A recent event in New York City, organized by the Guardian and Forum for the Future, drew attention to a major challenge on the road to a sustainable economy: system innovation, or how to create a large-scale system change to make a difference1. Sustainable and social entrepreneurs, activists and business representatives gathered in New York for half a day of discussion and brainstorming, including the United Nations’ Global Compact, Ecovative, TheRules.org, and others.
While sustainable solutions develop across most industries, and market players increasingly integrate ESG aspects in measuring performance, large scale change is yet to happen, and business as usual still governs most market transactions. The big systems at the basis of the economy are not functioning in a sustainable manner – food and energy production and consumption are still extensively based on a linear resource exploitation model – and we need to fundamentally change the way these systems function. We need a BIG shift – a true change of behaviors, and of the process value creation, involving all stakeholders and businesses together.
The first part of the workshop prompted some very interesting and bold ideas and solutions. When debating system change, how to promote sustainable business is but a part of the equation; fundamental issues such as whether economic growth is compatible with a finite planet (Alnoor Ladha, TheRules.org), and the dichotomy between values and individual interests, are among those that come to mind.
There are ways to radically improve our environmental footprint and reduce the impact of business on the environment – an amazing example was presented by Ecovative, and their mushroom- based ultra-rapid renewable biomaterials2. But such innovative solutions need to be introduced on a large scale, across whole industries. System innovation and change, discussed by Joe Hsueh (Second Muse), rely upon collective dialogue and inclusion of all players and mechanisms at work in a given sector. Inclusiveness, and working with stakeholders, not trying to impose external agendas, is key to success in promoting system change.
Another fundamental transformation needed to spur large-scale sustainability was raised by Amy Larkin (Environmentaldebt.net) – beyond profit & loss, we need to include time, and namely cause and effect, in accounting and in financial analysis. While personal relationships seem to be at the basis of any economic transaction, and are key to progressing towards sustainability (Peter Nicholson, Foresight Design), how do we pursue sustainable goals, related to collective goods and action?
Sustainability has reached the board room – thanks to initiatives such as the Global Compact of the United Nations (Ole Hansen, UNGC), and setting sustainable development goals on a world level could help. But drivers within corporations are not sufficient – we still see responsible companies putting on the market products that are not sustainable. There is a gap between the future we aspire to reach and the present state of economic systems we are part of.
That gap was the subject of the second part of the workshop – where participants were asked to brainstorm on systems change in various sectors – food, energy etc. While each subgroup responded particularly well to the task assigned – to build a model of the current or future state of a market with Lego pieces – imagining the transition between the two and the main drivers to implement this change was particularly challenging, even with simple Lego-constructed models. To go from a fragmented linear world to an integrated system, where impacts are embedded at the core of market functioning, seems arduous. But as this workshop proved, we are constantly innovating and finding new bright ideas to address the most challenging and deep-rooted problems in the economy. A holistic approach, inviting cooperation with all stakeholders, and bold enough to investigate markets issues beyond the limits of finance and economics, can only help business become better, resilient and more inclusive.
Margarita Pirovska PhD is a Policy & Sustainability Analyst at Cornerstone Capital Group and former Project Manager at GDF SUEZ at the Sustainable Development Division.
1 More information on the event here: http://www.theguardian.com/sustainable-business/system-innovation-changing-systems-changing-future-event-new-york
2 See article in this edition in the Sustainable Product Review section.