John Elkington: corporate leader has a political role to play for sustainability and ESG agendas

Considered the father of corporate sustainability, John Elkington created the Triple Bottom Line concept 30 years ago, proposing integrated solutions that can produce positive results in three dimensions: economic, social and environmental. It was the origin of ESG, whose practices also contribute to building companies’ reputation journeys. Since then, problems such as global warming, climate change, the spread of fake news and disinformation, polarization and cyber attacks have increased the challenges and require urgent and innovative actions from companies, governments and society.

O Reputation Feed spoke with Elkington when he was in Porto Alegre, in the third week of March, to participate in the South Summit Brazill. Author and co-author of 20 books, the founder and leader of the consultancy Volans manages to address issues that represent the greatest global risks today and in the near future with kindness, good humor and consistency. Check out the main topics below.

ESG and corporate reputation

“It is true that many companies understand that the ESG agenda can have a good or bad impact on their reputation. And, at least initially, they try to deal with it through government relations and public relations. But if that's where they stop, I think it's a complete and total mistake. Before, it used to be about things like your company profile, how your stakeholders viewed you, and whether your customers were loyal. However, we are seeing that, increasingly, ESG and sustainability agendas are driving structural changes in companies.”

Restructuring in organizations

1. “I worked with Ford for 20 years and I remember Bill Ford (company president and great-grandson of founder Henry Ford) tell me: 'Ford will never split into two companies'. Ford has just split into two, because it needs to have one company to continue its legacy, with vehicles with combustion engines, and another to work with the electric market. Consider that President Joe Biden has announced that he wants half of new cars sold in the United States to be electric by 2032.”
   
2. “Japan, for example, has Nissan and Honda, who hate each other, but are united on one front to work in the electric vehicle market to respond to the Chinese challenge.”
   
3. In Europe, Solvay, a chemical company, also divided into two. The company that makes batteries for electric vehicles and works on fuel efficiency and all that good stuff is significantly better off than the old business model.”

If you fail, admit it quickly

“I believe that the priority of any business is to be honest, open, transparent, being able to take responsibility, and, if you make some kind of mistake, admit it quickly rather than trying to cover it up. It means making it very clear to stakeholders what the company intends to do and achieve over time, in addition to making frequent reports on what it does. If there is progress, explain why. Part of the problem is that there is not enough regulatory pressure.”

Climate change, is there a solution?

“It is possible that we can solve the problem (from climate change). But see that all the civilizations that were before us have collapsed. It is quite possible that we are heading in the same direction, as in science fiction, and have increasingly disastrous results. Individuals can do a number of things to signal that they are angry, and we often see young people taking to the streets to protest climate change. And I think it's quite frustrating, because they're not yet seeing the necessary actions (to face the issue). But I encourage them to keep going, because we have to keep experimenting and innovating.”

Systemic solutions

“The problems we are facing now are systemic. Consumers, investors and voters cannot change everything individually. So they have to do what they can. When people come up with ideas and innovations that can really change things, in a systemic way, we have to support them. You see, for example, mayors being very active in these aspects, because they don't have the same problems that national politicians have. They have a much more defined area to focus on. So I'm optimistic, but we could still collapse.”

To face the climate crisis, the obvious role of companies

"O (paper) The most obvious of companies has to do with the development of the next generation of technologies, whether they are related to solar energy, wind energy, battery storage technology and electrical grids. Networks are important because they need to come along with all this and the business models that will emerge, help turn these technologies into profitable businesses and bring them to as many people as possible.”

Political responsibility of business leaders

“I also believe in an increasingly important role for business leaders to play in politics, because most politicians believe that deregulation is on the business side. But there is a different group of business leaders who are aware that regulations introduced and developed in the right way can actually create markets in which they can operate and thus make everyone better off. Therefore, it is not just about new technologies, it is not just about business models, it is increasingly about having a politically active role. An example I usually give is that of Microsoft, which began looking at all members of industry federations to check that they were not arguing against the company's position on issues such as climate.”