EVENT - CGF SUMMIT 2022: CHANGE IS ON THE WAY
For yet another year, I had the chance to join the fabulous crowd of CEOs and leaders at the CGF Summit in Dublin. I decided to found Goodness&Co in that same Board room a couple years ago based on the conviction that we were at a tipping point. The question was not any more about the WHY, but about the HOW to make it happen. the shift from purpose to practice is finally happening.
CEOs are ready to make it happen collectively
My first take-away relates to leader’s readiness to act. CEOs are now fully in the game. Not only they are aware of the urgency but are also fully engaged in driving progress and meeting ambitious targets.
CEOs are convinced and they are willing to act.
We are feeling that most of these leaders agree on the need to set purpose at the heart of their business model. The sustainability agenda is now part of the new normal. This actually “doable” as we have no other option.
“We need to collaborate beyond business to tackle the most pressing issues”, Nicolas Hieronimus, CEO L’Oréal.
Many leaders have also emphasized the added value of collaboration to scale impact. Running in its own lane is over, business need to create synergies for more industry-wide collaboration to tackle issues that need systemic change.
Several examples come to mind. L’Oréal is acting as a catalyst of change with a new Beauty consortium to agree on Ecoscore for personal care products. Pepsico joins forces with retailers on plastics packaging waste and AS Watson works with manufacturers on consumer education.
In any case, we all agree leadership is required to act. Doing good business is now all about doing sustainablebusiness. CEOs can choose to embrace this revolution or be left behind. Their courage is required. In this decisive decade, they have to be bold and accelerate the necessary changes so their companies start respecting planetary limits. Only those with a positive impact on society and the environment will thrive.
Leadership + courageous decisions + collaboration= way to success. James Quincey, CEO The Coca-Cola Company
Purpose must be set at the heart business
More than 75% of young people express distrust towards companies, asking for coherence between “saying” and “doing”.
Encouragingly, many business leaders have already embraced purpose at the heart. Indeed, most companies have made environmental and societal commitments. It is about making it happen
How can CEOs balance purpose and profit? Not so easy, but we need to get out of the tradeoff mindset.
First and foremost, they need to be brave. To drive transformational change requires ambition. Business leaders need to break out of the status quo, dream big and act on it. After all, change is happening. It’s unavoidable. Success will be determined by a company’s ability to evolve rapidly into a radically different version of itself. The biggest risk is not to take a risk.
Then they need to set purpose at the heart of their business model as a strategic compass for business decisions, performance review, investments, or compensation. They must also engage their entire eco-systems, employees and operations, the supply-chain and the partners. Leading companies such as Mars, Ikea or P&G use their sustainability strategies as strategic compass for responsible growth. It’s integrated, it’s understandable and it’s ambitious.
To me, the business case is already there. Unilever CEO Alan Jope affirms meaningful brands grow between 2 times and 6 times faster than others. He said that Unilever has taken out about $1.2 billion of cost thanks to sustainable sourcing. Pepsisco CEO Ramon Laguarta and others said that achieving sustainability goals would ultimately save businesses money,
As crisis is becoming the new normal for business purpose IS the differentiator.
What are the next frontiers?
We all agree we have no choice any longer, but is there a fast-track? Some thoughts around paths to accelerate the shift:
1. Walk the talk with your own people
For businesses the challenge will not only be to engage their workforce but also to educate them about the challenges we face. It’s about giving them the tools to become purpose activists and take an active role in the implementation of the company environmental and social targets. We know that 60% of people chose to work for a company due to its values and beliefs, we now need them to engage for real.
Incentivizing your employees is also the key to success. We’ve heard from Pepsico and Mars that it is instrumental to drive engagement as Mars is incentivizing its top 300 leaders based on sustainability numbers. Setting sustainability goals as a part of the performance review of your leadership teams will need to be integrated to become the new normal.
2. Engaging consumers is critical
“The consumer is king, let’s worship the king” says Malina Ngai, CEO at AS Waston. In my opinion it is not only about meeting the demands of consumers in terms of service and sustainability. It is about empowering consumers for healthier and more sustainable choices.
It is also about offering them the opportunity to join a community and serve a cause by purchasing a product/service. A practical example might be linking the act of purchase to a cause such as reforestation. Sheba has been engaging with consumers on animal cause and Mars on coral reef conservation, resulting in a sales lift.
3. Partnerships & coalitions for greater impact
It is almost becoming the new normal. This is one of the areas where I observe a real shift since the last edition of the summit. All manufacturers understand it is of utmost importance to collaborate with retailers on meaningful initiatives, be it on circular economy, supply chain optimization, consumer education or innovation. The question is now how to drive it long-term?
We observe new rules in the game, it is about collaborating beyond business and competition, changing the rules of the game together for a greater impact. It is about being greater that the sum of the part. I am thinking particularly to the CGF Plastic Coalition that has been working successfully and partnering with key organizations such as the Ellen McArthur Foundation.
4. Creating more with less resources
All leaders agree that it will be the successful business model of the future. It will not necessarily trigger most cost but manufacturing and consumption will need to be thought differently. Not to forget than less resources might also trigger more profit.
This is a journey for all of us and some are paving the way for new ideas. Mars’ Chief Procurement and Sustainability Officer Barry Parkin suggests setting a temperature for each business as main KPI reflecting their footprint. We agree that we must focus on what matters and GHG is the most urgent battle.
5. Be a change agent!
Finally, boldness is needed. Pioneers have opened the way with disruptive approaches mixing vision and courage. It is now about change, there is no silver bullet, it is about standing for positive impact at scale; harnessing the power of people on the journey.
At Goodness & Co, we want to ignite positive change together and ask the right questions to CEOs and leaders: What do you want to be remembered for? What will be your contribution to society? How fast can you drive change in your organization? Who are the partners that can help you on that journey?
CEOs have no choice but to embark in the journey and set sustainability as a performance driver.
We’ve heard it from Pepsico “ESG must be part of the core strategy, those who will not deliver won’t exist in 2030”.