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Tuesday, November 10, 2015

Welcome to the next generation/Part 2

This is part 2 of the story:

Good article--which is long and will be broken up into two parts--that mimics our findings;  that is, we are transforming right now into the next great industrial revolution.

We, too  believe 2015 is a pivotal year in this process.  Govt sets the playing field and it is important they expand that field and make it easier for us to play on.

Great momentum has been built.  The business world is fast adjusting and starting to set very different social goals.  Consumers are demanding safer, healthier products.  Education is at the forefront of pushing sustainable changes.  The economics around clean energy are great.  All the pieces are coming together to drive building a whole new, more resilient world.  


One company that is already thinking in these terms is Kellogg which has compared the SDGs with its own business portfolio on such goals as ending hunger, achieving food security, improving nutrition, promoting sustainable agriculture, achieving gender equality and empowering women and girls.  Kellogg, as explained by its Vice President and Chief Sustainability Officer Diane Holdorf, is looking to harmonize its evolving business strategy with SDG expectations to identify synergies and opportunities.

There has already been much discussion about the Papal Encyclical and its likely impact near-term and over longer periods.  On my own initial reading of Laudato Si, I concluded that the Papal pronouncement would be measured less through any direct impact on the climate change negotiations being conducted through the Conference of the Parties (COP) process and more on the potential to catalyze a transition in the thinking of Catholics and those of other faiths as they contemplate the relationship between their own core values and those embodied in sustainability. 
How and whether that transformation occurs remains to be seen, but Pope Francis through his Encyclical has certainly added a new and different voice to the sustainability conversation that is unique in its originality and authenticity. In his specific comments on inequality, poverty and climate change as products of our contemporary economic system, Pope Francis has significantly expanded the boundaries of the sustainability dialogue to explicitly question some of the major operating assumptions of capitalism. 
The resonance of the Pope’s message has the strong potential to catalyze both spiritual and secular stakeholders to advance new criteria for implementing capitalism in the future. If it does, it is unlikely that global companies can be idle bystanders in a debate that could, over time, directly impact their future business investments and operations.

From multi-lateral to mini-lateral 

In an important essay published by the Financial Times on February 15, 2013, international relations analyst Moisés Naim wrote that the “gap between the growing need for joint international action and the declining ability of nations to act together may be the world’s most dangerous deficit.”

Numerous examples document this assertion ranging from pirates hijacking ships off the coast of Somalia, overfishing of critical species, the tortuous path followed by the European Union to fashion a viable long-term solution to the Greek economic crisis, and the debacle of Syrian refugees pouring across the

Levant into the Balkans to destinations not altogether known at this writing. Even the burgeoning optimism for a substantive climate change agreement in Paris has led many of its proponents to temper their expectations.

As former New York City Mayor Michael Bloomberg wrote in the June 29 Wall Street Journal, “The Paris conference has the potential to be a great success, but only if measured by how much it speeds up progress, rather than whether we pass a finish line that is not yet within reach.”

Such multi-lateral failures and limitations can be juxtaposed against an increasing level of confidence among a growing number of global companies, NGOs and policy analysts who have designed and implemented initiatives involving a more targeted set of objectives and strategies during the past decade. These specific “mini-lateral coalitions” (as Moisés Naim calls them) consist of a limited number of key companies, countries or customers that possess the ability to scale sustainability initiatives across their particular business sectors.

For example, companies such as Marks & Spencer and Unilever, acting through the Consumer Goods Forum, have successfully worked with their business peers to launch ambitious commitments to phase out hydrofluorocarbons in refrigeration units, prevent food waste and protect rainforests.

In addition to such sector wide collaboration, there is a growing interest and commitment among companies in different businesses to leverage their investments for sustainable business and societal advantage.

Actions such as the NRG Energy and Unilever partnership to provide solutions for onsite and offsite renewable generation to achieve 100% clean energy for all of Unilever’s US sites by 2020 are also intended to be scalable and transferable to other industries. Similarly, General Motors’ partnerships with dozens of US utilities are aimed at designing the foundations for a cross country network of electrified vehicle infrastructure to accelerate consumer acceptance of electric vehicles.

Major government investments, such as those made by the Advanced Research Projects Agency-Energy (ARPA-E), are designed to develop and transform energy technologies in a manner similar to the role that the Defense Advanced Research Projects Agency (DARPA) has performed in catalyzing the Internet and major telecommunications investments that ultimately became widely commercialized by the private sector.

The proliferation of these and other mini-lateral initiatives across companies, NGOs and governments is at an early stage of reshaping the strategic purpose of major global companies. When The Dow Chemical Company announced on April 15 its 2025 Sustainability Goals it was, in fact, redefining its purpose as a corporation and its role in society.

The majority of its seven goals — delivering breakthrough innovations, advancing a circular economy, valuing nature, and re-inventing chemical technology to increase consumer confidence — cannot be achieved through its traditional role as a commodity chemicals manufacturer.

Instead, Dow has concluded that its future lies in the creation of new products and services through partnership coalitions with businesses, NGOs, government agencies and other knowledge centers to enable it to significantly expand the traditional boundaries of what constitutes a chemical company. By doing so, it is redefining business performance and societal expectations for itself and for the entire chemicals’ sector.

The dynamics unleashed by mini-lateralism (at the company or societal levels) are also likely to stimulate collaborative partnerships to discern both the impacts and opportunities associated with global as well as regional megatrends. This, in turn, will inaugurate an examination of how best to optimize the roles of business, government and other stakeholders, the associated skills they need to develop in both developed and emerging markets, and new governance processes to ensure appropriate transparency and accountability.

In some instances, results from specific mini-lateral coalitions will ultimately need to be reconciled with more traditional multi-lateral processes. The higher expectations for a climate accord at COP21 stems, in no small part, from the galvanizing effect that the November 2014 US-China announcement of their respective post-2020 commitments had upon negotiators from other nations.

The next generation of sustainable development that has now arrived will undoubtedly be, in the immortal words of Bette Davis in the 1950 movie All About Eve, “a bumpy night” that interchanges both risk and reward.

Those organizations that minimize their risks and commit to continuous learning to build flexible new systems of collaborative innovation linked to solving global scale societal problems are more likely to satisfy shareholder and stakeholder expectations. By doing so, they also increase the probability of their own viability for a future that’s already knocking at their doors.

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