Like the digital revolution before it, the sustainability revolution promises to change everything. That’s the view of Bain & Co Chairman Orit Gadiesh, who along with Jenny Davis-Peccoud, Partner, Head of Global Sustainability & Corporate Responsibility has written a paper on the topic for the World Economic Forum
And they caution that, just as with digital, many companies are moving too slowly, taking an incremental approach to a challenge that demands a radical rethink, and failing to adopt a “disrupt or be disrupted” mindset.
In the paper called Why sustainability is the new digital the pair says that COVID-19 has created a sense of urgency for businesses to improve their sustainability credentials.
And they further argue that there are lessons to be learned from the digital disruption of markets over the last two decades.
As with the digital revolution, COVID-19 has accelerated the sustainability revolution as well as expanding its scope.
“With consumers and investors demanding significant change, profit pools shifting away from incumbents to insurgents, and even the most carbon-heavy companies making net-zero pledges, executives ignore this revolution at their peril. And make no mistake: this is a real revolution. With every industry—nearly every product and most of our habits under scrutiny—it would be downplaying it to call it anything else.”
But as with digital, the great impediment appears to be a lack of imagination.
We never learn
Company leaders are making some familiar errors, they argue.
“Many companies are moving too slowly, taking an incremental approach to a challenge that demands a radical rethink.
“Remember in the early 2000s, when companies realized they needed to go digital, they would hire a web developer? They soon learned that was a woefully inadequate response to the enormous task at hand … Something similar is happening today when the executive suite hires a sustainability expert to shepherd this transformation. It’s a start, but it barely begins the work needed to navigate the impending revolution.”
Industries such as energy, food production, transportation, and investment are already demonstrating the shift. They note for instance that renewable energy capacity has grown by 50 per cent in the last year while the global electric car stock is up a staggering 900 per cent.
They argue that sustainability objectives are already well supported by managers however those same leaders remain wary of the costs. “For example, in many industry sectors they’re searching for ways to minimize plastic waste, but they find the cost of setting up collection and recycling systems or replacing current volumes with bio-based materials prohibitive. “
Gadiesh and Davis-Peccoud, however, say that these same executives know they must prepare for the day when the price of carbon balloons to US$75 per ton or more.
“But they are also cautious about the cost of renewables and other low-carbon technologies.”