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21st century leadership: from business as usual to business as a force for good

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Michael Solomon explains why ‘business as usual’ is a self-perpetuating, systemic failure, how business can become a force for good in the world, and the conditions and tools required to transition from one to the other.

Business is not evil per se. But it sure as hell acts like it with depressing regularity.

This is because of how businesses are programmed and the failures of market capitalism. Consider the following: it is often legal to offload costs onto society and the environment; it is often legal to take advantage of stakeholders (such as consumers, employees, suppliers); it is often highly profitable to offload costs and take advantage of stakeholders; there are always businesses with fewer scruples which will happily operate in these ways to increase their market share.

These four statements are neither controversial nor far-fetched. They are observations, perhaps even self-evident truths. They are the reasons why, inevitably, profit always comes first and the interests of people and planet come second.

This ‘business as usual’ is a systemic failure for which no single entity is to blame. Nonetheless, it is difficult to acknowledge. It is certainly easier for businesses to focus on good news stories and on the positive impacts they may have, rather than on the negatives.

However, by selectively highlighting its positive impacts while failing to acknowledge or discuss the whole picture, business has lost public trust. Too often, businesses appear to say one thing but do another. They give the impression of arrogance, duplicity or of simply not caring. It makes the public cynical of business and sceptical of its willingness and ability to change. It also removes critical incentives for the public to seek out and support responsible businesses and thus for companies to seek to be that choice.

The world is rapidly changing

In reality, many companies do care and are aware of how far and how fast the world is changing. Against a backdrop of climate change, the depletion of natural resources, faltering prosperity and a widening wealth gap, impetus is building. Real change is now possible through the emergence and interplay of powerful forces.

For example, in the internet age, business behaviours are more visible and challengeable than ever; trust, brand and reputation are increasingly critical and are determined by how a business behaves; new tools (including Responsible 100) provide new opportunities for businesses to have more positive impacts, and fewer negative impacts, on the world around us; and people’s expectations are changing – they expect business to provide solutions to the challenges we face, not remain part of the problem.

These forces are changing old paradigms and rewriting old rules. Today, business as usual is still the main game in town. But make no mistake, the revolution has started and leading businesses are beginning to redefine success for the 21st century.

Business as a force for good

Business will reprogramme itself to do good, to serve people and planet, when remaining profitable demands it.

The pursuit of profit influences business, and the world around us, like nothing else. And as profitability and responsibility become increasingly aligned, business will realise its huge potential to make the world a better place.

Responsible 100 is a simple, powerful, flexible tool for any business that is committed to balancing its own interests with everyone else’s. It defines responsibility in terms of a business’s willingness and ability to demonstrate transparency and accountability on a range of social, environmental and ethical issues. It does not publish a checklist of required attributes or values nor require a minimum Responsible 100 score. Instead, it simply requires openness and honesty, that a business can publicly justify all its actions.

Listing on www.responsible 100.com and offering up policy and practice details – guaranteed as accurate, complete and verifiable – for public scrutiny, comment and rating requires businesses to balance their pursuit of profit with the interests of society. It is a challenging ask, but both reasonable and achievable.

We foresee – and are working to help create – a race to the top. That is, conditions by which businesses can compete on the ambition and impact of their social and environmental innovations as well as on price and quality. Responsible 100 enables and showcases companies making the transition from business as usual. Those companies that recognise and welcome an opportunity to prove their commitment to serve and to help people live better lives in a better world.

Michael Solomon is the founder and CEO of Responsible 100, a unique initiative and a growing movement made up of businesses, civil society organisations and individuals.

Further reading:

Success means seeing ourselves as part of the bigger system

Has CSR reached its sell-by date?

The business case for sustainability – an exceptional Forum for the Future event

What gets measured gets managed: sustainability in 21st century business

The Guide to Corporate Social Responsibility 2013

Michael Solomon is the director of Responsible 100. With a background in publishing, Michael hit upon the basic Responsible 100 concept when asked to launch a new CSR magazine and website. Troubled by the motives for large corporates to engage in CSR and the quality of their CSR outputs, he saw the need for an alternative approach which guaranteed credible information from businesses. Responsible 100 is a management tool, a business ranking, a public internet platform, an identification mark and a growing social movement. It includes leading businesses as well as NGO and campaign group partners.

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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