5 lessons on how to make sustainable change in business

MELBOURNE, Australia — To rebuild trust in corporations, businesses need to be an agent of sustainable change. At the 2019 conference of Global Compact Network Australia in Melbourne, some of Australia’s largest businesses representing industry, finance, technology, mining, health, and more, discussed how to achieve this. Pushing boundaries, taking risks, and building transformative pathways were among the buzzwords — but businesses still have a long way to go to achieve sustainable and right-based business practices. “We are still dealing with an analyst market that wants to hear from us quarterly.” --— Audette Exel, CEO and founder, Adara Group How can businesses convert talk into action to help build a better world for all, including developing countries? Here are five lessons from the conference: 1. Transition boardrooms and organization leaders Business models that put purpose before profits requires a new breed of leaders — within the organization and on board rooms. “To act purposefully for all stakeholders, companies need to have a variety of views at the decision-making table,” Audette Exel, CEO and founder of Adara Group, told the audience. Boardrooms that represent greater diversity — demographically as well as including human rights and sustainability experts — is an important step. The way leaders are promoted within organizations also has to change. “Who are we putting into leadership?” Ming Long, chair of AMP Capital Funds Management, asked the audience. “We glorify people who deliver profits, but when we promote based on budget targets we risk the organization’s moral compass. We can’t have someone with no moral compass steering the ship.” New leaders need to be focused on long-term views and communicate the need for business change. Long said boards need to empower new leaders to ask questions, take risks, and speak more broadly on issues that matter. 2. Shift from short-term goals The focus on short-term, quarterly goals was identified as building the wrong form of leadership required for the future business world — and achieving the Sustainable Development Goals by 2030 and beyond. “We are still dealing with an analyst market that wants to hear from us quarterly,” Exel said. Educating investors is important in shifting this focus. For Lachlan Feegans, director of Asia-Pacific sustainability at Brambles, this means delivering roadshows that educate on environmental, social, and governance. Investment is another way to engage investors in a more constructive dialog to change expectations. 3. Acknowledge the cost involved in the transition — and get on with it “There absolutely is a cost in doing this,” Long told the audience of transitioning to a sustainable and rights-based business approach. But despite the cost, she said that was not an excuse to transition. Costs to business occur in transitioning approaches, training staff, and changing approaches entirely — with a potential flow-on effect to customers. Justin Franks, Suez director of marketing and communications, said this needed to be accepted as a consequence. “To drive a circular economy, we will all need to pay more in the short-term,” he said. “We have to be prepared to pay more, and this will help ensure there are reputable suppliers supporting business.” Exel said: “We cannot use transition risk as an excuse, if we do nothing for a decade, transition risk will become a cliff risk.” 4. Take accountability for actions and demonstrate change In the keynote address to the audience, Gillian Triggs, former president of the Australian Human Rights Commission explained that public engagement needs to change from risk aversion to acknowledgment of action — or risk losing customers. In 2016, Australian surfing and swimwear retailer Rip Curl, had slave labor identified within its manufacturing supply chain. The retailer’s response was not to deny but to acknowledge responsibility and move to change its practices. Rip Curl’s response, Triggs explained, referred to the issue as a “screw up” on behalf of the organization — a response she said was addressed to a younger demographic it risked losing. 5. Understand how and when to make an impact on board decision According to Exel, there is an increased focus on issues relating to climate change, human rights, and sustainable business practices. She said these are appearing earlier on board agendas rather than an afterthought. This transition, she said, has been “a beautiful thing to watch.” But despite this desire to focus the board's attention on sustainable practices, it is still important for sustainability and human rights professionals to understand how they can influence a board’s thinking to build better practices that are part of business as usual. Communicating the specifics to the board was also important. “The sphere to influence is through communication,” Exel said. She said that data, beliefs, and other approaches could be used to communicate with the board. “When going to a mainstream board, you need to communicate in a way that fits their frame. And that way you can be heard,” But Megan Clark, head of the Australian Space Agency, explained that it was not only important to assess how to influence, but when. “If you drop something on the table at the wrong time, it just dies,” she said. “Getting the timing right is important.”