Companies face a paradox. They are increasingly expected to take responsibility for their social, environmental and economic impacts, yet they cannot directly control many of them, whether due to impacts falling upstream or downstream in their value chain, or due to their systemic nature.
As a result, corporate engagement with external stakeholders designed to address societal challenges has increased by leaps and bounds in recent years. Business leaders now recognize the importance of not just connections but deeper collaboration with others to drive progress on common objectives.
The COVID-19 pandemic has demonstrated the power of collaboration across and between government, the private sector and civil society. We have seen the positive impacts of coordinated and consistent responses to the pandemic – and what happens when such coordination is lacking. At a deeper level, COVID-19 has shown how reliant we are on each other for our collective health and wellbeing.
As ERM’s CEO Keryn James noted in a recent article, the pandemic is “simply a foretaste of the kind of disruption and devastation the world will experience if we do not address the state of the global commons – including climate change, biodiversity and nature loss, and inequality.”
Considering that context, this article explores the remarkable power of networks to accelerate progress on sustainable development – and why we may not be able to meet the greatest societal and planetary challenges without such cooperation.
Collaboration drives system change
Bringing companies, academia, government, civil society and other groups together to deliver on a common purpose is a powerful recipe for holistic thinking. We need diversity of perspectives to develop new solutions to seemingly intractable problems. Each participant in a collaboration brings unique expertise, skills and resources. When such collaboration is well-orchestrated, its potential to address systemic challenges can be remarkable. One past example that helped prove the power of collaboration to drive system change is the Zero Discharge of Hazardous Chemicals Roadmap to Zero Programme, in which brands, manufacturers, chemical companies, NGOs and others across the entire apparel and footwear value chain worked together to successfully eliminate 11 substances harmful to consumers, workers and the environment. Other more recent examples are focusing on bringing stakeholders together to drive the circular economy, such as initiatives emerging from Next Wave plastics and the Closed Loop Fund.
Collaboration research conducted on behalf of the SustainAbility Transparency Network (STN) and due to be published in December will highlight trends and best practices for corporate practitioners. A key theme of the research is that companies are being more selective and strategic when it comes to collaborations. As one corporate interviewee put it, “Our approach has changed. We have evolved away from general participation to being a specific piece of the puzzle. We have gotten smart at staying in our lane of expertise. It’s not a limiter -- it’s a smart move.” Such companies know collaboration drives system change and are making choices that enable that.
Recognizing interconnections among various issues we face – be it jobs and climate, or inequality and health – is essential for designing smart shifts to systems that maximize the outcomes for all without creating unintentional consequences. Our STN research unearthed a pattern of collaborations looking for win-win solutions and stretching to consider issues beyond their original focus. For instance, Field to Market, a well-established multi-stakeholder collaboration driving sustainability in the food system, is sharing how it plans to use its unique levers to drive racial justice, for example via proactive partnerships with organizations representing Black farmers. In a very different example, we’ve seen the Vietnamese conglomerate Hanwha Group collaborate with national and city governments and a local NGO to replace diesel boats with solar-powered ones to clean up trash on the Mekong River. This allows garbage collection to proceed without diesel leaks or CO2 emissions, and with less noise, thus limiting disturbance on local wildlife. We need more of this kind of thinking to create multidimensional solutions.
The COVID-19 pandemic and resulting economic recession have sparked a wave of calls from the private sector and beyond to “build back better” through collaboration, underlining the need to redesign our systems to be more sustainable by working together. The Organisation for Economic Co-operation and Development, itself a collaboration, issued a Building Back Better policy brief for governments, which is peppered throughout with calls for partnership. Examples include governments working with car manufacturers to provide aid that is contingent on accelerating shifts to efficient and electric cars, and strengthening the ability of public finance institutions to co-invest with private investors to build resilience. In the same spirit, the Industrial Innovation Initiative, a coalition of key industrial and power companies, environmental and labor organizations and state officials from Midwestern and Gulf Coast states, submitted a letter to Congress with “recommendations [that] focus on fostering recovery from COVID-19 through federal investments that spur economic activity and create and maintain jobs in the near term, while putting American industry on a longer term path to deep emissions reductions, high-wage jobs, technology leadership and economic competitiveness.” The pandemic is a prime example of system disruption, and an enormous opportunity to collectively recalibrate our economy and society.
Peer networks accelerate action
Sustainability practitioners are famously collaborative. Though their companies are often competitors in the market, change-makers inside businesses often work together on challenges such as water stewardship and human rights. As long as practitioners do not violate antitrust laws or confidentiality, they can share what's worked and what hasn’t in their company’s journey towards sustainability. Every business and every practitioner has something to teach and something to learn. The urgency of our collective challenges means that we must accelerate action by helping each other. It is also in companies’ self-interest to share non-competitive information; industry reputations tend to be closely tied, so all companies fall victim to the performance of the worst performer.
We’ve seen many examples of successful corporate coalitions and peer initiatives driving meaningful change also. Industry groups such as IPIECA, the global oil and gas industry association for advancing environmental and social performance, enables leaders to agree ‘what good looks like’ for their sector so that they can all move towards that common vision. Cross-sector and issue-specific groups such as We Mean Business raise the bar for leadership and send a signal that the private sector is not only acting on climate, but also that it expects government and other stakeholders to act as well, moving all of society along.
At ERM, we build opportunities for peer-to-peer collaboration. The networks housed in our SustainAbility Institute provide sustainability professionals with the means to connect with fellow practitioners who share the same focus, pain points and opportunities.
- The SustainAbility Transparency Network lets corporate sustainability practitioners keep abreast of insights and best practices on reporting, disclosure, stakeholder engagement and accountability.
- The ESG Ratings Working Group helps practitioners to navigate the complex ESG ratings ecosystem and influence ratings firms to improve approaches to company assessments.
- The Collective is an intimate network of senior leaders who seek to catalyze greater collective action in the transition to sustainability.
All three networks share the ambition of speeding the integration of sustainability into business. Members build trust and are able to speak candidly about their challenges, share practical lessons and collectively brainstorm new solutions. Sustainability governance is one common topic of discussion: members share strengths and weaknesses of their companies’ approaches in a safe space, helping each other increase executive and Board accountability for sustainability issues. How to engage investors on ESG is another theme that members have helped each other navigate through network discussions.
Collaborative peer initiatives focused on sustainability are, by their nature, acts of systems change. They seek to shift the status quo by moving best practice within an industry, or even across the entire private sector.
There is wisdom in crowds
Including voices from outside the private sector can enhance and accelerate collaboration and systems change. Enabling a wide range of stakeholders to share ideas for improvements to systems is essential to finding the best solutions. OpenIdeo has been a leader is crowdsourcing ideas to address systemic challenges. A recent OpenIdeo challenge featuring sponsors from business, academia, NGO and multilateral institution sectors generated ideas designed to let low- and middle-income families in the Global South stay healthy while maintaining their livelihoods during the COVID-19 pandemic.
Technology helps tap collective insights. We’ve seen innovative platforms harness digital solutions to enable pooling of expertise. GlobeScan's Collaboration Forum platform enables real-time, online dialogues with hundreds of stakeholders – for example, GlobeScan recently hosted a series on catalyzing action on the UN Sustainable Development Goals. We expect to see technology harnessed more for collaboration as we further increase the digitalization of how we work, learn and live.
Our 2020 STN research found corporate practitioners believe that being part of collaborations is a valuable way to engage and work with stakeholders. Corporate leaders increasingly recognize that strong business strategy requires looking externally and listening to what consumers, suppliers, policymakers, advocacy groups and others expect. As we called out in our 2018 report Common Threads: Designing Impactful Engagement, stakeholder engagement helps to protect license to operate, anticipate risk and improve problem-solving and decision-making.
Finally, how we draw on the wisdom of the crowd, and who is included in the crowd, is itself evolving. We’re seeing new approaches where just the act of sharing data can lead to better informed decisions, such as through the website Purple Air, which enables users to share data from their air quality sensors and to see the readings of others, a valuable tool for anyone living in areas with high risk of smog or wildfire smoke. We’re seeing fascinating experiments like the inclusion of fiction writers in efforts to describe planetary climate impacts. Arizona State University runs the Imagination and Climate Futures Initiative, which focuses on the genre of climate fiction (known as “CliFi”) emerging in the space between art, science and political decision-making. Additionally, next year, COP26 will feature a “climate imagination session,” which will draw on the science of climate change but also the creativity of science fiction writers to better and more vividly predict possible climate futures.
We must ramp up for the decade of action
We’ve seen in the first year of the decade of action 2020-2030 that systemic threats are real and immediate. As daunting as this year has been, more challenges lie ahead. In The Future We Choose: Surviving the Climate Crisis, Christiana Figueres and Tom Rivett-Carnac issue a clarion call for collaboration to not just avoid the worst of climate change, but to co-create a thriving society and planet. Our own recent research on long-term business resilience, conducted jointly with the World Business Council on Sustainable Development, found, “Further engagement, discussion and collaboration in the private sector and with stakeholders will be critical to deepening collective insights and understanding the keys to building truly resilient organizations and systems.”
It has been encouraging to see the amount and degree of innovation in collaboration that has emerged in response to the developments of 2020. Some established collaborations adapted and grew, while others emerged overnight to help address COVID-19. Overcoming all that will occur through 2030 will require still more skill and greater scale to be part of the ways we work together.
The SustainAbility Institute by ERM, through our peer networks, stakeholder convenings and research, is ready to harness the power of collaboration in ways that help drive progress on planetary and societal challenges. A collaborative mindset requires humility, curiosity and optimism. We pledge to bring that mentality to all that we deliver through this new platform and look forward to working with you as society charts its collective path in this decade of action.