How can sustainability build resilience through crises?

9 min read

Sustainability

We’ve hosted a series of Survive and Revive webinars together with B Lab UK, the charity behind the B Corporation (B Corp) movement.

Sustainability

Businesses can be certified as a B Corp if they achieve the highest standards of sustainability. The webinar series aims to help businesses looking for ways to rebuild, reshape or evolve their strategy in response to coronavirus.

In this episode B Lab UK spoke to Thomas Bourne, Founder of Greenheart Consulting, to understand how addressing sustainability can build a resilient business that can adapt to and ultimately overcome significant crises. Greenheart Consulting is a Santander Business Banking customer and a certified B Corporation.

Firstly Tom, please tell us a little bit about yourself and how you work with companies on their sustainability journey.

So I spent the first seven years of my career as a commercial lawyer which was a very different world to the one I'm in now. But through that time, I always felt that I had a calling to sustainability. In 2012, I did a masters in the circular economy and I then spent about three years running an organic food business, which kind of got me a little bit closer to the action and was my MBA on the job, if you like. 

That was where I met B Corp when it arrived in the UK in 2015. I think I realised then that this was the perfect marriage for me of my values and my enthusiasm for business. It became obvious that what I wanted to do was dedicate my work to helping companies improve their social and environmental impacts. So nowadays what we do is use the B Impact Assessment as the diagnostic tool to measure these impacts and create both the architecture and the activities for business improvement on sustainability issues. Some of those are strategic, involving big business model shifts. Some are more operational like working with supply chains to improve their Environmental Social and Governance (ESG) performance and the collective sustainability.

So this week, we are talking about how addressing your business’ sustainability can create resilience which helps weather crises, and the elephant in the room is obviously COVID-19. How have you seen businesses reacting to COVID-19?

I think it's been a real mixed bag, some sectors obviously like hospitality, have just had to hunker down and get through it the best they can. Others, particularly in consumer goods space, have been really quick to react. A lot of them have reviewed their channel mix and taken product to market very quickly through channels that they hadn't looked at before. So quite a lot of speedy innovation. 

The other thing I've noticed is a lot of companies looking forward and accelerating their sustainability agendas, because they realise that the recovery strategies they need to adopt have got to take better account of social and environmental factors. Certainly, we're hearing a lot about the extra resilience that purpose-driven businesses are showing. And that's bearing out in the performance of ESG funds, which are outperforming the rest of the market. Whether this is because these sorts of companies are more innovative or whether they had already adopted a lot of the practices like flexible working and telecommuting that have been forced on everyone overnight, I don't know, but we're certainly seeing that as a trend.

A key element in this discussion is the consumer; 77% of the population believes that companies have a broader social purpose, beyond selling their products and services, to help in the fight against coronavirus. And whilst two thirds are positive about how the response from companies has been, over half say they would be likely to boycott a brand they think has behaved badly during this time. How have you seen consumers reacting to COVID-19 and how can addressing environmental and social issues as a business create a long-term relationship with your customers?

I think that the word relationship is the key word. And I think viewing these interactions not as transactions, but as relationships, is the key. Brand relationships, like employee relationships, are built on trust. Ultimately, these days, with greater consumer interest in social environmental issues and much greater access to information, the stability of that trust can really turn on a dime.

So for me, the days of greenwashing are behind us. If a company doesn't engage properly and meaningfully with social and environmental issues, they will be called out. We're seeing that happen right now and when it happens, the top line can be hit and brand loyalty can be damaged.

So beyond the consumer, how do you see sustainability creating a resilient company that can weather crises? What is the mechanism here

Well, I think purpose-driven companies have much stronger social contracts with their stakeholders so they will have existing mechanisms in place to deal with those relationships with consumers, employees, communities, etc. They have made a deliberate decision to hear the voices of those stakeholders and factor them into their decision-making process, whether it is by having stakeholders on advisory boards or having some sort of formal stakeholder engagement mechanism. They will have some methodology in place for making sure those voices are heard. All of this strengthens the relationships we've talked about and so these parties are more likely stick together through a crisis.

Many comparisons have been made to the 2008 financial crisis and its effect on businesses. Clearly, the effects of COVID-19 will be more wide-ranging, so do you see this as a fair comparison in regards to how businesses are approaching sustainability?

I remember 2008 very vividly, as lots of us do. I was a junior lawyer at the time and I remember just keeping my head down and waiting for the axe to fall. And all I hoped for was that things would go back to normal and that I'd keep my job. 

I think things have moved on massively since then. The context in which this crisis has come is very different. Actually, my greatest fear now is precisely that we will simply go back to normal. I don't think we will. Blue Planet and Greta Thunberg have changed the narrative, there's no doubt about that. A massive inequality is also apparent from the COVID-19 statistics. 

I think one of the biggest differences is that now business really understands its role and agency for change much better and the clarion call for them to take a position on these issues is getting much louder.  Business leaders across the globe are now calling for a green recovery. It feels very different this time. I think it could be a pivot point into a much more sustainable and equitable economy if business leaders and policymakers choose to treat it as such.

There is another comparison to be made with an even greater upcoming crisis which is of course, the climate crisis. What lessons do you think businesses should take from what is happening now to ensure they are increasing their resilience going forward?

There's no doubt the clock is ticking on the Sustainable Development Goals and the Paris Agreement. I think there's something visceral about having less than 10 years to run on some of the biggest global targets ever created. I think and hope that the spirit of collaboration and interdependence that we've seen in COVID-19 can be brought forward to those crises, whether it's the incredible public reaction to lockdown or the pace at which things like the Nightingale Hospital were built.

I think it has really shown us what can be done if we work together on urgent issues. So my hope is, and my ask is, as we come out of this is let's use that resolve to deal with these huge threats.

Thomas Bourne is the Founder of Greenheart Consulting which helps businesses understand their impacts and implement strategies to improve their sustainability.

Watch the recording of this webinar presented by James Ghaffari from B Lab UK.

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