Is Your Business Future Fit?
By Mary Sigmond, YPO
The benefits of turning sustainable development goals into business opportunities
Today, environmental capitalism — finding business solutions to global challenges — is a USD12 trillion market opportunity.
In this era of profound market disruption, it is increasingly important to understand the business model practiced by your company and assure it delivers both financial and extra-financial value in tomorrow’s world. This understanding allows for global grand challenges and the United Nation’s Sustainable Development Goals (SDGs) to be turned from business threats to opportunities.
The science-based Future-Fit Business Benchmark is an invitation to leaders in business, financial markets, government and civil society to join in the vital task of co-evolving the tools to define and measure true sustainability – or “future-fitness.”
“Our global economy is failing society, in three critical ways,” explains John Elkington, a world authority on corporate responsibility and sustainable development. “First, the basic needs of billions of people around the world are not being met. Second, we are disrupting and degrading Earth’s natural processes, upon which humanity and all other life depend. And third, we are failing to adequately value and encourage behaviors that seek to tackle these systemic problems.”
During a YPO Innovation Week session, three global business leaders shared how they are changing the way they do and value business, enabling them to both turn a profit while solving some of the greatest global challenges of our time.
Reset your agenda and strategy
You may not think of an 80-year-old company like Covestro, which employs 16,000 people around the globe, as a startup, but it refers to itself as one, constantly resetting and reinventing itself based on a people, plus planet, plus profit business model. Covestro is among the world’s leading manufacturers of high-tech polymer materials for all key industries.
“The way you build a fast-growing startup company is by focusing on hotspots. Sustainability development goals are a huge source of profitable growth. Match your business goals to those growth opportunities,” says former Covestro CEO Patrick Thomas. His team tests every innovation or idea against the triple bottom line: people, planet, profit. Two pluses and one neutral is what it takes to move a product forward. “Build your portfolio of products keeping this in mind and you’ll be successful.”
Thomas sites Covestro’s 18 percent growth recently in the new “greening” of the Chinese economy. “By substituting old-school materials for new ones we are able to drive growth and the value of our enterprise,” he says. “By using carbon dioxide as a source of carbon in our polymers, we are able to substitute 20 percent of the oil we used to use, decreasing the carbon footprint.”
Move to a consumption model
YPO member and CEO of Kaer Justin Taylor has completely evolved this 70-year-old company from product sellers of air conditioning equipment to now offering clients the ability to buy air as a service. “We are making an impact in Southeast Asia that is better for both people and the planet,” says Taylor.
In the past, building owners had to engage various consultants, contractors and operators to provide air conditioning for their tenants. The installation of the equipment required significant capital investment and building owners had to manage highly unpredictable operating costs due to untimely repairs and deteriorating system efficiency. Due to the fact that so many different parties were involved in delivering the system, individuals would often be accountable for specific equipment, but no one was responsible for the performance of the system as a whole. No one was responsible for comfort.
“Due to the problems with this model, many building owners now can choose not to invest in owning and operating an air-conditioning system and instead simply purchase air conditioning at a fixed dollar/rate fee,” says Taylor. “Given the economic benefit conditions up front to the clients, it allows us to focus entirely on how to achieve the best air conditions for less money and less impact on the world.”
Crack the distribution code
More than 1.5 million points of light. That’s how many BRIGHT solar lamps have found their way into the hands of anyone who needs to be less dependent on the electrical grid, whether by choice or by living in off-grid or bad-grid communities. Based in Oslo, Norway, the company is dedicated to improving the lives of these communities. That dedication lies at the heart of the heart of BRIGHT’s products, development, business and ethos of its CEO Johan Gjaerum.
“Our vision is to help the 1.3 billion people in the world who currently are without access to electricity, and we are committed to understanding how affordable, convenient access to light can alleviate the negative effects of living off-grid, and improving family economy, education, health and safety.”
“Our vision is to crack the code of distribution and if we can get it right we can also crack the code of affordability for people across the world to have reliable electricity,” says Gjaerum. “This also allows us to create sustainable business growth.”
Bright was the first company to fully commit to the Future-Fit Business benchmark. Gjaerum believes that the path moving forward is one of no longer paying lip service to sustainable companies.
“I see a future in which companies will not have a license to operate unless they can prove that their business is done with sustainable development goals in mind. It will be a necessity for future business leaders to operate.”
Learn more in the video session on turning sustainable development goals into business opportunities