Making the Recovery Green

Whether or not you share that feeling, there is undoubtedly a moment of opportunity that presents itself now, as a result of the consequential breakdown of the global economy—with so much of the global supply chain unpicked, and so much left to rebuild from the ground up.

In particular the pandemic has provided renewed impetus amongst business leaders and policy makers for pursuing the UN’s Sustainable Development Goals as businesses and economies begin that rebuilding work.

So how might a green recovery look—both for individual organizations and for the developing role of business leaders? This was the focus of a recent webinar led by Hult Ashridge Executive Education’s Matthew Gitsham and Julian Thompson.

70% of the business people participating responded that companies need to highly prioritize climate change and other global challenges as they recover

During the webinar a poll was run with 70% of the business people participating responding that companies need to highly prioritize climate change and other global challenges as they recover from the pandemic. This is a notable result at a time when mere survival must be the overarching priority for a large majority of businesses.

Considering the multiple crises the world now faces—social as well as environmental and ecological—how can business leaders can face up to these challenges without being overwhelmed?

How businesses can encourage a green recovery

A green recovery was defined in the webinar as an economic bounce back which resets investment, growth, and job creation to better support environmental goals such as those set out in the EU’s taxonomy (climate change mitigation, circular economy, water, pollution prevention and the protection of ecosystems), as well human rights goals such as the elimination of modern slavery and worker exploitation through the value chain.

Using this definition, Gitsham described the actions now needed from business leaders to make progress towards a green recovery. The principal action must come from governments, albeit with essential encouragement from the business community. During his research Gitsham has found that business leaders, who have not traditionally welcomed massive government intervention, are today providing this encouragement.

In supporting government action business leaders are calling for three things:

1. Public investment. Direct public investment in green jobs and infrastructure—clean power, clean transport, clean buildings, and natural capital (tree planting, erosion control, river and land husbandry, etc.).
2. Regulation. There is perhaps a surprising demand for more regulation. Leaders want to avoid any roll-back of existing rules, and favour the phasing out of fuel subsidies, carbon pricing, penalties for inefficient use of resources, and mandatory reporting of environmental impact.
3. Strings attached to bailouts. Any financial bailouts provided by government should carry obligations linked to science-based targets, such as investment in low carbon solutions that create jobs, and no bailouts for companies that invest in tax havens.

Why businesses are calling for global challenges to be addressed

Support for the global green agenda has been growing steadily amongst business leaders in recent years. Now the pandemic, and the need for new thinking to stimulate a recovery, provides a unique moment of opportunity to push this agenda forward.

The economic argument for business leaders encouraging government spending aimed at green targets is that it will be a highly effective accelerator for a general recovery from which all will benefit—with the creation of green business and job opportunities, and investment in green infrastructure developing assets of long-term value to business.

How the leadership mindset is evolving to support the green agenda

“Business leaders have been on a journey,” says Gitsham, “bringing them to appreciate the moral and the economic drivers.” The current generation of leaders wants to see global challenges addressed and is far keener than previous generations to welcome regulatory policy and financial incentives/disincentives that pressurise all to do the right thing. Leaders now see societal challenges as theirs too, again for both moral reasons and economic ones—protecting their brands as customer attitudes demand better corporate behaviour.

Business leaders have been on a journey bringing them to appreciate the moral and the economic drivers

In another poll, 40% of the webinar participants confirmed that the senior leadership in their organization was specifically thinking and acting to promote the green agenda—not that all would be aware of what support their organization was giving.

To be proactive in this area leaders should first look internally—talking to staff about the purpose of their work, framing challenges to inspire innovation, holding people accountable for what they are rewarded for, and being prepared to raise difficult issues and confront vested interests. Secondly, from an external perspective, leaders should act to lead change in consumer and supplier behaviour, collaborating with multiple stakeholders to drive green initiatives. Finally, business should continue to lobby government to support green policy making in concrete ways that can help them deliver a genuinely green recovery.

………………………………………………………………………………………………………………………

About the Speakers

Matthew Gitsham is Director of the Ashridge Centre for Business and Sustainability, part of Hult Ashridge Executive Education. He specializes in Sustainable Development, Human Rights, and Organizational Change. Matt has led numerous research projects on business and sustainable development for over a decade at Ashridge.

Julian Thompson is Head of Leadership Development at Hult Ashridge Executive Education. His work centres on helping individuals and organizations achieve higher levels of purpose, productivity, and fulfilment in their working lives. He has particular interests in collective leadership, social innovation, collaborative technologies, participatory organizational change, purpose-led strategy, and sustainability.