2020’s meeting of global elites in Davos may be best remembered as a Trump vs Thunberg showdown.
On one side, a US president who is pulling out of the Paris climate accord, planning to revise America’s National Environmental Policy Act and continues to promote the use of fossil fuels. On the other, Thunberg, a 17-year-old Swede with ambitious ideas and a growing influence on the global climate conversation.
While it made great headlines, in the wider business environment this battle is all but over. A handful of tub-thumping corporate giants remain. But poor environmental practices and refusing to engage will attract unwanted attention. The kind these laggards cannot afford in 2020. There’s a growing realization that sustainability, accountability, and transparency should lie at the heart of business. It is the only effective way of conducting business.
Profits and purpose
Last year, 181 leaders of the biggest firms in the US – as part of the Business Roundtable – updated their ‘purpose of a corporation’ statement. Business isn’t only about serving shareholders (their default position for over 20 years,) but serving all stakeholders. This includes protecting the environment, embracing sustainable practices and a commitment to transparency.
The World Economic Forum has welcomed the ‘woke’ movement.
This year’s theme encouraged delegates to discuss ‘Stakeholders for a cohesive and sustainable world’. The WEF’s vision of ‘world-class corporate governance, where values are as important as rules’ is all well and good, but businesses, including Davos delegates, don’t always play by the rules. So can we expect them to adhere to mere values?
This has been the criticism leveled at Davos this year – and over the past half-century. Questions of whether it is just a talking shop continue. Davos celebrated its fiftieth birthday last week, but how far have we really come? Where is the long-term impact in governing, regulating and planning? How are we measuring whether leaders stick to these supposed values?
Say it with us, "servitization"#servicehttps://t.co/2hD6Rfx5VS
— IFS (@ifs) January 28, 2020
Fifty years on
Since the 1970s, carbon emissions have increased by around 90 percent; over 750,000sqkm of Amazon rainforest have been destroyed, and we’ve wiped out 60 percent of animal populations.
It’s not just the world around us we’re destroying. Slavery remains a reality. Human trafficking, forced, bonded and child labor linger in some supply chains, in areas like sourcing of raw materials and waste disposal, hidden from consumers.
Davos’ 2020 theme was hardly surprising. Issues of corporate responsibility and the role of business in society, have rocketed up the news agenda. Trump vs. Thunberg, the Davos climate strikes and the flurry of ‘green’ business announcements around the event have kept interest levels high.
In this climate, consumers and business leaders are applying more scrutiny to those they buy from and do business with.
Attending the WEF annual meeting doesn’t automatically tick the sustainability box, though – especially if you travel there by private jet!
If we want to see change, Davos attendees must walk the walk all year-round, not just talk the talk one week in January.
A technological solution
You won’t be surprised to hear that there’s an app for that.
Enterprise resource planning (ERP) solutions give organizations accurate insights into every element of business and enable them to use technology, connectivity, and data to address challenges and drive positive change. What does this look like?
For one of our customers, Sri-Lanka based EcoSpindles, it’s complete visibility of its entire supply chain.
This allows customers to trace and identify the origin of materials used to create their recycled yarn. It’s also brought the company closer to its customers and created a value-add service, with some customers now requesting yarn sourced from bottles gathered and recycled from specific beach locations. This, in turn, has allowed these customers to offer a value-add and differentiator for their customers.
By uniting all operations, processes, and assets (from finance and HR, to connected sensors, field workers and suppliers) in a single, holistic, accessible platform, ERP solutions give businesses agility and transparency. This allows them to be fully accountable and responsible for the entirety of their business – driving efficiencies and identifying and addressing challenges.
Launching and sustaining CSR initiatives isn’t only about technology though. It involves a wholesale cultural change. Embedding new ideas, new processes, and a new vision in a corporation needs to deliver value not only for the environment, society, and communities – but for the business’s employees and its bottom line.
Learn more about IFS CSR initiatives at ifs.com and read more about their importance at blog.ifs.com.
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Photo Credit: Djim Loic