{"id":25426,"date":"2021-07-02T08:56:57","date_gmt":"2021-07-02T08:56:57","guid":{"rendered":"https:\/\/wealinternational.com.br\/?p=25426"},"modified":"2021-07-20T12:32:48","modified_gmt":"2021-07-20T12:32:48","slug":"seven-sustainability-trends-to-watch-in-2021-by-natalia-olynec","status":"publish","type":"post","link":"https:\/\/wealinternational.com.br\/en\/seven-sustainability-trends-to-watch-in-2021-by-natalia-olynec\/","title":{"rendered":"Seven sustainability trends to watch in 2021 (by Natalia Olynec)"},"content":{"rendered":"

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The <\/span>COVID<\/span>\u00a0pandemic\u00a0<\/span>disrupted supply chains, business models and\u00a0<\/span>millions of<\/span>\u00a0<\/span>livelihoods<\/span>. That shock\u00a0<\/span>reinforced the view that a long-term approach<\/span>,<\/span>\u00a0<\/span>centered<\/span>\u00a0around environmental, social and governance principles<\/span>, i<\/span>s increasingly important<\/span>\u00a0for a sustainable future.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

Business executives, policymakers and investors are paying heed to both the risks and, increasingly, the opportunities connected to\u00a0<\/span>the\u00a0<\/span>social and environmental impact<\/span>\u00a0of business<\/span>.\u00a0<\/span>\u00a0<\/span><\/p>\n

New\u00a0<\/span>regulations<\/span><\/a>, particularly in Europe<\/a>,\u00a0<\/span>require<\/span>\u00a0<\/span>that\u00a0<\/span>companies\u00a0<\/span>demonstrate their impact<\/span>\u00a0on society<\/span>.\u00a0<\/span>In parallel, g<\/span>lobal\u00a0<\/span>government and busines<\/span>s<\/span>\u00a0<\/span>leaders\u00a0<\/span>will\u00a0<\/span>accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change<\/span>\u00a0<\/span>at\u00a0<\/span>the United Nations Climate Change Conference\u00a0<\/span>COP 26<\/span>\u00a0in November in Glasgow<\/span>.<\/span>\u00a0<\/span>Firms\u00a0<\/span>are making bold moves pivoting their businesses to more sustainable products and services<\/span>, such as\u00a0<\/span>GM<\/span>\u2019<\/span>s commitment<\/span><\/a>\u00a0to\u00a0<\/span>shift entirely to\u00a0<\/span>zero-emissions car models<\/span>\u00a0<\/span>by\u00a0<\/span>2035<\/span>.\u00a0<\/span>Investors are rewarding this shift\u00a0<\/span>as<\/span>\u00a0inflows to\u00a0<\/span>funds\u00a0<\/span>screened for<\/span> Environmental, Social, and Governance (ESG) <\/span>factors<\/span>\u00a0outpaced traditional fund returns in 2020, according to\u00a0<\/span>Morgan Stanley<\/span><\/a>.<\/span>\u00a0<\/span><\/p>\n

On the cusp of accelerating sustainable business transformation<\/span>\u00a0during the\u00a0<\/span>Decade of Action<\/span><\/a>\u00a0on the UN Sustainable Development Goals,\u00a0<\/span>I asked my colleagues at IMD to identify<\/span>\u00a0key trends that will drive\u00a0<\/span>sustainable business\u00a0<\/span>in 2021 and beyond.<\/span>\u00a0<\/span><\/p>\n

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Transition to a circular economy<\/h2>\n

Knut Haanaes<\/strong><\/a>, Professor of Strategy and Lundin Chair of Sustainability<\/em><\/p>\n

The circular economy is a beautiful idea, first made concrete by Ellen MacArthur. How do we build economic systems that eliminate waste, regenerate, and use all resources, including energy and materials, to their fullest? The trend is strong, but still at an early stage. We are learning, applying the idea of circularity across industries, and seeing successful examples.<\/p>\n

The US clothing company Patagonia says: \u201cPut it in the mail, not in the landfill.\u201d Please don\u2019t throw away clothes; fix them, reuse them, and give them away to others or eventually find new applications. That is circularity.<\/p>\n

The Belgian materials company Umicore has a similar position on metals. Instead of mining, let\u2019s recycle. The company has gone from mining to \u201curban mining.\u201d Take the example of a mobile phone. Umicore will recycle the whole device, handset, and battery. Circularity is the approach the company takes on every material it handles. These kinds of examples point to the future, but there is still a very long way to go.<\/p>\n

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Shifting supply chains<\/h2>\n

Carlos Cardon<\/a>,\u00a0Professor of Strategy and Supply Chain Management\u00a0<\/em><\/p>\n

How is the massive change to omnichannel affecting sustainability? How can we be where the consumer wants our products<\/span>,<\/span>\u00a0at the time she\/he wants our products<\/span>,<\/span>\u00a0while increasing the sustainability of our value chain? An emerging response is to become more regional and less global, making the supply chain shorter, more sustainable, more resilient and with a better impact on the regional and local economy.\u00a0<\/span>\u00a0<\/span><\/p>\n

Another answer down the chain is to move from big distribution\u00a0<\/span>centers<\/span>\u00a0to what is called \u201cmicro-fulfi<\/span>l<\/span>lment\u201d<\/span>\u00a0<\/span>or<\/span>\u00a0<\/span>micro warehouses<\/span>, which<\/span> are more sustainable and closer to the consumer.\u00a0<\/span>\u00a0<\/span><\/p>\n

Finally, an unexpected<\/span>\u00a0development<\/span>\u00a0is that the big waves on changing consumer trends are creating lack of stock, but also massive stock<\/span>\u00a0<\/span>piles of produce with low demand<\/span>. T<\/span>he\u00a0<\/span>challenge<\/span>\u00a0is how to adapt our supply chains to those massive waves avoiding over stock, and\u00a0as a consequence, wasted products.<\/span>\u00a0<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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Sustainable finance gets its teeth<\/h2>\n

Vanina Farber<\/a>, Professor of Social Innovation and\u00a0elea\u00a0Chair for Social Innovation\u00a0<\/em><\/p>\n

The<\/span>\u202f<\/span>EU Sustainable Finance Disclosure Regulation<\/span><\/a>\u202f<\/span>(SFDR) is a set<\/span>\u00a0<\/span>of EU rules that encourages investors and corporations to reflect on both the positive and adverse impacts of their activities. The first phases of the regulation\u00a0<\/span>went into<\/span>\u00a0effect on\u00a0<\/span>10\u00a0<\/span>March<\/span>\u00a0and focus on pre-defined metrics to assess the environmental, social and governance (ESG) outcomes of the investment process. As the name suggests, more emphasis will be placed on disclosure, including new rules that must identify any harmful impact made by investee companies. This will require both investors and firms to consider how to measure their sustainability, how to explain it and ultimately\u00a0<\/span>to\u00a0<\/span>understand how they can build a theory of change around positive impact.\u202f<\/span>\u00a0<\/span><\/p>\n

The<\/span>\u00a0next step will see\u202fcollaboration between financial sector and corporate\u202fleaders\u202fto\u202fapply ESG-verifiable data assets to leverage new opportunities and finance the transition to more just,\u00a0<\/span>inclusive<\/span>\u00a0and sustainable business models<\/span>.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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Bridging\u00a0the\u00a0digital responsibility\u00a0knowing-doing\u00a0gap<\/h2>\n

Michael Wade<\/a>,\u00a0Professor of Innovation and Strategy\u00a0and\u00a0Cisco Chair in Digital Business Transformation\u00a0<\/em><\/p>\n

When\u00a0<\/span>it<\/span>\u00a0comes to digital, \u2018sustainability\u2019 is unfortunately a misleading term. Most sustainability departments within organizations pay little attention to the digital world. \u202fYet, when it comes to the broader focus on \u2018responsible\u2019 practices, digital plays a central role. Cyber-security, AI ethics, digital diversity and inclusion, respect for personal privacy, and the equitable sharing of digital economic value all fall under the topic of responsible practices. We refer to this combination as Corporate Digital Responsibility (CDR).\u00a0<\/span>\u00a0<\/span><\/p>\n

A large chasm has\u00a0<\/span>opened up<\/span>\u00a0between digital responsibility \u2018principles\u2019 and the \u2018practices\u2019 required to implement them. A few forward-looking companies, like Mastercard, are building process and governance to manage CDR effectively.\u00a0<\/span>However<\/span>, most organizations are far behind.<\/span>\u00a0<\/span>This year we<\/span>\u00a0<\/span>will see an increased focus on CDR as digitization becomes more embedded in corporate activities. We will see an important shift from \u2018responsibility as compliance\u2019 to \u2018responsibility as a source of competitive differentiation\u2019.<\/span>\u00a0<\/span><\/p>\n

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Calculating the social cost of greenhouse gases<\/h2>\n

Karl Schmedders<\/a>,\u00a0Professor of Finance\u00a0<\/em><\/p>\n

In January 2021, the new U<\/span>.<\/span>S<\/span>.<\/span>\u00a0administration revived a specific tool\u2014the \u201csocial cost of greenhouse gases\u201d\u2014into the decision-making progress of the U<\/span>.<\/span>S<\/span>.<\/span>\u00a0federal government. This cost figure\u00a0<\/span>combines climate science and economics to help\u00a0<\/span>government\u00a0<\/span>agencies and the public\u00a0<\/span>to\u00a0<\/span>understand the benefits of reducing greenhouse gas emissions. The metric\u00a0<\/span>estimates<\/span>, in dollars, the long-term damage done by one ton of greenhouse gas emissions.<\/span>\u00a0This estimate will not only influence\u00a0<\/span>the\u00a0<\/span>U<\/span>S<\/span>\u00a0government\u2019s purchases, policies on pollution controls, and investments in highways and pipelines, but it will also affect international carbon markets and serve\u00a0<\/span>as<\/span>\u00a0<\/span>a<\/span>\u00a0benchmark for internal carbon pricing schemes in private\u00a0<\/span>industry.<\/span>\u00a0<\/span><\/p>\n

Companies<\/span>\u00a0such as Microsoft, which currently uses an internal carbon price of $15, will sooner or later have to use significantly higher carbon prices. The corporate finance function must plan for rising carbon costs in its evaluation of net present values or internal rates of returns for the evaluation of new investments. Internal carbon prices will have dramatic effects on the cost-effectiveness of many companies\u2019 supply chains. We will see a strong push towards local sourcing in the coming years.<\/span>\u00a0<\/span><\/p>\n

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Family businesses lag in shift to sustainability<\/h2>\n

Peter Vogel<\/a>,\u00a0Professor of Family Business and Entrepreneurship and\u00a0Debiopharm\u00a0Chair for Family Philanthropy\u00a0<\/em><\/p>\n

We<\/span>\u00a0tend to believe that owners of businesses\u00a0<\/span>can<\/span>\u00a0make changes in a more agile way than publicly listed companies. In addition, we are witnessing the largest transfer of wealth (and control of businesses) in the history of\u00a0<\/span>hu<\/span>mankind<\/span>. The<\/span>\u00a0next generation in charge seems to have a strong intrinsic desire to make a difference \u2013 in their businesses, their investment activities and as entrepreneurs.\u00a0<\/span>\u00a0<\/span><\/p>\n

However,\u00a0<\/span>while<\/span>\u00a0sustainability has been part of discussions in the family business space for decades,\u00a0<\/span>a\u00a0<\/span>broad-base transformation is not yet\u00a0<\/span>evident. G<\/span>iven that roughly 2\/3 of all businesses in the world are family-controlled, we need large-scale adoption of a sustainability mindset\u00a0<\/span>to make a difference.<\/span>\u00a0<\/span><\/p>\n

Publicly<\/span>\u00a0listed companies, with outside shareholder pressure,\u00a0<\/span>will be<\/span>\u00a0forced to transform a lot faster than fully privately owned organizations.\u00a0<\/span>New CEOs of public companies have\u00a0<\/span>more\u00a0<\/span>freedom to shift strategy.<\/span>\u00a0In a traditional family business, the old CEO tends to \u201cretire\u201d to become chairman. While on paper that means stepping down from day-to-day responsibilities<\/span>, it<\/span>\u00a0<\/span>often\u00a0<\/span>means \u201cbusiness as usual<\/span>.<\/span>\u201d<\/span>.<\/span>\u00a0Hence, family businesses are running at risk of\u00a0<\/span>falling behind.\u00a0<\/span>\u00a0<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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Extending personhood to be inclusive of people, corporations, and nature<\/h2>\n

Susan Goldsworthy<\/a>,\u00a0Professor of Leadership and Organizational Change\u00a0<\/em><\/p>\n

In 2018,\u00a0<\/span>25<\/span>\u00a0youngsters, ranging in age from 7 to 26, supported by human rights organization\u00a0<\/span>Dejusticia<\/span>, sued the Colombian government for their right to a safe environment, focusing on the rights of the Amazon forest itself. The Colombian supreme court granted personhood to the portion of the rainforest within Colombian borders, giving it rights under law.<\/span><\/p>\n

Rivers in New Zealand and India have also been afforded personhood right<\/span>s<\/span>. In 2008, Ecuador became the first country to recognize Rights of Nature in its constitution, within which is a chapter that acknowledges nature in all its life forms as having the right to exist, persist, maintain and regenerate its vital cycles.\u00a0<\/span><\/p>\n

Since the<\/span>19th\u00a0<\/span>century, we have afforded personhood to corporations to confer certain legal rights and protections. Given our ecological challenges, it makes logical sense to extend personhood rights to living systems that are vital for our long-term wellbeing. Working together, corporations and governments have the opportunity and responsibility to accelerate the protection of nature to support the attainment of the UN<\/a><\/span>SDGs. The time to act is now.<\/span><\/p>\n

 <\/p>\n<\/div>\n

Natalia Olynec<\/h3>\n

Head of Sustainability at IMD<\/p>\n

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Natalia Olynec is the Head of Sustainability at IMD, where her work focuses on research, program development, strategy, governance, reporting and advisory. She has worked in sustainability management, consulting and education for more than 15 years.<\/p>\n

Source:https:\/\/iby.imd.org\/sustainability\/seven-sustainability-trends-to-watch-in-2021\/?utm_source=DME&utm_medium=em&utm_campaign=DM-Focused&utm_term=DM-Focused&utm_content=DM-Focused-Insights<\/p>\n

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<\/p>","protected":false},"excerpt":{"rendered":"

The COVID\u00a0pandemic\u00a0disrupted supply chains, business models and\u00a0millions of\u00a0livelihoods. That shock\u00a0reinforced the view that a long-term approach,\u00a0centered\u00a0around environmental, social and governance principles, is increasingly important\u00a0for a sustainable future.\u00a0\u00a0 Business executives, policymakers and investors are paying heed to both the risks and, increasingly, the opportunities connected to\u00a0the\u00a0social and environmental impact\u00a0of business.\u00a0\u00a0 New\u00a0regulations, particularly in Europe,\u00a0require\u00a0that\u00a0companies\u00a0demonstrate their impact\u00a0on […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[17,16],"tags":[68,39,67],"_links":{"self":[{"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/posts\/25426"}],"collection":[{"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/comments?post=25426"}],"version-history":[{"count":2,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/posts\/25426\/revisions"}],"predecessor-version":[{"id":25428,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/posts\/25426\/revisions\/25428"}],"wp:attachment":[{"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/media?parent=25426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/categories?post=25426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wealinternational.com.br\/en\/wp-json\/wp\/v2\/tags?post=25426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}