Will this be the sustainability trend that defines 2022?
2021 was the year of the Great Resignation. Will 2022 be the year of the Great Awakening, where we see a growing number of companies move away from sustainability-as-usual and adopt awakened sustainability as an organizing principle? And if so, what are some of the key signals of a sustainability-first mindset we may see in 2022?
In 2021 millions of people around the world quit their job. This trend was termed the “Great Resignation” or the “Big Quit.” However, resignation or quitting may have a negative connotation — quitting, for example, is “associated with pessimism, laziness, and lack of confidence,” Derek Thompson wrote on the Atlantic. Perhaps a better way to frame this trend is as a shift in power as my colleague at The New School, Prof. Darrick Hamilton suggested.
“We really should be characterizing it as a rebalance of power, a rebalance of power that, frankly, empowers people to make decisions as it relates to their employment that are more beneficial to themselves. This is the beginning. We need a lot more,” Hamilton told the Washington Post podcast.
I agree with Hamilton. This trend hopefully suggests the beginning of a broader trend, which we can call the Great Awakening. Driven by a convergence of social and economic pressures, the COVID-19 pandemic, and the climate crisis the Great Awakening could be characterized by a growing number of people waking up to acknowledge and respond to the many devastating and exploitative systems we have in place. One example of the Great Awakening is the rise of a new vision to sustainability in business: Awakened sustainability.
A new vision: Awakened sustainability
Accelerated in particular by the pandemic the Great Awakening is about challenging and rewriting the “rules of the game” in so many places they make no sense anymore. One of them is the business world. While embracing for decades Milton Friedman’s ideas on business responsibility, the business world has also evolved into what I call sustainability-as-usual, i.e. efforts to make businesses more sustainable have become the normal course of things, but simultaneously they are still subjected to the shareholder capitalism mental model. In other words, sustainability practices can be pursued as long as they are aligned in general with shareholder capitalism, or do not deviate from it significantly (no matter how hyped stakeholder capitalism is, shareholder capitalism still rules — consider it a 2.0 version).
While sustainability-as-usual is capable of producing some progress, it doesn’t go far enough — its incrementalism and slow pace of change fail to deliver the level of change required to meet the challenges we face. In my book Rethinking Corporate Sustainability in the Era of Climate Crisis: A Strategic Design Approach I look into sustainability-as-usual in further detail and suggest a new vision for corporate sustainability, which I define as awakened sustainability. It is constructed of three elements, mental model (sustainability first, NOW), content (science-based principles), and context (social justice and regenerative design), which I presented in further detail here (see also in the picture below).
The vision of awakening sustainability corresponds with the notion of awakening, which could range from a very basic level of waking up from a sleep mode, acknowledging the crises we face and what is needed to respond to them adequately, to a deeper spiritual level of change “that challenges and subverts your framework for understanding the nature of reality.” At its core, awakened sustainability is first and foremost grounded in a shift from a mindset that sees profitmaking as the top priority of the company to a new mental model in which sustainability considerations top everything else.
As I mentioned in the past the new mental model is not about the elimination of profitmaking as an important element in corporations, but about changing priorities. Think of it as a person who enjoyed all sorts of food including food that wasn’t very healthy. One day they have a heart attack and their doctor tells them they need to change their eating habits to reduce the risk of having another heart attack (and dying prematurely). This person will not stop eating, but now their first priority is their health, redesigning their diet (and lifestyle) accordingly.
While this may be somewhat of a grim metaphor it may be helpful in thinking about the necessary mindset shift in business in terms of changing priorities. At the same time, this shift is still easier said than done even if the health of business and society is at stake. As Dan Hill pointed out, mental models “are either springboards or cage” and indeed the shareholder capitalism has managed to create a very effective cage, not only operationally but also creatively. Just consider how difficult it has been for us to imagine what does it look like to have a for-profit organization that considers sustainability not just alongside profits but before them and does so with a clear urgency in mind.
No company is fully exercising the awakened sustainability mindset as of now. However, with the growing signs that the end of sustainability-as-usual is in sight and the pandemic acting as a catalyst for change 2022 could be the year in which awakened sustainability starts moving from being an unthinkable proposition to a sensible one.
Signals of a sustainability-first mindset in 2022
So, how might a sustainability-first mental model look like in practice? How does it translate to the life of business in reality? What should we look for this year? While there is no one pathway and of course, there will be questions about what sustainability actually stands for (my POV is reflected in the configuration of awakened sustainability’s content and the context) I want to share five areas where I hope to see stronger signals of a sustainability-first mindset I hope to see in 2022. Please note that these signals reflect the “what”, not the “how we get there” of a sustainability-first mindset, which is presented in my book and I’ll discuss further in a separate piece.
1. Value creation
When it comes to value creation, sustainability-as-usual has been OK with companies making business with anyone interested in buying services or products from them. In 2021 we saw a growing pressure, both internally and externally, on companies to end their business relationship with fossil fuel companies given the part these companies play in obstructing meaningful climate action. This is an example of a sustainability-first mindset, where companies put values before profits and make a clear case that they are willing to provide services only to those who are not trying to slow or block progress on climate action. In 2022 I hope to see a significant expansion of the number of companies that refuse to do business with companies that use predatory delay tactics and play a role in obstructing progress on climate.
Sustainability-as-usual has also been OK with business models that are degenerative in essence, or as Prof. Gidon Eshel described it in reference to McDonald’s: “a business that is fundamentally at odds with the Earth’s integrity,” as long as these companies try to show some progress, no matter how incremental it is. A sustainability-first mindset will demand companies to address their business model at the core, not just at the edges, moving from value creation based on degeneration to one based on regeneration. In 2022 I hope to see at least one large company such as McDonald’s or Coca-Cola addressing its degenerative ‘elephant in the room’, whether it’s the use of beef in the case of McDonald’s or selling sugary drinks in single-use bottles in the case of Coca Cola.
“In every company now there is a Greta Thunberg,” former Unilever CEO Paul Polman suggested, referring to climate activist Greta Thunberg. I concur with this notion as well as with the trajectory that Polman and Andrew Winston suggest in their book Net Positive: “Companies soon will find they have more than one Greta inside the organization.” However, this is not enough. A sustainability-first mindset is about having Gretas in positions of power, where they have an influence on the organization’s highest-stakes decisions, i.e. the C-Suite and the Board of Directors. In 2022 I hope to see a growing number of companies appointing at least one Greta like-minded person to their C-Suite and Board of Directors.
In addition, companies want to be more intentional about bringing people who prioritize sustainability on board. Jim Collins suggested in Good to Great a lesson that could also be applicable here: “The executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.” Sustainability-first mindset requires a more proactive approach from organizations to ensure their “bus” is filled with people who understand the need to prioritize people and the planet over profit maximization. In 2022 I hope to see more companies putting more emphasis on sustainability mindset in their recruitment efforts and not just for sustainability-related positions.
In a state of sustainability-as-usual companies do some efforts occasionally to amplify the positive impact they want to create, for example by working with their suppliers and customers to reduce their carbon footprint. A sustainability-first mindset will address these opportunities more strategically in recognition that companies are as sustainable as their ecosystem is. It requires companies to unveil opportunities across their value chain and beyond. In 2022 I hope to see impact amplification becoming a key component of sustainability strategies with companies using their resources to support and incentivize stakeholders, especially suppliers and customers.
Sustainability-as-usual allows for companies to claim they are sustainability leaders while they support organizations and politicians that fight against climate regulation (or even deny climate science) and/or help weaken democracy. A sustainability-first mindset demands a more holistic approach in consideration of companies’ impact on their institutional environment, demanding them to act more responsibly on all fronts. Recognizing that you can’t have a healthy company in an unhealthy environment I hope to see in 2022 a critical mass of companies stop supporting and donating to bad actors whose efforts jeopardize the health of society and the planet.
Sustainability-as-usual is fine with innovation that generates incremental results. A sustainability-first mindset isn’t. It requires a context-based approach, which looks to generate meaningful changes that challenge the unsustainable status quo at its core, not just on the margins. Companies need to move from incremental to radical innovation when it comes to sustainability, echoing John Elkington’s Project Breakthrough’s vision: “instead of pursuing incremental goals, we need to start chasing goals that will have 10x or 100x the impact on anywhere between a million and a billion people.” In 2022 I hope to see more companies that take the “10x rather than 10% impact” approach when it comes to sustainable innovation.
In the sustainability-as-usual world most innovation results in products and services that are somewhat better for the environment, but are usually also more expensive. Consider, for example, a pair of Levi’s “circular” 501 jeans that is 42% more expensive than a regular 501. A sustainability-first mindset is very clear: Affordability is an integral part of any sustainability value proposition (consider the examples of Algramo and Zero Grocery). Thus, if an innovation is not more affordable it’s not more sustainable as truly sustainable solutions should be accessible for everyone. In 2022 I hope to see more innovations that are not just far better for the planet, but also more affordable.
Sustainability-as-usual thrives on complex and vague narratives, which strangely enough are always presented with a clear sense of certainty that the strategies and practices they embody are the right way to move forward, no matter how little sustainable value they actually produce. Just look at the first pages of almost every sustainability report and you’ll find plenty of examples there. Other examples can be found in the discourses on ESG and the circular economy, not to mention the Business Roundtable statement on the purpose of a corporation.
The sustainability-first mindset moves beyond the blah, blah, blah noise, looking to develop and promote sustainability narratives that are honest, clear (adopting a KISS approach), and meaningful. Instead of CEOs that throw at you sustainability jargon with a lot of confidence and little substance, the sustainability-first mindset embraces CEOs like Patagonia’s Ryan Gellert who is not afraid to publicly struggle with questions around the tension between growth, profits, and impact. It demands companies to become truly transparent, even when it’s difficult, and help disseminate sustainability narratives that people can relate to and find meaningful. In 2022 I hope to see more companies embracing narratives that are real, clear, and exciting. After all, why should it be that hard?
Best wishes for 2022!
Raz Godelnik is an Assistant Professor of Strategic Design and Management at Parsons School of Design — The New School in NY, where he serves as an Associate Director of the Strategic Design & Management BBA Program. He is the author of Rethinking Corporate Sustainability in the Era of Climate Crisis — A Strategic Design Approach, which was published by Palgrave Macmillan in July 2021. For more information on his work see Sandbox Zero. Feel free to connect on Twitter and LinkedIn.