and I've always believed for
sustainability that until customers started acting on it,
we weren't going to make huge progress.
But I think now customers are saying,
that's a company I can buy from,
that one I will not buy from.
And that's going to force
a lot of changes.
We see many of our clients struggling with
integrating sustainability into their strategy.
So far,
it focuses almost entirely on operational issues.
From your perspective,
do you see the strategic challenge
raising completely new strategy questions?
I do.
I think when you've got a field that is still relatively new, right,
which is sustainability in strategy.
I mean,
people will struggle at first because
it's not something they've always done,
right?
They've always done a budget and
they've always done capital planning.
And typically, they've done strategy.
And when they say,
well,
there's this additional thing called sustainability,
I think there's often a struggle with, well,
how do I do that?
And I think
what is often the first thing that happens
is that they make it a separate thing.
So they hire a sustainability person and that person kind
of works away at sustainability stuff over on the side.
And as long as they don't spend too much money,
people just sort of say, okay, we're doing that.
They're issuing a sustainability report and
we've got a sustainability cause or something.
And I think that's where many companies are.
I think as it evolves,
more companies sort of figure out,
you know,
just doing that on the side for a little bit of money
doesn't really make a huge difference in the world.
And if we really want to make a difference,
if we want to be a leader,
we've got to say,
well,
the main thing we do is produce this product or this service.
How do we do that in a more
sustainable way and fundamentally better way for
the planet?
So from your perspective and listening to you,
you kind of almost get the feeling
that companies are stuck in a kind of
the classical CSR type of world where we do some good,
but just business as usual.
So in your opinion,
is there a need to re-imagining what
sustainability really means for a strategy?
I think it's going to happen where companies
are going to tackle their strategy and have
sustainability infused into
that
tackling of strategy.
And a bunch of the same rules are going to apply,
right?
If you want to have a big positive effect,
you're going to have to make choices that are unique.
What
special
thing are you doing?
Right.
Are you going to be like Patagonia and you're going to take back the
clothes and repair jackets and send them back to customers rather than
throw that one away and use all the resources to make a new jacket?
Now that's special.
Right.
So that's what's going to happen.
Fewer are going to be seen as doing something special
while lots of folks,
their strategy will be,
you know,
essentially will do the same as everybody else.
So is sustainability really forcing us to
completely re-imagine the purpose of a business?
And some might not even have the license to play in the future.
I think it'll be partially how you do things will change more than
what value you're trying to provide to customers.
It's just how you go about doing that
is going to have to change a whole lot.
And the classic case would be like,
you're right.
If you're an energy company,
you know,
you might be stopping drilling for more hydrocarbons
and building more kind of wind turbines.
But still,
it's not completely
changing the nature of the business.
You're still supplying energy to
customers who need energy.
Nike did this move,
which was sharing their dirty secrets.
I'd be interested in what you think
about of that as a strategic move,
but perhaps also about should we encourage more
companies to come clean and show us our dirty secrets?
I'm for transparency.
The very first regulations in modern history
were called sunshine laws,
and they mandated
transparency under the theory that
the best disinfectant is sunshine.
And so I think theoretically,
that makes a lot of sense to me.
I think there's a relatively small
downside to governments mandating transparency.
You mentioned the Patagonia a bit before,
which is a kind of an icon in many ways.
I think they went public very recently saying
that their only stakeholder was the planet.
Did you see that as the new thing or you see it more
as a kind of an outlier and activist kind of crazy or?
I think it's going to be the new thing.
You just have to look at the stakeholder equation,
not as a random set.
There are these,
oh,
there's the planet,
there's customers,
there's employees,
there's the shareholders,
and there's just each of them are like a separate thing.
You've got to ask the question,
how do they work in a system?
What
influences what?
And I think Patagonia
is saying, oh,
you know,
our shareholder value is influenced by
putting planet number one.
And I think it's idiotic shareholders who say,
that CEO said shareholders come first,
we're here to maximize shareholder value,
that's what we're all about.
It's an idiot investor who says,
oh,
I want to invest in that because they really care about me.
Smart investors said,
you know,
their formula that says if we take care
of those three elements really well,
we'll do well.
That's not a formula I can bet on.