Looking back on 2013, I wish I had been wrong on some forecasts (in these pages last year) which I got right, and right on some which I got wrong.
The devastation and anguish unleashed by Typhoon Haiyan in the Philippines makes me wish I had been wrong about the escalating human costs of governments’ prevarication. And I wish I had been right that widespread frustration with our dominant free-market capitalist model would lead to increasing protests, through the net and on the streets, making many more business leaders and politicians begin righting wrongs, if only for fear of losing profits and power.
Unfortunately, an Arab Spring of crony capitalism just did not happen. Despite many protests, neither the root cause of many of today’s biggest social and environmental problems (a defunct economic model built around a corporation without social purpose) nor the most likely solutions were named or nailed. Agitators remained uneducated, and the educated did not agitate.
And so, as we enter 2014, this corporate capitalist model is still driving the world economy in the wrong direction, worsening environmental risks and increasing ecological scarcities. The single largest sustainability challenge of our time is this: today’s corporation, the main agent of today’s economy, generating two-thirds of global GDP and jobs, needs to be redesigned. Without corporate redesign, we are unlikely to see any progress towards a “green economy”.
The good news is that corporate redesign has begun. As I outlined in 2013, corporate leaders are demonstrating new pathways and solutions. Unfortunately, these leaders and their supply chains account for perhaps no more than 5% of the world economy, and their leadership practices largely remain the subject of erudite global conferences, but not models for urgent micro-policy reform.
In 2014, what we need is not more sustainability leadership but more sustainability followership. And to ensure the leaders have followers, we need urgent reforms in performance reporting, advertising, leverage, and taxation, with entire business sectors moving in unison. They will have to overcome many challenges on the way: the primacy of profits, cut-throat competition, first-mover disadvantage, and corporate egos.
Today’s economic structure actually makes this challenge easier than it sounds, because almost all business sectors – from aerospace to agriculture to apparels and proceeding down the alphabet – have no more than ten or twenty global multinationals who control 80% or 90% of each market. Their success will depend on how well they work together as a global sector and how well they partner with governments and civil society.
One new global partnership of this kind is the Tropical Forest Alliance, TFA-2020. It was catalysed by the Consumer Goods Forum, supported by many governments and NGOs, and launched in June this year in Jakarta by Indonesia’s president Susilo Bambang Yudhoyono and Unilever Chairman Paul Polman. Their goal: to end tropical deforestation due to four major global agri-commodity sectors (palm oil, pulp and paper, beef and soya) by 2020.
As 2014 begins, I forecast that TFA-2020 and many other such business-sector-wide initiatives will be formed, and will begin making a difference. Am I an optimist? Yes, because, as Winston Churchill said, “it does not seem too much use being anything else.”
First published in Guardian Sustainable Business on 7 January 2014