Business leaders are shifting their priorities, embracing the idea of the “double bottom line”, supplanting shareholder primacy with stakeholder primacy, and committing – at least notionally – to environmental sustainability.
That’s good news, said Caroline Anstey, Senior Advisor to Sustainable Markets at the World Economic Forum. But not all of this environmental commitment is genuine. “A lot of companies are still thinking about corporate social responsibility. They’re not running it through the business and through the strategy. They’re not really putting it into their plans and my worry is that without any durable metrics, consumers and investors and others really don’t know who is sustainable and who’s doing greenwashing. My worry is that over time there will be a big scandal over this and people will become disillusioned.”
In a panel session on transforming markets, Anstey called for product labelling to give consumers a clear sense of a product’s environmental impact. “Consumers control about 60% of global GDP. They make choices every day, using their pocketbooks, their wallets,” she said. “If there’s proper labelling and disclosure – the same as food labelling, but for product production, supply chains – consumers can make that choice. But it’s very important that consumers don’t have to pay more for doing the right thing.”
Governments have a critical role to play in ensuring that green choices aren’t more expensive choices. “We have to change our system of taxation and subsidies and incentives to align with a sustainable future,” Anstey said.
The grim realities of climate change and the urgency of the situation were driven home by Allen Chastenet, Prime Minister of the Caribbean island nation of Saint Lucia. “We’re facing two things:” said Chastenet, “extinction and the environment. Unfortunately, the extinction part comes first,” he said, noting that 2018’s Hurricane Maria – the second of two hurricanes to hit the island in a month – did damage equivalent to 200% of the island nation’s GDP. Of those who survived the disaster, he said, it was self-employed farmers who tended to remain, while “teachers, doctors, nurses leave and never come back.”
“The final nail in the coffin for us is that we become now uninsurable,” he added.
Melati Wijsen, who with her sister launched a successful initiative called Bye Bye Plastic Bags six years ago, at age 12, to ban plastic bags on her native island of Bali in Indonesia, made an impassioned case during the panel for including and taking seriously the views of youth in all conversations about sustainability.
“Involve the young people. Take our ideas, as crazy as they might be. We have something to offer. We’re smart, we’re passionate and we’re motivated, and we’re ready to be part of these opening markets,” she said. “We not only expect to be heard, but we expect to be part of the decisions that are being made today.”
Feike Sijbesma, Chief Executive Officer of the Dutch company Royal DSM, echoed Anstey’s dismissal of corporate social responsibility. “CSR is out,” he said. “You do this in the mainstream of your business,” noting that this is what distinguishes a genuine commitment to sustainability from mere “greenwashing”.
Anstey noted that the classical economic theory and its assumption that people will act only in their own self-interest has fallen away as behavioural economists present data to the contrary. “They will act in the interest of their community – even if it’s not in their own self-interest,” she said.
Scepticism over motivations dies hard, however. A Twitter poll put out on Monday from the World Economic Forum asking whether respondents believed business leaders when they say they want to be more sustainable found that 55% of respondents said no, with only 23% answering in the affirmative and 22% saying they weren’t sure.
“This is a devastating score,” Sijbesma said. Noting that people working for social good are now termed “social entrepreneurs”, he added: “I think all entrepreneurs, all business leaders, should be social entrepreneurs. You should go to jail if you are not a social entrepreneur.”
In a video message delivered at the end of the panel, His Royal Highness Prince Charles announced the creation of the Sustainable Markets Council in partnership with the World Economic Forum. The council will explore creative solutions, model sustainable leadership and champion sustainable markets at a global scale.