If there is one single theme for management, business and investing for the rest of this decade, 2020 to 2030, it will be Sustainability. We are at a watershed moment in human history. A turning point. From trends we will examine, we can see this movement clearly. We can see a nexus where risk and opportunity meet. A nexus for the integration of something much more powerful than anything we have conceived or done in the past.
Sustainability may even define the rest of the 21st Century. If we make key decisions soon. If we do, Sustainability will mark the movement away from the Industrial Age of the 20th Century. It will transform the primitive ways of thinking and processes of the past. Digital and internet technologies were merely the first step. They were the enablers for the emerging Sustainable Economy.
This movement becomes clear if we study key global trends. When we do, we can see a convergence of tectonic plates-
- Climate Action. Climate Change is an existential threat and an existential opportunity. Scientists say critical changes need to occur in this decade: 2020- 2030, if we are to keep global warming under 2.0 Celsius degrees.
- Environmental Tipping Points. There are many environmental points occurring right now. These include: the over-use of landfills, polluted water ways, toxic air and soils. Most importantly, plastic pollution, particularly nano-plastics are creeping into many food chains, including our own.
- Globalisation. Markets, trade, finance, supply chains, communications and the like are now globalised. Business and investing decisions now must consider global issues. For instance, climate change, and as we are now discovering, pandemics.
- Networks. The internet and digital communications provide us with global, accessible and powerful networks. These can be transformative tools for innovation areas, such as Greentech. For example, through the use of cheap 3D printing, products can be made nearly anywhere in the world. Another example is the use of local renewable energy networks linked together to produce cheaper, cleaner and more reliable power.
- Greentech. We are seeing the emergence of Greentech- innovative, scalable businesses solving environmental problems and, at the same time, being more profitable, and adding higher value.
- ESG. In the finance sector, particularly investing or funds management, Environmental Social Governance (ESG) is now moving to centre stage in both risk management and opportunity finding. If ESG is linked to investing, and all business need capital, then all businesses must now consider Sustainability.
- Purpose. The Millennials, in particular, are fusing purpose and meaning with work and enterprise. They are demanding more form companies as consumers, employees, entrepreneurs and investors. Purpose and Sustainability are a perfect marriage. It will be the Millennials who will drive both demand and supply in the key upcoming decades.
- Agility. A rising concept in business circles is the idea of the Agile Business. Such businesses put purpose and the customer first- not profits. Profits follow service, not the other way around. Agile businesses align, what I call the 4Ps: Purpose- Planet, People, Profit. They are nimble, globalised, often high tech, scalable and dynamic. Like nature, they are highly adaptable to fast changes. This is quite unlike the large corporate structures or management bureaucracies of the 20th
- Circular Economy. Economists, business and other thinkers are now loudly advocating a new economic and resulting business model that is similar to systems we see in nature. The Circular or Sustainable Economy is quickly gaining acceptance in universities, think tanks, and in the business and investing communities. The Sustainable Economy is a way to eliminate waste, minimise costs, improve revenues and margins, but most importantly, move to a new way of thinking and doing that can thrive in the short and long term.
- SGDs of the UN. The Sustainable Development Goals (SDGs) of the United Nations give us 17 goals, and the beginnings of a strategic framework to take transformative action. They are due in 2030, which coincides with the climate science.
- Stakeholder Philosophy. Shareholder Philosophy dominated the business and legal theory of much of the 20th Century in most Western economies. Purpose and profit were seen as opposites. Already there is solid empirical evidence in the business and finance literature proving this to be untrue. A Stakeholder Philosophy is not only more profitable, it creates more value to the corporation, our society and our environment. Stakeholder Philosophy fits the global world, Agility and Sustainability like a glove.
- Inequality to Inclusion. A ‘market failure’ of Shareholder Philosophy has been inequality, especially financial inequality. This is at odds with economic and other clear empirical evidence which prove we need a strong consumer base for economies to thrive. Sustainability is inherently inclusive through the 4Ps, and has the potential of creating a more inclusive global community.
- From Products to Licence Models. Sustainable businesses are slowly moving away from product models to licensing or leasing models. Uber is an early example and ushered in the Sharing Economy. Interface Inc., a global manufacturer of commercial flooring, including carpet tiles, is another pioneer. Through the visionary leadership of Ray Anderson, instead of selling carpet tiles, they lease them. At the end of the lease term, they recycle the tiles, thereby minimising or eliminating waste. This means petroleum-based tiles do not end up in landfill. Importantly, it means the manufacturer is harnessing innovation to make better, cleaner, more sustainable products that last. Interface Inc., through such thinking and processes are closing the loop, and moving us quickly towards the Sustainable Economy.
This list of thirteen trends is not exhaustive. Together they are powerful. They provide the beginnings of a set of First Principles for business managers, entrepreneurs and investors.
It is worth noting, Jeremy Rifkin has also done some excellent work in this area. I can highly recommend his book, The Third Industrial Revolution (see References below). He too is a visionary and a pragmatist. He too sees our current time as a watershed to a new, better economy, society and world.
These tectonic plates cannot be ignored. They are moving. Converging quickly. The internet and digital technologies have been foundational steps. There is both risk and opportunity. Where risk and opportunity intersect will be the nexus for transformation. A nexus for, not only environmental and social solutions, but a new, higher form of value creation. It is my vision, my belief: one day all business will be done in this way.
“Our task must be to free ourselves by widening our circle of compassion to embrace all living creatures and the whole of nature and its beauty.”- Albert Einstein.
By Lee Spano, Creatness International www.creatness.com
Denning, S 2018, The Age of Agile, Harpercollins Focus, Nashville, United States.
Hawken, P 2013, The Ecology of Commerce, HarperCollins Publishers Inc., United States.
Rifkin, J 2013, The Third Industrial Revolution, Griffin Charles & Co Ltd, Great Britain.
© Lee Spano / Creatness International. All rights reserved.
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