November 6, 2020
This post first appeared as the Service Leader comment in SR Inc SBER Q2 Summer Review.
In the summer of 2020, the world is gripped by the pandemic that experts long warned about and which best practice Corporate Sustainability Committees recognized at least since the World Economic Forum’s Health Risks Report first did in 2006. Even prior to the pandemic in politics throughout the world, an anti-global nativism was ascendant; having come to dominate governments including those in Brazil, Turkey, Hungary, Poland and even Britain and the U.S. which did so much to create global trade. Furthermore, the Black Lives Matter movement has brought the demand for racial equity to the fore in the U.S. and the scientific news regarding human caused climate breakdown has only become even more alarming in the first half of 2020.
In this context and as the public sector worldwide intervenes in the economy through fiscal and monetary policy at levels without precedent outside of World War II, CEOs in the U.S. and around the world are publicly joining calls to “Build Back Better.” The CEOs of several SR Inc Member-client companies joined more than 150 others also participating in the Science Based Targets Initiative to sign onto a UN Global Compact coordinated statement to call for policies to hold global temperature rise to within 1.5 C in line with reaching a net zero emissions economy well before 2050. SR Inc Member-client CEOs also joined well more than 300 endorsing Ceres LEAD on Climate 2020 Call to Action: Build Back Better – which recommends investment in the country’s transition to a net zero economy. Institutional investors representing more than 11 trillion in assets under management also came together to urge EU leaders as they plan recovery from the COVID crisis to accelerate the transition to a net zero economy in line with the EU’s officially adopted Green Deal and the 2015 Paris Agreement.
Interestingly, a survey of Fortune 500 CEOs found that 48% think the COVID crisis will accelerate the move to the type of “multi-stakeholder capitalism” highlighted by the Business Roundtable one year ago by its “Statement on the Purpose of a Corporation.” Which is consistent with Harvard Business School professor Rebecca Henderson’s new book “Reimaging Capitalism in a World on Fire” as reviewed on SR Inc’s Sustainable Leadership blog. The book is a brilliant summary of more sustainable business as Henderson provides chapters on how to best: create shared value, build purpose driven organizations, rewire finance and build multi-company cooperation.
It is not, however, until Henderson reaches her fifth recommendation – which she acknowledges is the most important for systems change – that she offers something that will be new to leaders in sustainable business. In her final recommendation that companies help “Rebuild Our Institutions and Government“, Henderson moves beyond the tired framing of markets vs. government to acknowledge the broad consensus among relevant scholars that a superior framing is “open regimes” with “inclusive economies” such as the U.S., Germany, Britain and Japan versus “closed regimes” with “extractive economies” like Russia, North Korea and Angola. As Henderson observes: “The problem is not free markets. The problem is uncontrolled free markets, or the idea we can do without government . . .” and “the alternative to strong, democratically controlled government is not the free market triumphant. The alternative is crony capitalism, or what the development economists call “extraction.”
Consequently, Henderson advises business leaders to move beyond involvement with host communities to expand efforts on both national and global levels on three key issues that promote “inclusive economies”: (a) ensuring minority rights and inclusion; (b) pricing major environmental externalities; and, (c) preserving and strengthening democracy and civil society. This is tall order but “in a world on fire” its needed and there are well developed “Non-market Strategies” (see e.g.: “Aligning for Advantage”, Lawton 2014), examples, templates and tactics to help you lead.
Jim Boyle is the CEO & Founder of Sustainability Roundtable, Inc. For more than a dozen years, Jim has led full-time teams of diverse experts to assist nearly 100 Fortune 500 and growth companies in their move to more sustainable high-performance. Specifically, SR Inc has helped world-leading corporations, real estate owners, and federal agencies to set goals, drive progress, and report results in their move to greater Corporate Sustainability. Mr. Boyle led in the creation of SR Inc’s Renewable Energy Procurement Services (REPS), which advises and represents Fortune 500 and fast growth companies across the U.S. and internationally in the development of renewable energy strategies and the procurement of both on and off-site advanced energy solutions. Before founding SR Inc, Mr. Boyle co-led Trammell Crow Company Corporate Advisory Services in San Francisco and returned to his native Boston and Trammell Crow Company’s market leading team in Greater Boston where he received the Commercial Brokers Association’s Platinum Award for the highest level of commercial real estate transactions. Earlier, he advised companies on real estate and environmental matters as attorney at a large law firm based in Boston. Jim is a graduate of Middlebury College, where he co-captained the football team, and Boston College Law School. Early in his career, he served as a federal law clerk, an aide to John F. Kerry in the U. S. Senate, and on Vice President Al Gore’s campaign for President. Jim lives in Concord, MA with his wife and kids a half mile across the street from Emerson’s house and museum on the route to Walden Pond.
