It’s not new information that 2030 is the deadline to save the state of the global climate. As the United Nations explained in 2017, “we are the last generation to prevent irreparable damage”. Yet, strikingly, our 2022 Disruptive Trends Report showed how sustainability is being pushed down businesses’ agendas. So where are organisations going wrong, and how can leaders foster a positive balance between people, profit but also the planet, before it’s too late?
We spoke with Douglas Lamont, CEO of Innocent Drinks and the co-chair of The Better Business Act, to delve deeper into the challenges businesses are facing with sustainable practices, the concept of sustainable capitalism, and how potential legislation could increase accountability across industries.
You frequently use the phrase “sustainable capitalism”. What is your definition, and how close do you think we are to that currently?
Ultimately businesses should be in a position where they can grow, make a profit and deliver a return for their shareholders. But they do that once they’ve effectively paid their dues - whether that’s to their employees or their community around them or to society as a whole. If people, profit and planet are in balance, that’s sustainable capitalism. You’re not taking away from people in order to make those profits, you’re balancing your commitment to those people that are helping you make those profits whilst delivering a return for your shareholder.
We’re all on a journey, and not every single company has that mindset. However, commitment to company purpose is getting stronger, so it feels like we’re accelerating towards a world where that’s becoming the norm.
What are the challenges that businesses are seeing when they are moving towards that and how should they approach balancing people, profit and planet?
Most of this comes down to mindset, and ultimately the way we understand the impact of business doing good versus bad. When you think of balancing people, profit and planet, it’s not just the right thing to do, but the smart thing to do. There are three or four thousand B corps that, by definition, are far more successful than their peer groups because they are taking this approach. Most of those leaders have just come through a pandemic (and done a great job of surviving a crisis!), but this shift is entirely possible if you just start to think differently about how to invest for the future.
The mindset shift is hard, especially when organisations are laser-focused on their P&L sheets. Do organisations have to sacrifice profit to a degree?
I don’t see it like that - I certainly don’t think companies have to sacrifice values to do this. Businesses are very used to making investment choices, some of which return right away, some of which may not give you a return for the next five years. As business leaders, we’re constantly doing that judgement about all sorts of things. It’s just choices we’re making, to ask “what builds long term value?”. We’ve got a sustainability crisis, and if this gets worse, there will be huge uncertainty if we’re not investing in these things. It’s going to become a norm, and it will become like any other business topic, necessary to short and long term thinking.
Purposeful business, and balancing people, profit and planet does have short term returns too. If you do it well, you attract great talent to your business that sticks around longer and this can deliver rapid returns for your business.
You’re an advocate for the Better Business Act. Can you tell us what that is?
As B corps, we have to commit to changing the articles of association. Ultimately we’re campaigning to set a commitment so that the responsibility of directors isn’t just to maximise outcomes for shareholders, but actively balance between people, profit and planet. It's crucial to introduce that mindset in the boardroom. It would lead to better outcomes and stronger mindsets to accelerate. While there’s a greater call from consumers and investors, it’s not going fast enough - however, if we make it a legal requirement, that change will accelerate even more.
In terms of the B corp status, what are the components that make it up? What does it look like, in terms of the behaviours and mindsets?
The thing I like about B corp is how it considers all aspects of business: how you treat your employees, sustainability, your communities and success. B corp certification measures everything, so it's a real validation of your all-round business approach (rather than a particular ingredient). What’s far more powerful than the certification is the community, certainly for Innocent Drinks. It evolves into such a powerful movement filled with inspiring leaders.
How important is legislation to ensure that businesses are held accountable to net positive practices?
It’s really important that business and government work in partnership. We’ve seen through the pandemic that, when business and government get together to solve problems where there’s a sense of crisis, a lot can happen in a very short period of time. We have to treat what we’ve got in front of us both in a social justice and in a sustainability perspective. We need legislation and things like The Better Business Act, but you need business to step up and play its part as well. The minute those things come into conflict we will go slower, so there’s a huge opportunity to take the learnings from the COVID-19 crisis and say: “How can businesses and the government work together to solve problems, as a norm?”.
In terms of collaboration, what is the main thing that businesses should do to cultivate Better Business practice?
Business leaders have to realise the era of “a well-crafted press release to look like you’re doing well but without actually having to change your business” is (hopefully) over, as well as the error of saying “we will focus on just one thing and be good at that”.
It’s now about the era of transparency, it’s only going to get louder, from consumers and just as importantly from employees as well. There's a war on talent and our employees are ever more critical of the businesses they work for and are paying more attention. So how do you become good all-round as a business? Find a set of questions that can work all the way around your business. That’s the best place to start.
We interviewed Douglas at Chief Disruptor LIVE October 2021. Join us at our next summit to get the inside scoop from the brightest business minds on the latest in business and technology.
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