As political, NGO, community and business leaders come together in Dubai for COP28, we know that meeting the interwoven challenges of environmental degradation and societal dislocation will be the greatest challenge they will face. To realise a net zero future, and grasp the opportunities of a new economy, businesses need a generation of visionary leaders who can balance priorities and shift their model towards regenerative growth. But what does this look like, and how do we make it happen?
While governments work to get international agreement and action through the (often slow) conference of parties’ process, businesses have both the ability and resources to act in different and accelerated ways - business leaders are facing into the reality of a world undergoing significant change and apparently competing priorities. Across the next decade, our collective determination to address, avert, adapt, and mitigate the impact of climate change is widespread. In recent years we’ve seen many organisations take up the banner of action, at times with mixed success, but as we get deeper into the 2020s, we know that the pressure on senior leaders to balance their impact on people and planet with existing responsibilities will only grow.
Here we discuss two game changing insights from our work with some of the world’s largest businesses and their leaders, and how we develop a generation of regenerative leaders.
Genuine collaboration across value-chains and sectors is vital
Announcing net-zero targets is, obviously, only the first step to delivery. Post this stage, most of large global companies focus on decarbonising operations that they can fully control (e.g. optimisation, efficiency improvement, switching to electricity where possible, etc.). This is understandable as traditionally business culture has always been focused on ‘what you can control, you can change’. As we move deeper into the 2020s though, leaders and organisations will be required to accelerate their engagement with their Scope 3 emissions, to expand their thinking, activity and impact beyond the day to day world in which they operate. What is required is a systemic approach. Scope 3 emissions (and its implications) are a wicked problem for businesses to engage with, and wicked problems take new, different, and collarborative perspectives to unlock, in particular when looking at value chains, their place within a cross-sector alliance of businesses, and how they approach positive progress.
The challenges we face are not only too big to tackle alone, basic business imperatives block action when there is also no incentive to solving someone else’s problem. Why invest in decarbonising a supply chain when your competitors will benefit without the spending their own money?
Leaders will need to think beyond existing ways of operating to work with a variety of ecosystem actors to find mutually beneficial avenues of progress that can create a significantly more sustainable foundation for driving positive growth. A consumer good company, for example, that wants to decarbonise their logistics operations should work with their customers, competitors who operate in the same market, logistics companies, truck OEMs, energy companies, financiers, governments, and local stakeholders.
To do this they need to think system-wide and outside of siloes. Only when you understand the zone in which you operate and how your partners operate (and beyond) can you start to see the collective opportunities. Key to unlocking the potential here is a mindset and way of work that values open dialogue and actively listening to a variety of opinions and ideas. Your supplier knows their world better than you do; and by having a deeper understanding and appreciation of their challenges, you can make overcoming your own much more straightforward. It all sounds obvious, but time and again we have worked with businesses that think they know their value chain; but scratch the surface and that understanding is often limited to how it effects their organisation, without appreciating why it has that impact and what can change.
By engaging across the system and adapting your communication approach and mindset to reach a broad set of stakeholders, your organisation and its value chain has a significantly better chance of aligning behind a common purpose and accelerating the type of positive impact we are all striving to deliver.
This year, Xynteo is excited to be in Dubai for COP28 to accelerate people and planet-positive growth.
Balancing short-term distractions with long-term drive
While immediate concerns such as inflation, supply chain disruptions, shareholder returns, and energy price volatility demand attention – for leaders to be effective creating the vision and pathway to a better future, they must adeptly balance the urgency of the short-term with the long-term pathway to responsible business models. It is 'hard' to ignore calls from shareholders for short term profits. You will come under huge pressure. This could be stronger in why the longer time is the most important dimension (without mentioning the broken economic system/externalities yada yada)
It is a huge mistake to see this transition as ‘cost’ or burden on businesses. Organisations that successfully navigate the transition and bring key stakeholders along for the journey (shareholders, investors, employees, and customers) will be rewarded for their resilience and adaptability. It’s critical in debates about the trade-offs between the long and the short, that we remember that for innovative and thoughtful business leaders, the shift to a sustainable economy has the potential unlock significant commercial opportunities, new and better markets, and products and services that regenerate the planet as well as support business returns. The good news is that organisations are already making this happen. For instance, H2GreenSteel is leading a sea change in how we produce steel, one of the more carbon intensive industries on the planet. Recently they announced that they were able to raise over EUR5bn of equity and debt for their green steel project in Sweden and pre-sold a significant chunk of their green steel already.
In the battle to fight climate change and maintain business viability, it’s increasingly clear that leaders who build organisations that can respond to ever-changing contexts, while maintain a focus on the long-term objectives, are the ones that will succeed. For the sustainable transition this is even more critical as the timeframe for transformation is potentially multi-decade for some organisations. Being able to develop yourself and your team’s ability to step between big picture perspective to detailed view can enable your organisation to deliver such long-term goals. We can no longer rely on specialism around sustainability, it must be baked into all decision-making processes, and be fostered as innate abilities in any role.
For instance, while finding solutions to supply chain disruptions, zooming out to a wider perspective might lead to the exploration of more resilient and sustainable supply chain practices. By integrating long-term sustainability goals into the organisation's strategic planning and mobilising the people and resources required for planet-positive action, leaders can ensure that sustainability is a fundamental part of the business strategy. And engaging with various stakeholders using a range of approaches that present the connection from the immediate to the long term, leaders can motivate understanding, build trust and support for the long-term vision with employees, customers, and investors, improving the likelihood of delivering on the organisation's commitment to sustainability.
The next five years will profoundly impact on the next 500
The imperative for transforming business leadership is not merely a matter of choice; it is a necessity for addressing the multifaceted challenges of our times. Although business leaders are under pressure to meet quarterly shareholder expectations, their legacy will be remembered for the generations to come based on the impact they make on People and Planet. Here at Xynteo, we are poised to take the lead in propelling the world toward a future marked by even greater advancements.
We are already seeing impacts. We already have our first declared, official climate refugees. The impacts are being felt now, and this is an exponential curve not a linear one. The more we do now the better outcome (or even possibility) for have to correct the disastrous future that we will see ourselves in the next decade.
Or contact us to find out how we can help your leaders and organisation create planet-positive and inclusive growth.