Accelerating Sustainability in Business

Call me optimistic, but the sea change in corporate sustainability seems to be gaining momentum.

Hurricane Sandy is the prime example of an event that drew attention to the perils of climate change.
But there are other, less obvious events of 2012 that are driving this sea change.

The Rio+20 conference in June this year, despite its modest achievements at the government level, had many important developments. For the first time, it became obvious that the real driver of a more sustainable world is going to be business. The spotlight is now on corporations to drive the sea change, which is great for business.

Reputed consulting firms are also joining the fray by translating the implications of a four degrees C rise into business terms, which will be the new normal if business continues as usual. As the large consulting firms such as McKinsey, BCG, PwC, Deloitte, Accenture, and others bring their firepower to sustainability, we are seeing the business case for sustainable business become more stark and irrefutable.

This is also the year in which the concept of natural capital became accepted by many large corporations. It will become increasingly important in the future as corporations realize the business risks from not taking it into account. In a few short years, I expect that natural capital will be as natural a consideration as financial capital.

Accountants are also beginning to get involved. Concepts like integrated reporting, Environmental P&L and sustainability accounting standards are gathering momentum as reputed organizations throw their weight behind them. I expect some real progress in these areas in the next year.

It will begin first with a transformed framework for business risks, as environmental and social factors push their way into business planning. Disruptions due to climate change and ecosystems loss are increasingly on the corporate radar. These include supply chain disruptions due to natural events, shortages of key natural resources including water, and increased prices for food and essential commodities.

Quite naturally, investors are beginning to notice as they link more investments explicitly to social and environmental considerations. The most important stakeholder of all, the general public, is also beginning to pay attention. A growing majority now believes that climate change is human-related and a real cause for concern.

What we are seeing is an acceleration in the concerns of key corporate stakeholders in response to the converging storm of sustainability-related business challenges.

2013 is shaping up to be the year when there will be a sea change in the C-suite.