A surge of advocacy, financial innovation and government initiatives aimed at meaningful social change has started in the new decade. An increasing number of CEOs, policymakers and consumers are aware of the acceleration of major social and environmental problems, particularly climate change, beyond the limits of our current system.
Companies realize, under pressure to transform, that embracing structural change and disruption to solve the world's urgent problems would create tremendous opportunities for innovation, investment, greater relevance and market share.
The Davos Manifesto of the World Economic Forum, published to coincide with the 50th anniversary of the annual meeting of the organization-currently in full swing in the Swiss Alpine resort-is a "collection of ethical standards to direct businesses in the age of the Fourth Industrial Revolution."
Responsible leaders drive action for Sustainable Development Goals
We have ten years to meet the 2030 targets set by the Sustainable Development Goals (SDGs) of the United Nations. Now we know that the way we live today is unsustainable, so we have to ask ourselves, 'What did we do once we know it? Business has a crucial role to play in protecting our environment, otherwise our short-term business efforts will become increasingly insignificant. Leadership allows executives to see the broader picture and behave professionally while working day-to-day. IG&H Strategic consultancy, for instance, has established a sustainability strategy with the aim of being CO2 neutral. In addition to investing in solar panels and electric cars, a small forest in Portugal is also being planted and a biophilic office is being built. How do you behave to combine people's needs, the planet's interests and profitable business?
From sustainability strategy to sustainable transformation
To counter the implications of global megatrends, incorporating sustainability into corporate strategy is becoming important. Although some are motivated by an increasingly conscious customer base that is more in touch with the effect on people and the world of the goods and services they purchase, others are guided by the position their business has on society as a whole.
For instance, with exclusive access to 70 per cent of the world 's phosphate reserves, Morocco's OCP Group has a unique opportunity to ensure global food security. From a phosphate rock exporter to a farmer-centric fertilizer solutions provider, OCP has grown. It works closely with farmers, while retaining its global scope, to unlock Africa 's agricultural yield potential, a continent that could solve the food challenges of the world. To mitigate the harm that fertilizer overuse has caused in other parts of the world, OCP develops personalized fertilizers to provide soil-specific nutrients.
Sustainable finance goes mainstream
Stakeholders around the world are seeking a change from short-term, siloed, extractive conduct to long-term, inclusive and sustainable capitalism on capital markets. Investors are going beyond the simple model of risk return to question how capital can be used as a lever for change. Investment decisions that incorporate environmental, social or governance (ESG) criteria are becoming increasingly common and are expected to ramp up significantly over the next decade: forecasts suggest a market of EUR 1 trillion where ESG will be based on one in every three equity funds.
Meanwhile, to sustain the financial sector, the calculation and aggregation of non-financial data is developing as a cottage industry. Investors will reveal the purposefulness of their investments, from sustainable portfolio development to specialist stock exchanges and green bond markets.
China steps up to green the global economy
Without the support of China, neither the EU nor the US would have much clout or bargaining strength to really press for big initiatives. Consider, for example, the aspirations of the Chinese leadership to deal with the Amazon emergency in Brazil, or the fact that China is the second largest donor to the United Nations.
China is also the main benefactor of the United Nations Environment Programme (UNEP) and the guiding force behind the collaboration of the International Green Growth Alliance between the Belt and Road Initiative and UNEP. This will be a year of Chinese climate diplomacy. If other large countries are able to negotiate with China, on Chinese terms or otherwise, the main issue will be.
The next generation will influence family enterprises to embrace social impact
The bulk of all companies worldwide are family businesses, leading to two-thirds of global GDP and job growth. Therefore, they play a major role in solving some of the most important issues in the world. Although corporate social responsibility and philanthropy are obviously very necessary, the transformation of business models into real effect and purpose is the most efficient strategy. Family businesses are in a unique position to master this transition because of the direct control of founders.
The next generation of owners and leaders is one powerful driving force within family businesses. At a comparatively young age, they transition into important leadership and governance positions, enabling them to reach through the entire enterprise for creativity and change. It would be an extremely successful way of tackling the most pressing global issues to enable this young generation to change their business models.
Corporate Digital Responsibility will unite sustainability and digitization
Corporate Digital Responsibility (CDR)-the use of digital technology to foster ethical and sustainable business practices-will emerge this year.
Social digital transparency covers client and employee privacy policies for organisations, as well as elements of digital diversity and inclusion.
Economic digital transparency has to do with replacing workers with technology, as well as shifting the nature of jobs through things like the gig economy, for example. The advancement and use of technology themselves, such as the ethics and accuracy of AI decision-making algorithms, as well as the possible weaponization of AI, are also related to CDR.
Lastly, digital responsibility for the environment includes digital technology and the physical environment. This includes responsible e-waste recycling or disposal, and power exploitation of technologies such as bitcoin mining.
Making marketing a positive force for change
For many, marketing is seen as the villain: encouraging the purchase of products and services of sometimes low quality that we do not really want or need with money that we do not have.
Marketing could also facilitate systems of certification and traceability, thereby promoting a more equal society. And to build new business models committed to the needy, the proverbial 'limitless creativity' of marketers may be used. This will involve a critical mass of clients to compel companies to change their policies, and to make it happen with bold Chief Marketing Officers.