Make good growth a force for change

We live in remarkable times — the move to save people and planet is accelerating and unstoppable. Scientists, activists, commentators, artists, governments, regulators, and individuals are making themselves heard and making things happen. 

While it seems like there’s so much bad news in the world, there is also much to be thankful for: Since the end of World War II, we have made tremendous gains in incomes, wealth, literacy, and lifespans – and tremendous reductions in wars, child poverty, and hunger. As Barack Obama has said, “If you had to choose one moment in history in which to be born… you'd choose right now”.

All of this has been achieved by the combined efforts of individuals coming together within governments, international organisations, academia, communities, the arts – and business.

In today’s interconnected world, the role that the largest organisations have in the lives of people and the planet plays out in a million ways every day. That means that the smallest of changes, such as switching production methods to limit the use of a rare resource or adding a new language to your app - can have a big impact. Big moves can be game changing.

In recent months, I have spent most of my time at the foot of a remote mountain that towers a kilometre above one of Norway’s deepest fjords: Åkrafjorden, in western Norway. My family has had a little farm for hundreds of years, and I find it is a good place to talk and think about growth. On a farm, there is no question as to whether growth is good or bad. A radical Londoner, Cardinal John Henry Newman put it best: Growth, he said, is the only sign of life. This is true of life on a farm. But it is also true of our economies. 

When growth stops – when the UK economy contracts by 20.4%, and the eurozone shrinks by 12.2% – very bad things happen to people on the ground. Families lose their livelihoods, the disadvantaged fall permanently off the bus, and essential public investment is choked off. The transition to a net zero future will impact the lives and livelihoods of billions, and its incumbent on business to contribute towards a fair and equitable transition.

At Xynteo, we believe business needs to create a new definition of ‘growth’ to tackle the challenges we currently face – one where leaders think long term, work with, not against nature, and use their influence and resources for the many, not the few.

For us, this is Good Growth.

To achieve good growth, we’ve identified three mission-critical areas that business leaders need to engage with to ensure we choose a brighter future for our children and our shared planet.

 

1. Humanity and nature

For far too long, we have pitted society against the environment, destroying nature with enormous speed. According to Climate Analytics, most of the 2.5 billion children living today could live to see a world 1.5°C warmer. And more than 90 percent of today’s 16-year-olds could live to see a world that is 2°C warmer.

We know that four countries alone account for more than half of all global emissions: China, the U.S., India, and Russia. That four industries account for 60 percent of all global emissions: transport, agriculture, and heavy industries such as cement and steel. And that 70 percent of global emissions have been generated by just 100 companies since 1988.

David Attenborough summarised it well when he called climate change a systems challenge. He points out that it is “the biggest threat to security that modern humans have ever faced”. The head of the United Nations calls it a “crisis multiplier”. Climate change is also therefore an economic issue, a humanitarian issue, and a security issue. 

But – even in these figures there is the opportunity for action and a better future. If 100 companies are generating the lions share of emissions, then tackling this challenge only requires the leadership of 100 companies to dramatically cut carbon emissions. 

A great example of action comes from India, where with our corporate partners, we have established Vikaasa, a cross-industry program with eight other world brands including Unilever, Birla, and others focused on energy transition, mining, plastics, and healthcare - focussed on delivering net zero both for their organisations and within their communities.

Find out how we help your leaders create Planet-Positive Growth

 

2. The few and the many

One of the amazing strengths of the capitalist system has been its powers of generation – creating more out of some — whether we are talking wealth, or access to education or jobs. We have seen what this value generation can do in practice: a billion people have lifted themselves out of poverty over the past few decades.

But the system has stalled – and too often the benefits go to the few and not the many. Between 1978 and 2018, to take one example, productivity in the US rose by 108 percent while the wages of workers stagnated. Today, the top 1 percent hold 40 percent of all global wealth – a level not seen since a century ago.

Being excluded from opportunity is a problem for the individual and their families. Equally, it is a problem for businesses when they aren’t part of an inclusive economy – limiting their opportunity to grow. We saw this during the pandemic when millions of small businesses struggled to stay open. Exclusion is in no one’s interest, and inclusion is in the interest of all.

In Europe we have established a program with key partners called Europe Delivers. In this coalition, we have many projects on how to expand the economy by including ever more into the economy: Mastercard is leading on financial inclusion for the growing Gig Economy; Verizon on the future of work; ABB is leading on socially responsible automation; and Manpower on up-skilling and re-skilling and on catalysing socially regenerative business.

All these activities are aimed at ensuring greater inclusion in the workplace, communities, and environments – supporting our objective of a fairer and more equitable social and environmental balance.

Find out more about how we can help you deliver Inclusive Growth

 

3. Between the short and the long term

Lord Browne, the former CEO of BP, once said to me: “You know, Osvald, I used to think that if I took care of the quarters the years would take care of themselves. How wrong I was”. Back then the reflection punched me in the gut, and it retains its force today. The way our economic and financial system aggressively drives short-term returns means that we overwhelmingly favour efficiencies over transformation. We now need to extend the patience of our capital.

There is evidence that this makes good commercial sense. For instance, nearly six out of 10 sustainable funds delivered higher returns than equivalent conventional funds over the past decade. And, more importantly, we need to show honour and take responsibility for the generations ahead of us.

In many respects the importance of long-term thinking in delivering the first two mission-critical areas cannot be underestimated. Delivering a new normal between humankind and the natural world, and between the few and the many requires a shift from the short and long term – in particular, as our economic system returns to growth as we emerge from the COVID pandemic.

The good news is that most, if not all, large companies have the track record, financial resources, technologies, leadership, and the teams to really orchestrate the net-zero transition globally across all sectors. What is required is the commitment of senior leaders to make this transition a priority and a reality.

Find out how we help leaders create innovative, long-term growth

 

Conclusion

This is of course not a walk in the park and there are serious challenges. By the time COVID hit, we already knew that we had a short window of time remaining – about 10 years – in which to avoid catastrophic climate change. 

And we know the task is enormous: shifting to low- or zero-emission power generation; decarbonising hard-to-abate sectors like steel and cement; building a future-fit food system; electrifying transport; and adopting smart urban planning.

The clock is ticking, the window is closing, and the task has become even more difficult. Why? Because as COVID-19 had laid bare deepening lines between the haves and the have-nots. But, we can do this and achieve an equitable and sustainable world – if we come together in optimism and commitment to a brighter future. For the planet, and for the many.

Contact us to discuss how we can help your organisation and leaders deliver a brighter future with planet-positive, inclusive, and long-term growth.

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