How business can act as a force for good

New year, new approaches – it's the perfect time to rethink many things we take for granted. Shakespeare’s advice, “Brevity is the soul of wit”, is telling: humanity will prosper if we can keep it simple. Indeed, today we live under the influence of the KISS principle: “Keep It Simple, Stupid.”

Taken to the extreme in the search for efficacy, this way of thinking has created a perceived complexity in our daily lives. Human norms have evolved, and we have created an artificial, synthetic view of our planet that has become a guiding principle. In an attempt to conform to this axiom, humanity has continuously attempted to specialise. Complexity, chaos and unruly nature have been made to yield to our human approach. Nowhere is this more apparent than in business and commerce.

Over the past 50 years, we have also lived under the influence of another closely related norm: “the purpose of business is business”. In other words, profitability matters more than impact. I disagree, and I suggest it is time to revisit this view while arguing the case for complexity.

I firmly believe in business as a force for good, as long as its purpose is not merely to make money but, more importantly, to serve the community and satisfy societal needs sustainably.

Doing this requires properly valuing the impact of economic activity on natural, social and human capital. Our economic systems have failed to do so for too long, instead obsessively prioritising short-term financial gain. Yet financial prosperity can only be short-lived if it comes at the expense of social systems, human health and nature.

It is time to forge new decision-making norms that properly value nature, people and society. In a business context, balance sheets need to account for the social, human and natural capital alongside cash.

Choosing green

The devastating impact of the global COVID-19 pandemic demonstrates what happens when we ignore the value of natural and social capital. Nature is in freefall, and there is little doubt its destruction makes us increasingly vulnerable to new infectious diseases that emerge when intensive agriculture, deforestation and land conversion result in pathogens spilling over from animals to people.

In reality, human, animal and environmental health and well-being are interdependent. Nature is Earth’s life support system. And yet, we are degrading natural systems faster than nature can replenish and restore them, putting the estimated $44 trillion in economic value generation dependent on nature and its services at risk.

Governments and the private sector have a choice: continue propping up outdated, polluting industries or seize the opportunity to invest in low-carbon development and nature-based solutions that harness ecosystems to address key societal challenges such as food security, flood mitigation and climate change.

A green recovery package will deliver superior returns over traditional fiscal stimuli. For instance, a recent study by E&Y estimates that every $1 million spent on renewable energy and exports will create 4.8 full-time jobs in renewable infrastructure or 4.95 jobs in energy efficiency. By comparison, $1 million spent on fossil fuel projects will create just 1.7 full-time jobs.

Some decision-makers in business and government recognize the opportunity, but many more must embrace it for a truly sustainable recovery. The Capitals Coalition, for example, recently released guidance for the food system to shape a sustainable sector by enabling actors throughout the food value chain to identify, value and manage dependencies as a means to impact on natural, social, and human capital.

The global food system depends on healthy natural ecosystems. Yet land conversion for agriculture has caused 70% of global biodiversity loss and half of all tree-cover loss, affecting not only agri-businesses but also workers, local communities, food security, public health and the climate.

Transforming the food system is of paramount importance for a sustainable future. Positive intervention can generate benefits that cascade through nature, society and the economy.

Asset allocation and risk management

By identifying the true breadth of value across an economy, sector or company supply chain, a capital approach sets the foundation for adopting complementary tools and initiatives. These may be science-based targets enabling companies and cities to operate within planetary limits, landscape and jurisdictional approaches supporting responsible production and commodity sourcing, or climate- and nature-related financial disclosure shaping nature-positive investment and economies. These tools and initiatives are all needed to drive the overall transition to circular and regenerative economies.

A capital approach can also inform how we address other contemporary challenges, whether supporting poverty alleviation and tackling deforestation, or recognising the rights, knowledge and stewardship of Indigenous Peoples and local communities. The recognition of these rights must be a fundamental part of a new global agreement on nature and an integral part of all nature conservation.

What matters most

But is the wider business community ready to accept that it is not how we spend money but how we make it that matters most?

Citizens and customers expect change. The vast majority of people want to see a fairer and more sustainable world post-COVID-19. Given the right incentives and guidance, most are willing to make healthier, more sustainable lifestyles choices.

To achieve all these desirable outcomes, we must make a fundamental system change regarding how we choose to live together. Of course, we cannot wish away all physical realities, but we can redefine the norms of our relationship with nature and with each other. Our current system is dangerously fragile and unfit for purpose. A virus that we might never eradicate has brought us to a standstill.

The current situation shows us that dominance based on oversimplification and specialisation is no longer appropriate. The future belongs to a dynamic collaboration between humans, nature and the planet. This is a formidable opportunity, and we are ready to seize it. In the post-COVID-19 reset, we cannot go back to business as usual. We must heal our broken relationship with nature and shape a better future built on justice, equity and inclusiveness.

Let’s seize the moment!