Is sustainability history repeating itself? To some, it appears that sustainability is heading back to the 1990s when it faded away due to lack of a clear business case and associated failure to capture executive attention (what I call “the sustainability train wreck of the 90s”). Today, we are seeing general business pessimism as indicated by PricewaterhouseCoopers’ Pulse Survey:
“More than a third (34%) of CEOs say that the average competitor in their industry will be out of business within three years if it doesn’t change its business model.”
Part of the business model change appears to be walking back sustainability goals, targets and priorities. Financial Times recently reported on this trend:
“Large corporations, including Unilever, Bank of America and Shell, have in the past year dropped or missed goals to cut emissions or to shrink ties with the most polluting sectors. Others have simply skipped over their promise to improve. Most have justified the failure to keep up the effort with a common complaint: political and regulatory factors outside companies’ control are slowing progress. These include a failure of standard-setting and clear regulation, insufficient government support, and delays in the rollout of new technologies…
Many companies set their goals without realising how much work it would be to meet them, says Rachel Whittaker, head of sustainable investing research at Dutch asset manager Robeco, likening it to the feel-good effect of buying a puppy at Christmas. ‘Everyone got swept up in a wave of enthusiasm,’ she says. ‘The reality is not so easy.’”
Hmmm – businesses restructuring/restrategizing at the same time they pull back from environmental commitments … that doesn’t build confidence. Perhaps more tangible is the troubling trend of CSOs leaving their positions due to burnout and lack of corporate commitments, as covered in this article from Eco-Business last month. I’m personally hearing similar things from my contacts and friends in the field. The “ESG honeymoon” may be coming to end for CSOs and sustainability staff, but that doesn’t mean it is the end of the world. In coming blogs, I’ll share ideas about how to use current trends of business model restructuring to your benefit.
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