Top 7 Business Sustainability Challenges in 2020

7 Top Business Sustainability Challenges in 2020

1. Business goals that contribute to the U.N.’s Decade of Action on the SDGs

   We need goals that are closer to being transformational and that inject purpose into more company activities. Our company’s new goals include a science-based target for CO2 reduction and an expanded circular economy strategy.  A particular challenge is emissions reduction in the supply chain (Scope 3): it’s both complex in terms of analysis and extraordinarily challenging in the implementation.

   Recommended resource: We are relying upon resources from the Science-Based Targets Initiative, a cross-sectoral effort to help companies set emissions-reduction targets that will comply with the Paris Climate Agreement. Resources include a great start for benchmarking exercises, a basic overview of Scope 3, and a place to begin estimations.

   By Bruce Klafter, Vice President, Corporate Social & Environmental Responsibility, Flex, United States.

2. Sustainability accounting

   In 2019, accounting became part of the solution to grand challenges. Chief Financial Officers worldwide called for revised accounting standards to account for what had long been invisible. Consequently, in 2020, the European Union announced that they will write binding new non-financial accounting standards, raising them to the same importance level as current financial accounting standards. The trend to follow will be the rise of the Chief Value Officer, who considers financial and non-financial value.

   Recommended resource: Palmeiro, L., & Gibassier, D. 2020. Your company’s next climate leader is…the CFO. Harvard Business Review.

   By Delphine Gibassier, Associate Professor, Audencia Business School, France.

3. Finding circular economy profits

   We need to show the world that sustainable business is successful business. One way to do that: for a given set of businesses, get information on the inputs they need and what they produce that they currently throw away. Then we can find loops to close in ways that would make them more profitable.  Once their rivals see them benefitting, the rivals will follow.

   Recommended resource: Contact us at RIT’s Golisano Institute for Sustainability with your circular economy challenges.

   By Clyde Eirikur Hull, Professor, Rochester Institute of Technology (RIT), United States.

4. Brazilian action on climate change

   How do I make Brazilian business leaders understand that business as usual is not an option, that no one will make a profit on a dead planet? Maybe my language is inappropriate, but that is indeed my main concern. I believe that many of the declarations from Brazilian leaders regarding ESG factors are simply greenwashing. And we have an aggravating factor: our president, Jair Bolsonaro, is a denialist of climate change and all the others factors related to sustainable development.

   Recommended resource: Many articles and books are helpful, but none helped me to deal with denialism.

   By Aron Zylberman, Executive Director, Instituto Cyrela, Brazil.

5. New ideas of prosperity that replace growth

   Why important: If we are not able to find alternatives to the growth paradigm, many other business sustainability concepts, such as the circular economy, will fail.

   Conventional economic growth needs an increasing amount of globally-sourced inputs. Research shows that growth has ‘eaten up’ efficiency gains. The economy may grow more efficiently, but we still use more resources and emit more GHGs and other pollutants.

   We have to consider alternatives to growth such as de-growth and prosperity. If we could solve the inequitable distribution of income that is created by new technologies, it would reduce the need to grow in order to create new jobs.

   Recommended resource: Jackson, T. 2016. Prosperity without growth: Foundations for the economy of tomorrow: Taylor & Francis.

   By Olaf Weber, Professor, University of Waterloo, Canada.

6. Social justice around climate change

   Rising seas, floods, and prolonged droughts will cause more suffering for poor people, through landslides, disease, and migration.

   How can business help avoid this? We need greater awareness that we live in the same world and all things are connected. Businesses can combat all kinds of discrimination, and rethink the absolute belief in free markets. These problems and solutions are complex, but we have frameworks to follow, including the Sustainable Development Goals and the Global Reporting Initiative.

   Recommended resources: The Task Force on Climate-related Financial Disclosures Status Report 2019 provides guidance on informational disclosure. A message from the United Nations Global Compact urges us to action.

   By Estela Kurth, Director, ekmkt, Brazil.

7. Creating an economy that works for everyone

   I see two key steps. First, we need to increase equity and inclusion. Involve stakeholders, not just shareholders, in decisions. Organizations will become more successful by better understanding their operating environment and potential opportunities to create value for society.

   Second, let’s think about resources more broadly. Currently, accounting only recognizes financial capital, so we see people, relationships, nature, and education as cost centers. A more integrated understanding of resources would enable us to reconnect human, natural, social, and financial aspects of the economy to synergistically produce prosperity.

   Recommended resource: Social accounting, particularly Integrated Reporting, is a way to build equity and consider resources broadly. The International Integrated Reporting Council’s recent report details integrated thinking and strategy.

   By Elizabeth Castillo, Assistant Professor, Arizona State University, United States.

Priorities Identified by NBS’s Advisory Committees

In January, we started the sustainability priorities conversation by talking to NBS Advisory Committee members. We asked which sustainability challenges they were prioritizing in 2020. See what they said.

Last Year’s Challenges

Curious how this year’s issues compare to last year’s? Check out the challenges that NBS identified as being critical for 2019.