendly attitudes will be more successful if they are embedded into the values of the organisation, and an integral part of the workplace for all employees.

The second approach to sustainability for business is about considering the wider societal and environmental impacts of key business decisions. Today, successful businesses take a honeybee approach. This means acting in the best interests of all stakeholders, not just investors.

Businesses which fail to adapt, sticking with the traditional locust approach (short-term profit at any cost), will find the market increasingly inhospitable as the environmental and ethical concerns of consumers continue to grow.

What does this mean for business?

For businesses, there are several benefits to putting sustainability at the heart of their approach. Firstly, making decisions with the future of society as a stakeholder requires anticipation of the potential changes in that landscape, and makes businesses more adaptable to those shifts. Secondly, adopting a sustainable stance for businesses has become an imperative attracting and retaining talent. With younger generations putting sustainability at the top of their priority list, businesses must follow suit to survive.

Our research suggests that over a third of C-suite leaders make business plans two years or less in advance, and 50% almost always fear taking a long-term legacy view of their organisation. Taking a legacy view means considering all stakeholders when making business decisions, from CEO to society. This approach goes against the capitalist paradigm, but over the next few years it will become increasingly mainstream.

There are 3 things a business leader can do to adopt a legacy view successfully:

  1. Have conviction. Leaders must be confident in themselves of the long-game, of what the company needs to stay relevant.
  2. Establish tactics. Leaders need to be able to show progress and gain stakeholder buy-in that this long-game plan will both work and pay off.
  3. Be courageous. Courageous leaders will speak out, take action and persevere to achieve lasting, transformational impact.

Questions for business leaders to think about:

  • What does your business do to move toward sustainability?
  • What environmental action is being taken within your workplace?
  • Do you enable your leaders to have a long-term legacy perspective in their work?
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