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Sustainability Leadership
Paul Begley, Director, Customised ProgrammesOslo, 17 October 2019
“Companies that don’t adapt [to climate change] – including companies in the financial system – will go bankrupt without question.
But there will be great fortunes made along this path aligned with what society wants”
Mark Carney,
Governor of the Bank of England, July 2019
Climate change will shape the future of capitalism
Subtitle here can go quite a long way but not past the white line
Title of your slide here can go over two lines
What is sustainability leadership?
Sustainability leadership is where organisations proactively engage with external forces such as climate change, forest destruction, public policy, changing consumer preferences and poverty alleviation.
The key question is not ‘how do you succeed in spite of rapidly changing social, environmental and economic issues?’ but rather ‘how can these changes fuel your success?’
My guide to sustainability leadership
1. Calibrate your worldview
2. Set a ‘North Star’ for progress
3. Understand your business
4. Engage key decision-makers
5. Find things that make a difference
6. Communicate clearly
7. Whatever you do, don’t lose
My guide to sustainability leadership
1. Calibrate your worldview
2. Set a ‘North Star’ for progress
3. Understand your business
4. Engage key decision-makers
5. Find things that make a difference
6. Communicate clearly
7. Whatever you do, don’t lose
A. 50 years
B. 60 years
C. 70 years
Question 1:
What is the life expectancy
of the average human in
the world today?
A. 20 percent
B. 50 percent
C. 80 percent
Question 2:
Globally, how many one
year old children have been
vaccinated against some
disease?
A. 20 percent
B. 40 percent
C. 60 percent
Question 3:
In all low-income countries
across the world today,
how many girls finish
primary school?
Answers
A. 50 years
B. 60 years
C. 70 years
Answer 1:
What is the life expectancy
of the average human in
the world today?
If you answered “B. 60 years”, you would have been
right in 1973!
A. 20 percent
B. 50 percent
C. 80 percent
Answer 2:
Globally, how many one
year old children have been
vaccinated against some
disease?
People generally get this wrong. In fact, of 108 audiences
surveyed, a group of donors from Swiss Aid scored the worst
results, with most people answering 20 percent.
A. 20 percent
B. 40 percent
C. 60 percent
Answer 3:
In all low-income countries
across the world today,
how many girls finish
primary school?
There are now only a few countries in the world where
fewer than 20 percent of girls finish primary school
• We are often wrong about the world
• In many instances, not only are we incorrect
but we think the exact opposite to what is
happening
• Often our decisions are informed by the
wrong world view
My guide to sustainability leadership
1. Calibrate your worldview
2. Set a ‘North Star’ for progress
3. Understand your business
4. Engage key decision-makers
5. Find things that make a difference
6. Communicate clearly
7. Whatever you do, don’t lose
We know where we want to go…
But we are not mobilising finance, innovation, energy and effort quickly enough
Nedbank’s FairShare 2030 tilts the loan book to sustainability outcomes:
✓ Recognises that Nedbank should not do everything but needs a proactive response
✓ Lending informed by the social and environmental needs of South Africa
✓ Robust analysis of the investable opportunities –and work with partners to create new vehicles
✓ Absolute targets, not relative ones
Finding the North Star is critical
https://www.youtube.com/watch?v=FWei2jjBnNE
Future we’d get
Future we want
TIME 2050
Su
sta
ina
bilit
y
2019
Exam question: What is your unique contribution
to a world of 9 billion people?
My guide to sustainability leadership
1. Calibrate your worldview
2. Set a ‘North Star’ for progress
3. Understand your business
4. Engage key decision-makers
5. Find things that make a difference
6. Communicate clearly
7. Whatever you do, don’t lose
The nature of value in the 21st Century is changing quickly: what risks do you have?
There is a major transformation underway in the world
Direct impacts:
The coastal power
station:
How will changing sea-
levels affect the
company’s ability to
repay its loan?
Future liabilities:
Companies are
increasingly being
called up for historic
activities. Should oil
and gas companies pay
the cost of flood
defences?
Ethical judgements:
Can pharmaceutical
companies be allowed
to benefit from sick
societies indefinitely?
Are banks fit to provide different forms of (climate) finance?
Our analysis shows that many organisations in the finance sector lack the culture,
procedures and behaviours to deliver.
• Many processes and risk models neglect/under estimate the risks of climate change.
Understanding the value at risk of today’s approach is as important as identifying
tomorrow’s opportunities.
• Individuals are incentivised for the status quo: often they lack knowledge and investment
opportunities, with inappropriate KPIs and bonuses.
• Availability of products: many organisations don’t have the necessary confidence to offer
products and services which can support the transition to a low-carbon economy.
• Alignment to career development: Culturally, climate finance often feels like it is career-
limiting or that investment decisions are driven by reputational benefits.
A bad investment into sustainability is still a bad investment
My guide to sustainability leadership
1. Calibrate your worldview
2. Set a ‘North Star’ for progress
3. Understand your business
4. Engage key decision-makers
5. Find things that make a difference
6. Communicate clearly
7. Whatever you do, don’t lose
Education, education, education
• The average, male chief executive is now 57 years old. In many cases, members of the Board are much older.
• CISL’s analysis indicates that most leadership development programmes do not effectively consider the external context
• We believe that effective change can happen anywhere within an organisation
• Grant space, time and resource to continuous education.
https://www.cisl.cam.ac.uk/resources/sustainability-leadership/building-leaders-for-long-term-business-performance
Leaders in the 21st Century need to receive continuous education to change their world view. Our analysis shows that it should:
• Nurture purpose that is relevant to society, authentic and shapes strategy and action to align business success with the delivery of positive social and environmental outcomes;
• Build values, thinking and practice that are required to deliver on this purpose, and;
• Support reflection and adaptability, ensuring consistency, integrity and a meaningful level of ambition, holding itself accountable to deliver results.
We need to find a new form of leadership
development
https://www.cisl.cam.ac.uk/about/leadership-hub
My guide to sustainability leadership
1. Calibrate your worldview
2. Set a ‘North Star’ for progress
3. Understand your business
4. Engage key decision-makers
5. Find things that make a difference
6. Communicate clearly
7. Whatever you do, don’t lose
Climate change in perspective
Copenhagen, 2009:
developed countries
pledged to mobilise
$100 billion a year by
2020.
MDB Finance: Of
the $100bn
distributed by
MDBs in 2014,
25% was
considered to be
‘climate finance’
Annual investment, globally,
c. £18 trillion
Annual green
infrastructure
investment needs
by 2020: $5-7
trillion
Data from the World Resources Institute
Ship goods more
efficiently
Drive an electric
car
Invest in high-
speed trains
Fly less … and on
fuel-saving planes
Ship goods more
efficiently
Drive an electric
car
Invest in high-
speed trains
Fly less … and on
fuel-saving planes
75.7 million cars off the road
55.2 million cars off the road
35.4 million cars off the road
10.7 million cars off the road
The impact
is 7.5 times
greater!
What we prioritise makes a difference
Manage
refrigeration
chemicals
Install onshore
wind turbines
Cut down on food
waste
Eat more plants
and less meat
629 million cars off the road
593 million cars off the road
495 million cars off the road
464 million cars off the road
Managing
refrigeration
chemicals is
nearly 10x
more
important
than electric
cars
What we prioritise makes a difference
Restore our
tropical forests
Manage
refrigeration
chemicals
Install onshore
wind turbines
Cut down on food
waste
Eat more plants
and less meat
Restore our
tropical forests429 million cars off the road
My guide to sustainability leadership
1. Calibrate your worldview
2. Set a ‘North Star’ for progress
3. Understand your business
4. Engage key decision-makers
5. Find things that make a difference
6. Communicate clearly
7. Whatever you do, don’t lose
Frame communications clearly
“It is impossible”
is not the same as
“we cannot do it”
• Corporate activities are being scrutinised in new ways
• In the connected world, nearly everyone can express an opinion
• Bad news travels fast, civil campaigns mobilise quickly
• Are you aware of the ‘heroes’ and ‘villains’ in your business?
The social contract is being quickly redrawn
My guide to sustainability leadership
1. Calibrate your worldview
2. Set a ‘North Star’ for progress
3. Understand your business
4. Engage key decision-makers
5. Find things that make a difference
6. Communicate clearly
7. Whatever you do, don’t lose
Thank you!
Paul Begley,
Director, Customised Programmes
University of Cambridge Institute for Sustainability Leadership