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  • SustainAbility Research Director Chris Guenther recently caught up with John Elkington, Co-Founder of SustainAbility and Founding Partner and executive chairman of Volans, about the launch of John’s recently published book, The Breakthrough Challenge. In addition to the book, they discuss the dilution of the sustainability agenda, the shifting role of the Global C-Suite, and the upcoming Breakthrough Decade.

    Chris Guenther: SustainAbility has closely tracked–and frequently discussed with you–your work on Breakthrough Capitalism, which you framed at the first Breakthrough Capitalism Forum in May 2012, and subsequently in the Breakthrough and Investing in Breakthrough reports. How have these ideas evolved to what is now represented in The Breakthrough Challenge, and what specifically drove you and Jochen Zeitz to write the book?

    John Elkington: I had no plans to write another book, Chris, having only recently published my eighteenth, The Zeronauts: Breaking the Sustainability Barrier. But then I got an invitation from Sir Richard Branson’s foundation, Virgin Unite, to attend a small roundtable outside Geneva. On the second day, Jochen Zeitz walked in and, I have to say, there was electricity between us around our thinking and ideas. I didn’t give it much more thought, but a couple of months later he got in touch and suggested writing a book together.

    When Jochen and I spent some days together, the book evolved further. The Virgin Unite meeting we originally attended proved to have been the gestational event for what became The B Team, a not-for-profit initiative founded and co-chaired by Sir Richard Branson and Jochen, and where I am on the Advisory Board. The idea is to bring together a global group of leaders to create a future where “the purpose of business is to be a driving force for social, environmental and economic benefit.” …

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  • Flickr image by Tim Reckmann

    When Warby Parker launched its prescription eyewear brand four years ago, it broke the industry mold by offering a unique business proposition. Whereas most eyeglass shops depend on storefronts to bring in customers, Warby Parker created a business model based on bringing the glasses to the consumers. Using their “Home Try On” system, the company’s customers can order up to five pairs of glasses to try on in front of their bathroom mirrors – for five days at no charge.

    Much has been written about Warby Parker’s hipster brand identity as well as its social mission: for every pair of glasses sold, the company donates a pair to a person in need. What I find unique about its model, however, is the potential for sustainability by way of reduced resource usage. Just like Netflix and other virtual brands that have come before it, Warby Parker is cutting energy and resource use by streamlining operations.

    Once, the consumer marketplace was almost exclusively comprised of single-purpose brick and mortar stores – the butcher, the baker, the greengrocer and even the optometrist. Later, grocery stores – and, eventually, big box stores, retail outlets and shopping malls – put several of these services under one roof. It isn’t hard to see why the department store model was so profitable: erecting a store on every corner or in every town provides customers with convenience, builds brand recognition, and can even create a sense of community. …

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  • Craig Bennett, Friends of the Earth

    This interview was originally published in the summer issue of Radar Magazine – Issue 04: Better, Connected.

    Craig Bennett rejoined Friends of the Earth as Director of Policy and Campaigns in 2010 after spending nearly four years as Deputy Director of the Cambridge Programme for Sustainability Leadership (now CISL), where he headed up the Corporate Leaders Group, bringing together business leaders to tackle climate change.

    He continues to have a foot in both business and NGO camps and lectures on several executive programmes at business schools. He is also on the Net Positive advisory panel for Kingfisher. SustainAbility Director Zoë Arden spoke with him about bees, business as campaigners and how companies should be more engaged in policy.

    Zoe Arden: Stakeholder engagement has been mainly business-driven to date. How have engagements with business evolved from an NGO perspective? As we move into an era of greater partnership and collaboration, what are the emerging challenges for the NGO sector?
    Craig Bennett: I think one of the first things to do is differentiate between the types of NGOs and understand the difference between those that campaign, or try and effect policy in one way or another, and those that are ‘service providers.’ …

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  • Sustainability reporting is stalled. That is, reporting is simply not driving as much impact as it could.

    This is not to say that reporting has not evolved since its early days or led to important and useful information and action. It certainly has. Companies that have been monitoring and reporting on an array of social and environmental issues spanning many years have created numerous baselines, data sets, subject-matter expertise and collaborative relationships upon which to build.

    Impact-wise, reporting has enabled efficiency gains, informed stakeholders about key issues, enhanced corporate reputations, and started to inform some investor decisions. …

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  • Image © CC Ilias Bartolini

    An abbreviated version of this piece was originally published in the summer issue of Radar Magazine – Issue 04: Better, Connected.

    Although a proposed increase in the US minimum wage stalled in Congress in early 2014, inequality has not lost momentum, and if anything, is poised to remain high on the global agenda. The Initiative for Responsible Investment at Harvard held a webinar on “Income Inequality and the Potential Risk to Investors” earlier this year, concluding that any company that furthers inequality could face substantial revenue losses from disengaged employees, lawsuits and reputational costs. McDonald’s echoed this sentiment by including inequality as a material risk in its latest 10-K. Meanwhile, the International Monetary Fund has become an unusual, though strong advocate of the need for countries to address income inequality because of the “dark shadow it casts across the global economy.”…

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  • Janet Voûte, Global Head of Public Affairs, Nestlé

    This interview was originally published in the summer issue of Radar Magazine – Issue 04: Better, Connected.

    After 15 years in strategy consultancy with leading firms Bain and Company and The Boston Consulting Group, Janet Voûte moved into public health as CEO of the World Heart Federation. She then spent two years as Partnerships Adviser at the WHO and became Global Head of Public Affairs at Nestlé in December 2010.

    SustainAbility has been working with Nestlé since 2006 on Creating Shared Value reporting, stakeholder engagement and strategy, and most recently arranged the company’s fourth stakeholder convening in London. Rob Cameron spoke with Janet about the increasing importance of speaking the language of both business and NGOs and Nestlé’s stakeholder engagement journey.

    Rob Cameron: How would you characterise stakeholder engagement when you arrived at Nestlé?
    Janet Voûte: I arrived a few years after the terminology and thinking around Creating Shared Value (CSV) at Nestlé had been launched, and the focus on being the leading nutrition, health and wellness company had been clearly defined. Additionally, the Chairman and the Public Affairs team had also agreed upon nutrition, water and rural development as priority areas for action. …

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  • Image © CC Außerirdische Sind Gesund via Compfight

    An abbreviated version of this piece was originally published in the summer issue of Radar Magazine – Issue 04: Better, Connected.

    From consumer pressure driving Tesco to ban sweets and chocolates from checkouts in all of its stores to the formation of campaign groups such as Action Against Sugar in the UK earlier this year, there is once again a convergence of stakeholder momentum around the major health and economic costs associated with sugar-related health problems including obesity. …

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  • Image © Libelul: Flickr

    An abbreviated version of this piece was originally published in the summer issue of Radar Magazine – Issue 04: Better, Connected.

    While the looming threat (and the perception of) climate change becomes more pronounced and immediate, we are seeing responses diverge in expected and unexpected ways. Recent efforts to broaden engagement on climate change, from the IPCC and US National Climate Assessment, focus on making climate risk relevant and tangible to people’s everyday lives. In the investment community, shareholder activism continues to be an influential front, with 12 US companies asked in 2014 to explain carbon asset risks via shareholder resolutions. A resolution on stranded assets at Anadarko Petroleum Corp. garnered the highest support ever for a carbon asset risk resolution (30% of the vote). …

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  • image © x_tine, Flickr

    This post has been co-authored by Michael Harvey and Margo Mosher.

    Materiality has taken the main stage of the sustainability agenda – and for good reason. The practice of identifying and prioritising the sustainability issues that matter enables a company to make better decisions overall. When business leaders make decisions that recognise both financial and sustainability material issues, and the relationships between them, they can position their businesses to effectively manage operations and set strategies for the long term.

    Conducting a robust materiality assessment that focuses on the most strategically material issues and engages corporate strategy teams in the process involves understanding:

    • How can the materiality assessment process better serve the changing needs of a company?
    • How can the outputs of a materiality process be integrated into the business?
    • What is the best way to communicate the outputs of a materiality process, internally and externally?
    • Who needs to know about these issues from the company’s perspective, and how can they use this information?

    SustainAbility has revised its own approach to materiality to help companies achieve greater integration of the outputs within this process. This approach – or “materiality 2.0” – addresses the above questions in a way that builds on existing good practice and reflects what we see as representing the next step in the evolution of materiality approaches. …

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  • Mask wearing has become a common sight in downtown Beijing. Taken April 2014 © Chris Wash.

    An abbreviated version of this piece was originally published in the summer issue of Radar Magazine – Issue 04: Better, Connected.

    The Chinese government’s declarations of environmental concerns as first-order priorities have a spotty history in heralding imminent change, due largely to uneven enforcement on a state and local level. So one could be forgiven if the flurry of actions announced in the first half of 2014, which include statements by a government advisor that the country will set an absolute cap on carbon dioxide emissions for the first time and adopt a revised Environmental Protection Law (the first in 25 years) imposing harsher financial and criminal punishments to polluters, is viewed with scepticism. But stakeholder activity to hold the government accountable for their environmental stewardship, whether by protest or product offering, has risen too. We have seen more signs of environmentally-sparked protests, like one fought over the construction of an industrial plant in Guangdong province or another that incited a riot in Hangzhou over plans to build Asia’s largest waste incinerator project, take place this year….

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  • Image © CC Domiriel: Compfight

    The identification and engagement of a company’s stakeholders to build trust, reduce risk and develop effective partnerships have been at the core of our work with business leaders for many years. As the rhetoric grows that no singular business is capable of addressing environmental and social challenges alone, companies must think now more than ever about how they can engage with NGOs, governments and other actors to develop collaborative solutions to system problems.

    Over the years, we have seen stakeholder engagement move in this direction. It’s evolved from tactical, compliance and risk-focused to more strategic and solutions-orientated, with stakeholders engaged up and down the value chain—not only as partners on critical issues but also as key players to improve business performance. …

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  • DoD photo by Staff Sgt. Sean K. Harp via Flickr

    The continued downward slide of government leadership in driving the sustainability agenda forward, coupled with lackluster policy and advocacy engagement from the private sector, is the inconvenient truth revealed in this year’s GlobeScan / SustainAbility Survey, The 2014 Sustainability Leaders.

    While a clear majority of experts see collaboration with governments as the “most effective” approach companies can take to creating pro-sustainability policies, less than a third believe companies will engage in this manner, as noted in our 2012 Collaborating for a Sustainable Future report. …

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  • Once a quarter, SustainAbility shares its latest thinking on a handful of trends currently ‘On Our Radar’. In Spring 2014, we are thinking about impacts of the EU’s softening of climate targets, China’s ‘green decade’, and the data privacy debate’s push/pull on corporate responsibility and future business models.

    Energy’s Cleaner, More Distributed Future Dealt a Blow

    In January, the European Union relaxed its position on renewable energy by making renewable targets non-binding and removing national accountability. NGOs and some multinationals such as Shell, reacted with concern, worrying that the resulting ambiguity over the future of the EU’s climate policy could lead to a European energy crisis. NGOs and lobby groups have turned to Germany in an effort to convince Chancellor Merkel to take a stronger stance on the continental bloc’s energy future. However, even Germany, often cited as the leader of the EU’s commitment to renewables is accelerating cuts in aid to operators of wind and solar plants and has become the first nation in Europe to charge owners of renewable plants for their use of electricity. The above-mentioned policies have led some like financial journalist John Dizard to wonder if the “policy tide is turning back to the utilities’ favor.” …

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  • World Cup 2.0: When Football Meets Footprint

    12 Jun 2014 – James Wicker

    Image © Juan Tan Kwon via Flickr

    World Cup season is upon us! The global event that football fans around the world have all been awaiting has started. All eyes are on the 32 national teams that will be competing in Brazil for the next five weeks.

    I was 11 years old when my country, France, hosted and won the World Cup in 1998. The national pride when Les Bleus lifted the trophy before the eyes of millions of people around the world was overwhelming. Surely any event driving this much passion globally should never be called into question? But my grown-up self now wonders if all this enthusiasm could be used to drive much needed positive environmental change?

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  • This article originally appeared in Radar Issue 03: What Chance Change? Exploring Sustainable Finance.

    Jessica Fries helps companies integrate sustainability into core business processes and activities. Denise Delaney, based in SustainAbility’s London office, caught up with her on the latest initiatives by A4S and IIRC.

    Denise Delaney: Why establish a CFO Leadership Network?

    Jessica Fries: The CFO Leadership Network is part of The Prince of Wales’s Accounting for Sustainability Project (A4S). A4S’s primary focus is on the role of the finance and accounting community in creating sustainable business models and a sustainability economy. We did some research in 2012, which really highlighted the perception among different groups that CFOs were unconvinced that there was a commercial rationale for integrating sustainability into the running and operation of the business. We had been working with a number of CFOs who felt very strongly that the commercial case was clear and were interested in developing practical ways to integrate sustainability into financial decision-making, understand what others were doing to advance thinking and convince their peers of the imperative to act. The CFO Leadership Network emerged. …

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  • Flick image of step pyramid by Ed Yourdon

    In 2004, the late CK Prahalad, an influential management professor and author, published The Fortune at the Bottom of the Pyramid, a book that urged companies to use a new lens to view the poor. Prahalad advocated for envisioning those at the bottom of the economic pyramid as producers and consumers of products, rather than merely as philanthropic beneficiaries.

    Ten years later, several large companies have adopted Prahalad’s ideas and, in the process, have demonstrated that serving the “base of the pyramid” consumer can make good business sense. I analyzed several of these “base of the pyramid” business models — what we call “Building a Marketplace” — in Model Behavior: 20 Business Model Innovations for Sustainability, a report that I co-wrote and released earlier this year….

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  • This article originally appeared in Radar Issue 03: What Chance Change? Exploring Sustainable Finance.

    As the world’s multinational banks move, lend, invest and protect money for customers and clients in the decades to come, they can play a major role in the context of sustainable development.

    They must for three main reasons. First, they can enable sustainable growth. The unique capabilities of multinational banks, principally the large universal and investment banks, make these entities key enablers in the shift to more equitable distribution of income and the long-term investments needed to support more sustainable development.

    They can also contribute to financial stability. The health of the global economy is inextricably linked with banks’ success. By better managing their own health, banks can contribute to a strong, resilient global economy that protects jobs and livelihoods, avoids collapse in the face of external shocks, and in doing so, provides a platform for more sustainable forms of growth. …

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  • Leo Johnson talking to Rob Cameron at our London office.

    This article originally appeared in Radar Issue 03: What Chance Change? Exploring Sustainable Finance.

    Leo Johnson, a partner in PwC’s Sustainability and Climate Change team, has recently co-authored Turnaround Challenge: Business and the City of the Future, which explores how capitalism can reinvent itself to offer sustainable growth.

    Rob Cameron spent a morning with Leo exploring his views on the wisdom of Hollywood icons, tequila capitalism, jujitsu moves and the parallels between banks and rock ‘n’ roll.

    Rob Cameron: Let’s start with that most British of questions – what do you think of the recent weather here in the UK? I ask because I wonder if it takes this kind of flooding disaster to get politicians to pay attention to the risks of climate change?

    Leo Johnson: We should be so lucky. My take is that major progress won’t result from flooding. If anything my fear with big-time impacts from climate change is that they could bring what they call ‘threat rigidity’, the draw-bridge going up. My optimism comes from a different place than disaster. To me, it’s most simply put by Marilyn Monroe. She said: “Sometimes good things fall apart so that better things can fall into place.”

    This is exactly what Schumpeter was trying to say too. His idea was that there are these waves of ‘creative destruction’ where the technological model that was triumphant starts, as it gets fully deployed across the economy, to burn out and then becomes dysfunctional, creating the space for disruptive technologies to erupt. …

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  • Flickr image by Melissa Wiese

    This interview originally appeared in Radar Issue 03: What Chance Change? Exploring Sustainable Finance.

    Scientific consensus seems to be growing that there is a causal link between excess sugar consumption, rising obesity and Type 2 diabetes and other NCDs. Analogies such as sugar is the new tobacco have grabbed headlines recently alluding to the addictive nature of sugar, and food products such as fizzy drinks are particularly under fire due to the high sugar content that is ingested very quickly.

    Although this isn’t a new issue, in recent months we have seen campaigners, governments and investors increasingly pay attention to the major health and economic costs associated with sugar-related health problems. Last year a report from Credit Suisse’s Research Institute brought into focus the staggering health consequences of sugar. The report revealed that approximately 30%–40% of healthcare expenditures in the USA are attributed to addressing issues closely tied to the excess consumption of sugar. The WHO has published draft guidelines that recommends people halve the amount of sugar in their diet from 10% of total calorie intake a day to a target of 5%. …

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  • Flickr image by clairebear83613

    Which business model innovations have the most promise for sustainability? How are leading companies exploring them? What role can companies play in advancing more sustainable business models?

    These are a few of the questions posed by SustainAbility’s latest think tank work, Model Behavior: 20 Business Model Innovations for Sustainability. In March, we held roundtable events in London and New York with representatives from Barclays, Cisco, Estée Lauder, Ikea, L’Oréal, Mitsubishi and Vodafone, among other organisations. Below are a few of the ideas we discussed. (As we held the discussions under Chatham House Rule, quotes from the discussion included below are edited to provide anonymity.)

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