Introduction
Thank you for the opportunity to address the SDG Summit USA, the UN Global Compact USA’s flagship event.
With over 1000 companies as signatories, you’re an enormous force. In fact, I’ve been told there’s over $5 trillion of spending. Let me get straight to the point in the interest of time, but more importantly the urgency of the situation.
Stepping up
We all know that the world is not in good shape. Our planetary limits are being tested; our linear extractive production models are frankly coming to an end. In my opinion, climate change and inequality are our biggest issues.
You just have to look at the news to see what’s happening. The UN Secretary-General rightfully said that our world is burning. As our challenges are increasing, it requires all of us to step up.
I had the pleasure of helping develop the Sustainable Development Goals (SDGs) in 2015 when then-Secretary-General Ban Ki Moon asked me to be part of a panel when I was running Unilever. We internalised these goals into our Unilever strategy, which culminated in a 290% shareholder return over my 10-year tenure, well outgrowing our competitive set on both the top and bottom line. Embracing the SDGs pays and increasingly, those who embrace the Sustainable Development Goals tend to get rewarded.
Not surprisingly, people look for purpose. Companies with strong purpose at their core attract better talent, reduce costs, and enhance relationships with all of their stakeholders. It helps to drive innovation; and betters positions a company for a future that we all aspire to and one that produces better results.
As American companies, you play an especially critical role to drive the SDGs. You have the technology, you have the funding, you have the resources and yes, the global reach to have a significant impact. Many companies have already demonstrated this incredible leadership in making the SDGs come alive. Companies like Granite Construction or AD&V and undoubtedly many others, show the leadership we need.
The business of doing good business
Many now understand the enormous economic opportunity. States from Texas to Wyoming, or from the Carolinas to Iowa are actively embracing investments in green energy, battery development, and sustainable agriculture. And that’s not surprising.
They see the economic opportunity and yes, citizens are demanding for it, irrespective of where you are on the left or on the right of any political spectrum. People want clean air, healthy rivers, thriving biodiversity, functioning supply chains. They also want thriving businesses creating new jobs.
It is no question that the increasing change that we see in our weather patterns, the destruction in our value chains, the temperature rises that prevent many people from working, are pitfalls we need to be rid of.
The tide is turning
The good news is that we are seeing tipping points in many areas from electric vehicles to solar, to wind and regenerative agriculture.
We are seeing things moving quicker than we thought and that’s because costs are coming down and technology is being developed faster than we thought, and these are economic forces we cannot stop. Even if self-interest or some political forces want to do that, it will only slow down, but certainly will not stop.
Despite this progress, we unfortunately see a gap versus what is needed. Increasing climate change, for example, is still projected to increase carbon emissions by 10% over this decade, when we need a 45% decline. We are still creating the issues at a faster pace than we’re applying solutions, and that is not good.
An exponential problem cannot be solved by linear thinking. We need extraordinary or exponential action to solve it. Business will need to step up individually and collectively, especially now in the absence of functioning governments.
“An exponential problem cannot be solved by linear thinking. We need extraordinary orexponential action to solve it.”
The US, where policy is being gridlocked, is not much different to other parts of the world. Governments today are increasingly looking to the private sector more than ever to provide solutions. The good news is that 94% of businesses see the SDGs as a unique global vision they want to embrace, 94% think that it really helps their companies. We have the right mindset if you want to, especially when it comes to the role of companies to create employment opportunities or advancing economic growth.
But we need to do more to reap the full benefits of the SDGs. And no, as I sometimes hear, it’s just not only a developing market issue. Disparities are stubbornly present everywhere. America’s youth, women, minority racial and ethnic groups are still suffering. You know, in your country alone, 6.6 million people lack access to safe sanitation. That’s a population probably the size of the state of Indiana, there by itself.
Embracing and internalising the SDGs is absolutely key. The solution is not somewhere else. It starts and ends with each of us individually and collectively, and the first step to that is awareness and recognition.
Becoming Net Positive
Now, I do agree that many of the tougher challenges require partnerships and ultimately alignments with governments on policies, frameworks, and standards. Otherwise, we won’t get there. And yes, it’s hard work to do: most people understand the why now but struggle with the how.
That’s why we wrote the book ‘Net Positive: How courageous companies thrive by giving more than they take’. We asked two questions; ‘how can we profit from solving the world’s problems instead of creating them’ and ‘is the world better off because your business is in it, yes, or no?’
That’s for you to decide, but it’s very much about changing mindsets in my opinion.
95% of companies write sustainable development reports or sustainability reports, but if you really read them, in essence it’s about being less bad. A little bit less carbon emissions, less plastics in the ocean, less deforestation in your value chain but frankly, when we’ve overshot these planetary boundaries to such an extent, less bad is simply not good enough anymore.
We need to start thinking regenerative, restorative, reparative, and that is what we call Net Positive.
Net positive companies have 5 characteristics.
First, they take ownership of their total impact in the world, all consequences, intended or not.
They operate for the long-term benefit of all their stakeholders.
They create positive returns as a result of that for everybody, including society and their own businesses, but they see shareholder return as important but not myopically only focused on that. It’s a result of what you do, not the main reason for being.
And last but not least, I would say that positive companies actively work with others such as civil society and governments, to drive the broader systems changes that are needed. So, for that we have to become the higher moral leaders embracing the need of all our stakeholders.
“We need to start thinking regenerative, restorative, reparative, and that is what we call Net Positive.”
But as I said, it also requires partnerships; we have a chapter that is called ‘It Takes 3 to Tango’. We simply can’t get there alone, from working in our industry sectors: getting sustainable airline fuel or the Net Zero Shipping Alliance, or the efforts that are collectively going on regenerative agriculture require industry and cross-industry efforts.
But many of them, indeed, you can’t do alone. So next to this moral leadership, you also have to become cooperative leaders instead of competitive leaders, especially when the future of humanity is at stake. And then yes, we do need to drive the bigger systems changes, for which we need to have the help of governments, otherwise we simply won’t get there.
Unfortunately, we still see too many companies lobbying in Washington for their own self-interests or letting trade associations loose advocating different things than what they publicly advocate as companies themselves.
So, we need some more consistency there, but frankly we cannot get there without active involvement of governments, and that requires active involvement of business individually and collectively in the political arena, tough as it may be.
That requires not only the moral leaders I talked about, the cooperative leadership I talked about, but that is also requires the bridging leadership.
Leadership with courage
But what is needed? Above all, I believe in courageous leadership.
Courageous leadership comes from the Latin word core, which is the heart- to speak one’s mind by telling one’s heart. So, courage is actually your heart.
Yes, it takes courage to take responsibilities beyond scope one and two.
It takes courage to set targets that science demands versus targets we can get away with.
It takes courage to work in partnership with others, just like it takes courage to work with governments these days.
I understand that it takes courage, finally, to speak up on issues that affect the basic values of humanity.
Well, we have over 1000 signatories in the US. That’s already a tremendous force but think about doubling that together. What force that would be to make the change?
You have embraced the 10 principles of the UNGC. You’ve put a programme of action in place. But are you really the courageous leaders that set the standards and the goals where we truly need them to create this more inclusive, sustainable, and equitable society that we want now, and for future generations to come?
Make the global compact from a very strong base and an even stronger one at a time that we need it most. Frankly, the future of humanity is at stake and it’s simply too important than staying on the side-lines.
Nobel Prize winner Wangari Maathai said it well when she said that “in the course of history, there comes a time when humanity is called upon to shift to a new level of consciousness, to rise to a higher level of moral ground”.
Ladies and gentlemen, I believe that time is now. Enjoy the rest of the day and good luck on the journey, and certainly hope to see you in the not-too-distant future.
Thank you very much.
