News - 13 June 2012
13 Jun 2012
3rd Global Forum: Businesses on Unsustainable Pathways Are Set to Fail, Say Top International Business LeadersRead More
New research published for the Rio+20 Summit by Ashridge Business School and the International Business Leaders Forum (IBLF) advises that companies must recognise environmental and social issues as critical to long-term business success, and warns that those that aren’t are missing the key value creation strategy of the next decade.
As businesses continue to feel the pinch from tough economic conditions, international business leaders assert that sustainability must be a priority for all businesses. The UN study Leadership in a Rapidly Changing World: How Business Leaders are Reframing Success, conducted for the 3rd Global Forum for Responsible Management Education at Rio+20, involves Chairs and CEOs, past and present, from some of the world’s most influential businesses.
The report also reveals that whilst many business leaders are already playing a central role in society in mainstreaming the issue of sustainable development as a way of living and doing business, the skills required by top executives for success are rapidly shifting. Top executives are now playing a new collaborative role inside political processes at all levels, rather than just lobbying from the outside to protect short term financial interests.
At the first Rio Summit in 1992, where world leaders set in train a host of agreements on global issues such as climate change, biodiversity and human rights, business leaders were at the margins. But in the intervening 20 years a new generation of business leaders has emerged who put addressing global challenges at the heart of how they create value, and who are collaborating with governments, NGOs, and international agencies marking a radical shift from the past.
Sir Stuart Rose, former Executive Chairman and CEO of Marks & Spencer, stated: “The 100 largest financial entities in the world used to be governments. Now over 50 of them are businesses, so suddenly the whole scale in the world has changed, and businesses have become much more important than they used to be.”
“CEOs aren't just leaders within their business any more. They also play a role leading collaboratively with others in all kinds of places, such as supply chains or government regulation. M&S has been doing this around sustainable fish sourcing, health and nutrition, waste and recycling and sustainable livelihoods in supply chains. Today's business leaders need to pay attention, because there is a group of frontrunners who are redefining the rules for everyone else.”
Companies are innovating and seizing new opportunities that drive business and investor success while delivering societal value, such as helping to lift people out of poverty through social enterprise or developing green products and processes.
Unilever’s Paul Polman, for example, is proactively lobbying globally for legislative change that strengthens policy on low carbon energy generation, waste and recycling infrastructure, public health in developing countries and international trade policy that favours certified sustainably sourced commodities.
Elizabeth Thompson, UN Assistant Secretary General and Executive Coordinator of Rio+20, stated: “Sustainable development remains a momentous challenge and overcoming the many systemic barriers that exist requires a concerted effort by all, including business. This report provides evidence of how business leaders are seeing their roles change to partner with governments, civil society organisations and the UN System to lead systemic change at the global level, yield greater returns on investment and enhance shareholder value.”
For business leaders, collaboration, ingenuity and experimentation are essential for business, as is the courage to move from the status quo toward a fully sustainable future.
Co-author of the report, Matt Gitsham, Director, Ashridge Centre for Business and Sustainability, said: “We’ve seen a real shift over the last decade. The conventional view is that political leaders are responsible for dealing with societal challenges. But as the scale and influence of business has grown, business leaders have begun to embrace a much more explicitly political role on the global stage, and increasingly see collaborating to address the world’s big challenges as core to how they create value, not a distraction.”
“Rio+20 is a unique chance to further move the corporate sustainability agenda to global scale, but it will require government and business to deliver. Some business leaders still think that it’s not their job to focus on the bigger issues going on in the world. But their peers at the top of a growing proportion of the world’s most influential businesses are quietly reshaping and redefining tomorrow’s business landscape and what it means to succeed as a leader. If you’ve failed to spot this you’re missing out on the most important value creation strategy of the next decade.”
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The IBLF and Ashridge Business School report Leadership in a Rapidly Changing World: How Business Leaders are Reframing Success was conducted for the 3rd Global Forum for Responsible Management Education at Rio+20. Interviewees include Neville Isdell, former Chairman and CEO The Coca Cola Company, Paul Walsh, CEO Diageo, Lord Browne, former CEO BP, John Brock, Chairman and CEO Coca Cola Enterprises, Sir Stuart Rose, former Executive Chairman and Chief Executive Marks & Spencer, Sir Mark Moody Stuart, former Chair Shell and Anglo American, Carolyn McCall, CEO easyJet and Frederick Chavalit Tsao, Chair IMC Pan Asia Alliance.
The Principles for Responsible Management Education (PRME) were developed in collaboration between the United Nations Global Compact and representatives of business education. The Six Principles were first unveiled at the UN Global Compact Leaders Summit in July 2007. There are currently over 450 signatories to the PRME initiative. www.unprme.org
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