Global Trends & Opportunities

2016 and Beyond

For our annual trends outlook, we reviewed our own ongoing issue tracking and interviewed two dozen global sustainability experts on their expectations for 2016 and beyond, honing in on key issues and opportunities that will define the field, and on signals for companies and others to watch.

State of Play:
Momentum, Ambition
and Pressure

New certainty...

By all accounts, 2015 was a pivotal year in sustainable development. From adoption of the Paris Agreement and the UN Sustainable Development Goals (SDGs), the year that started with uncertainty and anticipation culminated in historical achievements and hope that the international community is finally uniting in pursuit of ambitious, long-term solutions to our most significant challenges. Among key leaders in business, government and civil society, there is growing consensus and a new feeling of certainty about the future direction of climate action and the need for more systemic responses to poverty, inequality, resource scarcity and other linked issues. The conversation is no longer about the direction and the ultimate destination – instead, it is now about the best way to achieve the goals and the speed at which it can be done.

The trajectory is clear now in a way that wasn’t 12 months ago.

Seb Beloe, WHEB Asset Management

This time last year we were in a lot more uncertainty in terms of consensus on the adequate level of ambition. We now have consensus on limiting warming to under 2oC and moving towards a decarbonized economy.

Kitty van der Heijden,
World Resources Institute

On Convergence
of Agendas

“We are witnessing the convergence of the sustainability and current affairs agendas. For many years, it seemed like we advocated for sustainability, while the rest of the world focused on something else. Now the issues that we care about are in the mainstream – strange bedfellows are not only dating, they are cohabiting.
“However, the delivery of sustainability is not yet in the mainstream. We have only a limited number of poster-child companies. For the majority of other businesses, while they have great people, sustainability has yet to touch their day-to-day activities and operations.
rob

Rob Cameron,
Chief Executive, SustainAbility

Yet also increasing complexity…

However, the feeling of certainty and consensus is evolving in parallel with the sense of rapidly growing complexity of the global business environment and the sustainability field. As the global affairs and sustainability agendas become increasingly interconnected, a growing array of issues – from falling oil prices, terrorist threats and geopolitical instability to rising inequality, enduring corruption and the migrant crisis – pose increasing risks for business and sustainability alike, underscoring the need for more collaboration and systemic responses.

The issues that companies need to consider are multiplying fast: climate change, energy, water and other pressures are reinforcing each other. In 2016, companies will be more aware that this complexity undermines the success of their corporate commitments to sustainability. Now more than ever it is necessary for CEOs to step back and understand the bigger picture.

Alejandro Litovsky, Earth Security Group

And further pressure on capitalism and companies to redefine their role…

Increasing awareness and concern about this confluence of issues is putting further pressure on companies and global capitalism as a whole to respond. New efforts are emerging to redefine capitalism in order to better serve society’s needs, and many companies are working to embed and activate greater purpose in their brands. According to a recent CEO survey of global companies, 24% of companies have recently changed their organizational purpose in response to stakeholder expectations and a further 12% are considering doing so in the near future.

People are becoming increasingly suspicious of our present form of capitalism, which appears ill-equipped to deal with the issues of our day. We need to reexamine it and start talking about multiple forms of capitalism.

Andy Hoffman, University of Michigan

In Pursuit of the Broader Notion
of Corporate Accountability

“While climate change is the greatest environmental sustainability challenge of our times, its urgency is sometimes so encompassing as to allow companies to ignore or defer – often with at least the tacit permission of stakeholders – broader social and economic issues like equity and ethics.
Climate (and water, resource scarcity, biodiversity and other environmental issues) stands forefront as we grapple with today's sustainability agenda. But considering the power of racial justice campaigns and protests in the US; the recent resonance of questions about gender equity and violence against women being raised in workplaces and communities; and the ways recent terrorist attacks and the migrant crisis have escalated tensions related to religion, immigration and inclusion, we need a broader notion of corporate accountability.”
mark

Mark Lee,
Executive Director, SustainAbility

Key Signals to Watch

pic_01

The Only Thing That’s Certain Is Uncertainty

Geopolitical, economic and social instability will shape the global business and sustainability landscape in profound ways in 2016.

The threat of global economic slowdown, the continuing threat of terrorism, the migrant crisis, corruption scandals, deepening inequality within societies and between developing and developed nations, and continuing fluctuation in oil prices and currencies will continue to generate global political and economic turmoil that will powerfully influence business performance and sustainable development progress.

  • Over 74% of global business leaders – a record high – currently cite geopolitical instability as a major risk to business.
  • The global community is currently facing more intra-, inter-, and extra-state conflict than any point since World War II, according to Eurasia Group, with the rise of ISIS and instability in the Middle East being top risks. Geopolitical uncertainty is further compounded by the weakening of Euro-Atlantic alliance, emerging conflict between closed Europe and open Europe and economic slowdown in Brazil.
  • Falling oil prices are likely to impact investment in renewable energy, while the continuing migrant crisis in Europe and economic slowdown in emerging markets have the potential to divert much-needed attention from other social and environmental issues, including follow-up on COP21.
The cost of the refugee crisis in Europe is huge -- how do we balance homes with funding for renewable energy? How do we deal with the massive influxes of migrants and provide sustainable and decent living conditions for them? When you look at the scale of these humanitarian challenges, everything else is second tier of importance.

Julia Harrison, FTI Consulting

pic_02

Energy and Climate at the Core

Climate change and energy issues will remain at the core of the sustainability agenda, with increasing attention to the practical challenges of implementing the Paris Agreement.

As highlighted at the World Economic Forum in Davos in January, global leaders now perceive the failure to mitigate and adapt to climate change as the top risk. Key aspects of the implementation agenda will include scaling of renewable energy, securing funding for low-carbon initiatives and introducing robust new carbon policies.

  • Efforts to rapidly expand carbon pricing, which currently covers close to 25% of the world’s emissions, will play a key role at both national and regional levels.
  • China is set to launch its national emissions trading scheme in 2017 and is currently working with the UK government to make it compatible with the equivalent scheme in the EU.
  • In North America, the U.S. EPA’s Clean Power Plan will continue to reshape the utility industry. Authorities will seek to build on the success of current regional cap-and-trade and carbon tax systems, and to replicate them elsewhere.
  • The growing divestment movement and broader disruptions in energy markets will keep the coal industry on a downward trajectory and put further pressure on oil and gas companies to articulate their place in a low-carbon future.
Coal is increasingly a dead industry. In emerging economies less so, but even there, the writing is on the wall.

Seb Beloe, WHEB Asset
Management

International oil and gas companies are struggling to find a credible voice on climate change. In 2016, the pressure of the low price of oil will make life harder for these companies. Besides advocating for a carbon price, now is the time to demonstrate that they will be relevant in a future that is based on renewable energy. This requires taking a chunk of capital investment and putting it into solar and wind power.

Alejandro Litovsky,
Earth Security Group

pic_03

SDGs, Inequality Will Shape Social Agenda

Inequality and implementation of the SDGs will be the dominant social themes of the sustainability agenda in 2016.

We will also see new areas for action on social sustainability including the nexus of climate change and inequality, and growing impacts of the refugee crisis in the Middle East and Europe.

  • The SDGs provide a unique opportunity for companies to tackle environmental, social and economic issues in an integrated way, increasing potential for deeper systemic impact. The UN and Unilever CEO Paul Polman recently launched the Global Commission on Business and Sustainable Development, which will work over the next 12 months to amplify the economic case for businesses to engage in achieving the SDGs.
  • While the issue of inequality has escalated in recent years, with the growing number of political and business leaders expressing concern, it has not translated into concrete results. According to Oxfam, the wealth of the poorest half of the world’s population has fallen by 38% since 2010.
  • Emergence of initiatives like Coalition for Inclusive Capitalism and Conscious Capitalism add further pressure on capitalism to solve escalating social and environmental issues, but also signal growing effort to redefine it in order to better serve society’s needs.
  • The nexus of energy and inequality will gain greater prominence in 2016, with affordable renewable energy in the spotlight as the world’s poor in both developed and developing nations are increasingly left with dirty, unreliable energy systems as wealthier communities move to clean energy options such as decentralized solar.
I think in 2016 the sustainability agenda will become more focused on the parts of the economy that aren’t delivering safer, greener wealth for developing economies around the world.

Seb Beloe,
WHEB Asset Management

South Africa provides a crystal ball which illustrates to the developed world what happens when inequality gets out of hand. We’re experiencing the converging impacts of climate change, migration, xenophobia and poverty. The environmental and social problems we are facing are so entwined.

Gary Kendall, Member of SustainAbility Council

pic_04

(Further) Rise of Subnational Players

Cities and regions will come further into the spotlight as critical players in implementation of the Paris Agreement and SDGs.

From phasing out fossil fuels to making new investments in green infrastructure and modern transportation networks, funding welfare initiatives and introducing anti-poverty measures, cities and local governments are often pioneers of new solutions and key partners for businesses looking to spearhead sustainability initiatives. While the COP21 and SDG commitments were made principally by nations, there will be a critical role for cities, regions and states to shape and implement new policies and solutions that will make these goals possible.

  • We are likely to see a growing number of alliances similar to The Covenant of Mayors, which unites thousands of local and regional authorities in Europe, the Mediterranean region and Central Asia, and recently announced a pledge to reduce greenhouse gas emissions 40% by 2030.
  • Mayors of some of the world’s largest cities joined the Campaign for an Urban SDG, which led to the adoption of Goal 11 on sustainable cities, but they will also play key roles on many other SDGs including those on poverty elimination, gender equality and employment.
  • Mayors and governors from around the world have launched the Urban Partnership for the Sustainable Development Goals and new efforts are under way to improve data collection at subnational levels, which will be key to catalyzing further progress.
Subnational participation in the implementation of international agreements will be an important theme in 2016. So far the climate and SDG conversation has put the entire burden on national governments to deliver outcomes. But many benefits can be achieved at the level of cities and regions.

Stefanos Fotiou, UN-ESCAP

pic_05

Finance Is Fundamental

Momentum for the reform of the global financial system is building.

Adoption of the Paris Agreement and SDGs, the success of which will be heavily dependent on mobilizing sufficient capital, has added further urgency to efforts to seek greater alignment of global capital flows and sustainable development priorities. While some positive signals are emerging, a more systemic and wide-reaching reform will be required to enable successful transition to a low-carbon, inclusive economy.

  • Implementation of the Paris Agreement will require an estimated $12.1 trillion in financing over the next quarter century, which is 75% more than currently projected investments, and substantial funding will also be needed for other sustainable development goals.
  • Redirecting even a fraction of global financial assets toward sustainable development would make a big difference. One positive signal has been continued growth of investments in green bonds, which reached $41.8 billion in 2015, with London becoming a global hub and Chinese banks starting to issue green bonds.
  • Some banks and investment funds are also taking action – e.g., the New York State retirement fund and Goldman Sachs recently launched a $2 billion low-carbon fund, and a few big banks are doubling down on their commitments to green financing.
  • Meanwhile, high-profile efforts such as the UNEP Inquiry for Design of a Sustainable Financial System are bringing added attention and engagement by governments, multilateral organizations and civil society.
Strong signals from the finance industry will be crucial for progress, and we will see financiers having a far greater impact on sustainability over the next 10 years. Perceptions of risks are changing and carbon intensive industries are already seen as riskier.

Clarissa Lins, Catavento

If there is one sector we should ask more from it’s the finance sector. If banks started using serious sustainability criteria in terms of how they evaluate loans and combine their portfolios, many changes would follow.

Stefanos Fotiou, UN-ESCAP

pic_06

More Transparency Please

The aftermath of COP21, a wave of global corruption scandals and the Volkswagen emissions fraud mean transparency is as critical as ever, and we still have a long way to go.

Continuing breaches of public trust by corporations and governments have underlined the fundamental role of transparency. Meanwhile, as tools for tracing materials and measuring performance in increasingly complex supply chains become more sophisticated, expectations for companies to improve both their transparency and sustainability performance is mounting.

  • In the aftermath of the VW scandal, astute investors and consumers are calling for a more accountable and transparent approach to reporting.
  • Following COP21, there is increased pressure for companies to expand the comprehensiveness of their climate data reporting. A new global task force under the chairmanship of Michael Bloomberg will develop guidelines for companies to use when disclosing climate-related risks to lenders, insurers and investors.
  • In a case that could become a bellwether for the energy industry, New York Attorney General Eric Schneiderman recently launched an investigation into whether ExxonMobil provided adequate information to the public and investors about its climate risks.
  • As transparency tools and technologies improve, including the advent of supplier certification aggregators such as Ecovadis and real-time worker feedback systems such as LaborLink, there is both the opportunity and imperative for companies to peer ever deeper into, and take action to further improve, their supply chains.
Readers of reports are likely to be more probing and skeptical in the aftermath of the Volkswagen scandal. Storytelling by companies will need to be effective, upfront and balanced. Readers do not want the extra work of poking around in an annual report looking for the right data.

Pat Dwyer,
The Purpose Business

A lot of companies are making public commitments and setting specific targets on climate. Being clear and consistent about reporting on those goals is incredibly important. We are seeing increased external pressure for much more accountability.

Suzanne Apple, WWF

pic_07

New Focus and Pressure on Human Rights

New regulations and guidelines will compel companies to demonstrate they are actively addressing and remedying human rights in their operations and supply chains.

A slew of new guidelines and regulatory requirements are bringing increasing sophistication to reporting and remediation of human rights.

  • The UK’s Modern Slavery Act requires that companies with over £36 million in global turnover publish annual statements demonstrating they have taken action to prevent slavery and human trafficking in their operations and supply chains.
  • The EU Non-Financial Reporting Directive will be implemented across the 28 Member States during 2016, with reporting by companies due to begin in 2017. The Directive requires public companies with more than 500 employees to report information on their human rights policies, risks management, due diligence and key performance indicators.
  • A growing number of companies (Unilever, Ericsson, Nestlé and others) are voluntarily adopting the UN Guiding Principles Reporting Framework. In 2015, Unilever was the first company to produce a standalone report using the Framework.
  • Finally, the ILO Forced Labour Protocol is set to take effect in November 2016, requiring governments and businesses to actively prevent forced labour, protect workers and provide remedy for victims.
In recent months we have seen several important steps being taken to improve human rights disclosure. All of these initiatives expect companies to report on actual impacts and actions taken, not just overall company processes and engagement tactics. This is an important change.

Beth Holzman,
Business and Human Rights Advisor

Corruption is a key factor contributing to corporate-related human rights abuse and a major barrier to accessing suitable remedy mechanisms for victims.

Sumi Dhanarajan,
National University of Singapore

pic_08

How Far and How Fast for Renewables?

Investments in renewable energy are set for further rapid growth, but much more effort is needed to truly displace fossil fuels.

Last year saw the largest ever annual investment in renewable energy, with $329 billion invested in wind, solar, and biomass globally. Yet this expenditure remains eclipsed by continued subsidies of the fossil fuel industry, estimated to have totaled over $5.3 trillion in 2015. Governments will need to reevaluate continued investment in fossil fuels against the need for more aggressive investment in deployment of renewable energy if they are to meet COP21 pledges and global warming is to be kept under 2oC.

  • A positive example of recent government commitments is the Solar Alliance announced by India and France, which seeks to bring together 121 countries in a global effort to increase the use solar energy in developing countries and move away from fossil fuels. The joint effort will see €1,200 billion invested in solar energy over the next five years.
  • The rise of rooftop solar in the US, Europe, Australia, Japan, China and India is forcing utility companies to rethink existing business models, as distributed renewable energy continues to threaten their financial viability.
  • The recent dramatic investments by tech companies such as Google, Apple, Facebook, Microsoft and Amazon, as well as by a small number of non-tech multinationals, will need to be expanded across Fortune 500 companies in order to reach a scale sufficient to meet global climate change commitments.
Over the next few years, we are going to see a much more rapid transition of renewable energy to commercial market scale, with significant investments flowing into renewable energy from technology companies – in a way that we haven’t seen before. We will see many new disruptive players coming in.

Julia Harrison, FTI Consulting

pic_09

Linking Climate Change to Human Health

Public health impacts are becoming an important dimension
of the effort to combat climate change.

Governments and NGOs are increasingly utilizing health as a lever to motivate corporate action on climate-related issues. Health challenges range from injuries and premature deaths related to extreme weather events, to water and food supply impacts, and the spread of tropical diseases such as the Zika virus, which is expected to proliferate throughout Latin America and the US in 2016.

  • Health and the environment gained greater prominence as a topic in 2015, with the Obama administration increasingly framing climate impacts in terms of public health and China’s air pollution crisis mobilizing millions.
  • Community solar and wind initiatives are increasingly being recognized for their health benefits, with a Harvard University study published in late 2015 finding that wind and solar energy systems in the US were responsible for millions of dollars in regional health benefits, reducing disease and premature deaths.
  • The Obama administration recently announced a moratorium on new coal leases on public land. This move is likely to lead to a closer examination of the social costs of coal, especially its impact on climate change and public health, which will be factored into the costs of new leases.
  • The next UN Environmental Assembly, in May 2016, will make health and the environment a key focus, a further testament to the growing attention for issues at the nexus of climate change and public health.
Issues at the nexus of health and the environment are now on the agenda of a lot of governments, as well as the United Nations. They are becoming increasingly important topics for citizens globally.

Stefanos Fotiou, UN-ESCAP

pic_10

Sustainability, Our Way

In developing economies, localized, internally focused sustainability models are emerging, as local businesses work to fill the void left by inadequate public services and infrastructure.

While environmental and climate change-related issues tend to dominate the sustainability agenda of many companies in North America and Europe, local enterprises in Latin America, the Middle East, Africa and Asia strive for a greater balance between environmental and social aspects. Many local companies are determined to do sustainability their way, adopting innovative models that deviate from the standard approaches of Western companies and multinational corporations.

  • This localized, unique sustainability agenda is often spearheaded by start-ups and social entrepreneurs that are emerging in high-poverty communities addressing a wide range of issues, including unemployment, local energy access, transport, education and skills training, health, and food and water security.
  • Examples of companies employing localized solutions include Sarvajal, an Indian company that has developed solar-powered 'water ATMs' that provide clean, low-cost water to people in remote parts of India, and Recycle Beirut, a social enterprise that employs underprivileged residents in recycling operations in Lebanon.
  • Reverse innovation, when sustainability solutions originating in emerging economies are adopted by Western peers, is becoming increasingly common.
An important feature of the sustainability landscape in the Middle East and North Africa is the development of a very active entrepreneurship scene in Lebanon, Egypt and Tunisia, with startups working on alternative energy solutions and technologies for better governance and improvement of public services among other issues.

Gilbert Doumit,
Beyond Reform & Development

In Asia we’ve seen a growing number of small businesses focusing on social entrepreneurship and increasing innovation coming out of marginalized populations. They very much advocate for the idea of ‘doing social responsibility our way’ and focusing on what is material to them – their local issues and not necessarily adopting Western or large corporate models.’

Pat Dwyer,
The Purpose Business

pic_11

Prepare to Be Disrupted

New technologies and business models will continue to reshuffle numerous industries, bringing new benefits and risks to consumers and corporations alike.

The influence of disruptors is rapidly accelerating, driving incumbents to innovate or risk obsolescence. The continued rise of peer-to-peer services, increased investment in renewable technologies and further evolution of smart factory solutions will be areas to watch in 2016. However, not all of these emerging technologies have sustainability as their goal and critics question to what extent some of the emerging services in developed economies actually improve the lives of their customers and the communities where they’re offered.

  • The influence of disruptors on the finance sector is especially pronounced in developing markets where banks currently fail to meet the needs of the majority of the population. Chinese juggernauts Alibaba, Tencent and Baidu are leading the way in new finance with innovative business models that integrate multiple services for a seamless user experience.
  • Billionaires Bill Gates, Mark Zuckerberg and Richard Branson are amongst a group of high-profile entrepreneurs behind the recent launch of the Breakthrough Energy Coalition, which will invest in early stage clean energy companies.
  • Big data, the Internet of Things, 3D printing, and robotics will continue transforming energy and production systems. The competition for the most advanced smart factory solutions will intensify, with Germany’s Industrie 4.0, China’s Internet Plus and Japan’s Industrial Value Chain Initiative all vying for pre-eminence.
The banking system is on the cusp of disruption. Financial services have lost sight of their social purpose, and non-traditional providers of finance such as peer-to-peer lenders are really taking off.

Gary Kendall, Member of SustainAbility Council

New technology and peer-to-peer lending means banks risk becoming obsolete. They are under growing pressure to redefine their role in society and the economy.

Hendrik-Jan Laseur,
Lead the Change

It seems too much of the talent in Silicon Valley is focused on lifestyle issues and not enough on the application of technology to address genuine social and economic challenges. And while they have begun a conversation on diversity in their own organizations, are they feeding the too-busy economy without solving any of the root causes affecting work/life balance for working families?

Mark Lee, SustainAbility

pic_01

Getting Smarter on Water

As the global water crisis deepens, a growing number of companies are deploying sophisticated solutions, but the majority are still lagging in water management.

Companies and utilities are increasingly focusing on water data collection, smart sensors and the Internet of Things to better manage water use and reduce risks in supply chains, whilst governments are increasing investment in costly water infrastructure and new policy measures to reduce consumption.

  • Global Water Report 2015 published by CDP estimates that 53% of over 400 surveyed companies who are currently operating in water-vulnerable industry sectors are failing to conduct a comprehensive risk assessment on water security. However, companies are increasingly investing in more sophisticated data management to improve efficiency.
  • The number of companies that have begun setting ambitious global goals in response to water risk is still very small, with only eight companies making it to CDP’s top ranking for water management.
  • Many governments are prioritizing investment in large-scale, supply-side solutions such as costly desalination plants.
  • Collaborative approaches to water management by industry, such as Connect the Drops in California, will be key to creating integrated, context-specific regional approaches that address long-term population and industry needs, whilst taking into account inherent resource limitations and long-term climate trends.
We’re seeing more sophisticated data management having major impacts on water oversight and decision-making. 21 of the world’s 37 largest aquifers have passed their sustainability tipping point, which is terrifying. Water is one of those issues where it’s difficult to get anything significant and long-term done without policy. That’s why I am so glad to see the formation of coalitions, such as Connect the Drops, helping to drive momentum in policy change.

Mark Lee, SustainAbility

5 Opportunities for
Corporate Leadership

How should companies make sense of the increasingly complex sustainability landscape? How can corporate leaders spend less time reacting to risks and more time capitalizing on opportunities? We hope that the five messages below will inspire business leaders for action and greater impact.

Putting Goals Into Action

Many companies have announced or are in the process of establishing ambitious sustainability goals, but implementation will increasingly set true leaders apart. With the adoption of the Paris Agreement and SDGs, there is no shortage of frameworks and guidance encouraging companies to set long-term goals. More companies should strive to be adopting – and achieving – science-based targets and net positive goals. Moving to 100% renewable energy will be crucial, but climate change adaptation initiatives will be equally important, especially for companies with resource-intensive supply chains.

In 2016, a key measure of corporate leadership will be to demonstrate how to move from ambitious goals to ambitious implementation. If you look at the scale of some of the corporate commitments, like zero deforestation in global commodity supply chains, you quickly see how this is going to be more complicated than companies have anticipated and require a more proactive stakeholder engagement process.

Alejandro Litovsky, Earth Security Group

For future corporate leaders, it will be important to plan for both mitigation and adaptation. Going forward we are increasingly going to be dealing with the onset of climate change that we can’t prevent.

Diana Liverman,
University of Arizona

Advancing the Social Agenda and
Implementation of SDGs

Environmental goals have long been at the center of many companies’ sustainability strategies, often displacing or overshadowing social issues. Questions around inclusion, gender equality, the widening income gap and racial justice deserve more attention and must be addressed by the private sector in more comprehensive and ambitious ways. The SDGs present unique opportunities for companies to integrate their sustainability goals with the broader sustainable development agenda. Particularly in emerging economies, the private sector is in a rare position to align the business opportunity with broader social goals such as raising living standards and helping close the gap between developing and developed countries.

Companies should be aligning their goals with subsets of the SDGs, which reflect their material issues including climate change, energy, water, education and poverty. The private sector needs to look at developing economies in a much more positive way and remember that they present the largest growth market in the world.

Kitty van der Heijden, World Resources Institute

Will We See the Rise of
Compassionate Capitalism?

“We’re used to living in an era of change, but we’re now in a change of era. That said, I am optimistic and believe in the better side of humanity coming through. We would all like to know what will define leadership in the future. I am interested in the possibility of ‘compassion’ coming to the fore. Is there even such a thing as compassionate capitalism? I think this is a conversation we need to start having.”
rob

Rob Cameron,
Chief Executive, SustainAbility

Transforming Legacy Industries

The speed at which the classic, legacy industries transform and adopt new business models will be among the key factors that determine the success of the global transition to a low-carbon economy. To date, many breakthroughs and innovations have come from start-ups and disruptors that have led the charge to redefine business as usual. While traditional energy companies already face huge pressure to reinvent their business model and reduce their climate impact, incumbents from all industries – from the financial sector to automotive and chemicals – will have to rise to the challenge and find new ways of doing business in a climate-constrained world.

We need to move on from protecting legacy fossil fuel industries. We need to shift the focus away from mitigating risk and onto breakthroughs in technologies and innovation. It’s a much more positive, enabling, and upbeat conversation.

Seb Beloe, WHEB Asset Management

Changing Consumption Patterns

Companies have a crucial role to play in changing consumer behavior and encouraging responsible consumption. Pushing the boundaries of the circular economy and rethinking waste in terms of the entire value chain will be important, with food waste presenting a unique opportunity to save resources and reduce greenhouse gas emissions. If millennials hold on to their values as they age, we are likely to see an inflection point with the preferences of this age group fundamentally challenging current consumption patterns and forcing companies to respond.

Addressing food loss and waste is a hugely important issue. An estimated 32% of all food produced in the world is lost or wasted from farm to fork – causing about $750 billion per year in economic losses, and requiring cropland area the size of China. Addressing that would help save 7-8% of greenhouse gas emissions and 25% of water use.

Kitty van der Heijden, World Resources Institute

We need to see many more companies and organizations working together towards better consumer behavior. Brands must do their best to brand the difference.

Pablo Benavides,
Independent Consultant

Pioneering Beneficial Technology

The role of technology and innovation in shaping progress on sustainable development will remain paramount. From cost-effective renewable technologies to new energy efficiency measures, the Internet of Things, robotics and big data, technology holds more promise than ever to deliver meaningful environmental, social and economic change. Though technological innovation does not always lead to positive outcomes, so long as we effectively manage the risks, it will continue to push the boundaries of what is possible.

Breakthroughs will come from surprising places. It is very likely that companies like Google will come up with big energy breakthroughs before an energy company does.

Niel Golightly, Shell Oil Company

Technology will surprise people. I don’t think we realize how disruptive some of the new emerging technologies are. We’re going to see big shifts happen in the
next five years.

Seb Beloe,
WHEB Asset Management

Authors

Contributors

Interviewed Experts

Suzanne Apple, Senior Vice President, Private Sector Engagement, WWF, USA (recently retired)

Seb Beloe, Partner and Head of Research, WHEB Asset Management, Member of SustainAbility Council, UK

Pablo Benavides, Independent Consultant and Thinking Partner in Sustainable Communication, Argentina

Lora Cecere, Founder and CEO of Supply Chain Insights, USA

Chris Coulter, Co-CEO, GlobeScan, Member of SustainAbility Council, Canada

Sumi Dhanarajan, Associate, Centre for Asian Legal Studies, Faculty of Law, National University of Singapore, Member of SustainAbility Council, Singapore

Gilbert Doumit, Managing Partner at Beyond Reform & Development, Lebanon

Pat Dwyer, Founder and Director, The Purpose Business, Hong Kong

Stefanos Fotiou, Director, Environment and Development Division, United Nations Economic and Social Commission for Asia and the Pacific, Thailand

Niel Golightly, VP External Relations, Shell Oil Company, Member of SustainAbility Council, USA

Julia Harrison, Senior Managing Director and Managing Partner Brussels, FTI Consulting, Member of SustainAbility Board, Belgium

Kitty van der Heijden, Europe Director, World Resources Institute, The Netherlands

Andy Hoffman, Holcim (US) Professor of Sustainable Enterprise, University of Michigan,
Member of SustainAbility Council, USA

Beth Holzman, Business and Human Rights Advisor, USA

Gary Kendall, Sustainability and Strategy Specialist, Member of SustainAbility Council, South Africa

Hendrik-Jan Laseur, Lead the Change, Member of SustainAbility Council, The Netherlands

Clarissa Lins, Founding Partner, Catavento, Member of SustainAbility Council, Brazil

Alejandro Litovsky, Founder & Chief Executive, Earth Security Group, UK

Diana Liverman, Director, Institute of the Environment, University of Arizona, Member of SustainAbility Council, USA/UK

Kavita Prakash-Mani, Executive Director, Grow Asia, Member of SustainAbility Council, Singapore