The idea of sustainability has been around for a while and whilst many businesses are starting to realise the economic, social and environmental benefits of operating much more sustainably, we now need to go beyond incremental change. Only by influencing the nature of the systems in which they operate can businesses create a context in which they can innovate for long-term success.
Forum for the Future is an independent non-profit working globally with business, government and other organisations to solve complex sustainability challenges. Today, we are officially kicking off #theBIGshift campaign to emphasise the urgent need to take just such a systems-based approach to sustainability. We are also championing the rewards for those businesses and other organisations who are stepping up to the challenge of creating a sustainable future. You can expect much more from us on #theBIGshift in the months ahead.
System innovation is a set of actions working together that shift a system - a city, a sector, an economy - to create significant change and move that system onto a more sustainable path. These actions include behaviour change, plus a new innovation, plus communication and influencing to scale them up. We need a big shift in collaborative thinking and action to make this happen.
Business models are at risk from all quarters - from fast emerging disruptive technologies to the notion of 'radical transparency', where it's much more difficult to hide supply chain secrets. They are also at risk from major changes in their operating context. We are heading into a VUCA world - volatile, uncertain, complex and ambiguous - where the necessity for more sustainable business practice is ever stronger. Businesses must have one eye on the future if they are to remain successful in a complex and rapidly changing world. Doing nothing presents real risks. Acting now opens exciting opportunities.
To deliver a more sustainable future, businesses need to think of themselves as system innovators - this means innovating their core business, products and services, and understanding their role in the wider system, as well as working to create the conditions in which they will be successful.
We conducted a survey of business leaders in our Network and found that not only did 98% say that business that don't adopt robust sustainability programmes risk failure, but 100% agreed that the sustainability agenda presented genuine opportunities for their business.
Granted, this survey is amongst businesses that already 'get' sustainability to some degree, but there's a good reason they do. There is a robust business case for pioneering sustainability practices, which includes resilient supply chains, efficiency gains and market differentiation. This approach has been working for M&S, a long-standing Forum for the Future partner. From an initial £40m per year investment in 2007 at the start of Plan A came a total business benefit of £185m in Year 5.
Then there are studies such as this one by Harvard Business School, which found low sustainability companies (those with no obvious sustainability policies) were consistently outperformed by high sustainability companies in the same sectors.
The challenges presented by sustainability are inter-connected, the response to these challenges needs to be equally interconnected. In our survey, 96% of businesses we spoke to said there are limits to what they can do alone to tackle sustainability. Added to this, the majority agreed that it was vital to work with competitors as well as partners. So stop kidding yourselves - it's time to collaborate. This presents real opportunities and can step up the pace and scale of change.
To do this you first need to ask yourself, 'where is the line that marks the boundaries of what is pre-competitive and competitive?'. Working out this line removes one of the biggest barriers to collaboration - the fear of losing competitive market positioning.
One of the best system innovators out there is Unilever. The primary motivation for establishing the Marine Stewardship Council over a decade ago was securing future fish stocks (at a time when Unilever owned a frozen fish business). Unilever understood it couldn't achieve the future sustainability of fish stocks on its own. The business case for being a system innovator is supremely logical.
Forum for the Future has brought together many dynamic partnerships. We established the Sustainable Shipping Initiative, a cross-industry coalition with 20 members including ship owners, ship builders, charterers, service providers, engineers and financers. They've collectively defined a vision for 2040 and are working on practical initiatives to reshape the industry. In fact, the initiative now exists as a separate entity and should be seen as a model for how other systems can be shifted.
We are also working with Nike. They discovered that 60% of the environmental footprint of a pair of their shoes is embedded in its materials. But they realised they couldn't address the materials challenge alone, so they've taken a systemic approach and partnered with NASA, USAID and US State Department to accelerate a revolution in sustainable materials.
We filmed Nike discussing why they are taking a systems approach. Watch it here along with others - including Unilever and PepsiCo - discussing why they are addressing #theBIGshift.
To really see success and change, brands can't think of sustainability as separate from their main brand identity - that is why Unilever is integrating Project Sunlight into the evolution of its core brand and P&G is investing in new products in this space. Only by building sustainability into their core brand can companies really enjoy the benefits; only then can they become the leaders that shape the context around them.
This is the approach that is working for The Crown Estate and Kingfisher who have both torn up their separate sustainability strategies and embedded that thinking into the core business plans, to great effect. In fact these organisations are not only looking at how they can implement pioneering sustainable practices but also working with us to explore the concept of working towards becoming 'net positive', not only minimising their impact but considering how they can make a positive difference, environmentally and socially.
Brands can create pull. Henry Ford famously said that if he had asked people what they want, they would have said 'faster horses'. Before the invention of cars, how could we have expected people to demand them? Brands have an amazing opportunity to imagine a sustainable future, and then create demand for the products and services that are part of that future. .
To create change, businesses need to be free to innovate and experiment, even if the results are still uncertain. Kingfisher has bought the digital platform, Streetclub, which allows it to lease its goods - it also encourages a whole range of sharing by local communities and encourages new and positive community interactions. Whilst the route to value creation is unclear, Kingfisher will be able to lead in the new economy by shaping it.
The purchase of Zipcar by Avis earlier this year is significant in two ways. This not only indicates that the sharing economy is here to stay, but shows a new role for big business in scaling more sustainable business models - big business really does have the potential to be the superhighway for small, disruptive and more sustainable businesses.
Brands that last need to look to the future, be long-term and purposeful, have sustainability integrated within them and adopt a system-focused way of thinking. If you haven't already, it's time to join #theBIGshift in sustainability.
To find out how you can join #theBIGshift, visit: http://www.forumforthefuture.org/thebigshift