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The climate for change: Reimagining a new economy

July 2, 2020

The Climate for Change is here. And the virtual 2020 Shared Value Summit Asia Pacific proved it; drawing an unprecedented global audience of more than 500 business leaders from over 70 companies. 

Supported by co-major sponsors IAG and NAB, the Summit challenged participants to reimagine a new economy in an uncharted social, environmental and economic environment.  As Summit emcee and ABC journalist Sara James put it: “no-one anticipated 2020 unfolding the way it has”.

The Summit leveraged the insight of international speakers and case studies to consider how we can apply shared value strategies in these trying times; to not only to meet the moment, but to also start thinking about the road ahead. We’ve captured the key takeaways below.

Traditional approaches are no longer sufficient

The Summit opened with an address from the Treasurer of Australia, the Hon Josh Frydenberg MP, who highlighted the need to think beyond traditional business approaches as we recover from COVID-19.

“It’s clear that business as usual is no longer an option on the other side of this crisis,” he said. “This Summit recognises that we need business to help grow our economy, but we must also work to solve wider social and environmental problems in more innovative ways, especially in the aftermath of this crisis.”

Co-author of New Power Jeremy Heimans echoed these sentiments, suggesting that “the answer is going to often be a combination of old and new power;” or open and participatory power, and traditional, authoritative power.

Pollination’s founding partner Martijn Wilder offered a broader perspective, having observed that the COVID-19 crisis seems to have engendered “an appreciation of the fact that, perhaps in some ways, the traditional way of doing things is no longer acceptable”.

A need to reconsider and reconfigure

Many speakers also emphasised the need to dismantle and rebuild traditional business models to incorporate social and environmental issues.

Shared value co-creator, Mark Kramer said: “My hope is that [amid] the combined crisis of COVID-19, of unemployment, of racial equity issues, of climate change… companies will come out of this not [going] back to the ‘old normal’ that they were in, but will use this opportunity to find a ‘new normal’ that is rooted in creating shared value.”

UNSW Professor Veena Sahajwalla called on the importance of recycling as an example: “Whether you’re a regional community, or located in a large capital city, you have to worry about what happens to your materials. So, you can’t actually take a business-as-usual approach.”

Economist and Harvard Professor Rebecca Henderson, who recently released the book Reimagining Capitalism in a World on Fire, wanted to think even bigger: “A reimagined capitalism is one where we all take responsibility for the health of our society. It’s like shared value on steroids. Shared value is an incredibly important first step.”

Collaboration is key

In reimagining traditional systems and structures, the Summit speakers also underlined the need to collaborate with other stakeholders and sectors.

In his keynote, Heimans said: “The [brands] that actually have that mobilisation capacity, where the people involved, the consumers, the employees, the stakeholders, actually have a role in advancing the purpose in a non-tokenistic way – those are the ones that we’re seeing succeed.”

Fortune CEO and President Alan Murray also noted the importance of this approach: “Companies do better if they have a commitment to a broader range of stakeholders.”

Mark Kramer added: “Business can absolutely lead these kinds of collaborations. They have the influence to bring people to the table.

Shared Value Project Chair Peter Yates suggested that shared value is the perfect approach for this. “[Shared value] creates a transparent language for government, NGOs and businesses to collaborate, otherwise known as collective impact,” he said.

Shared value is built on trust and accountability

Given this need to work together, trust and accountability are vital. As Heimans remarked, “it’s always helpful when you start from a place of credibility and authenticity . . . companies are now being asked to meet an even higher standard that they were used to”.

Others also noted the difficulty of building accountability. Murray suggested that in the business sector, “we haven’t yet developed the metrics to measure the commitment to employees, to the environment, to communities, to other stakeholders.”

Going forward however, it was acknowledged that these commitments are crucial. As Professor Henderson said, “shared vision and purpose makes a huge amount of difference – it generates trust inside the organisation, and innovation is all about trust”.

Purpose: A focus on ‘us, later’ rather than ‘me, now’

This was Professor Henderson’s conceptualisation of short-term self-interest versus long-term purpose. She said: “We are so used to focusing on me, right now, that the overwhelming focus on short-term profitability has really narrowed horizons… If we’re going to address the problems we face, we’re going to need to balance that with later, and us.”

Shared Value Project CEO Helen Steel reiterated the need for long-term holistic thinking: “Business and society are intrinsically linked. Every issue we’re facing as a society, businesses are facing as well. I’m hopeful that we will see businesses adapting and changing for a positive future.”

SuperFriend CEO Margo Lydon agreed, noting that the key question of shared value approaches has always been, “how do we bring together the need for financially sustainable decisions that also have a heartbeat to them to deliver social value?”

A long-term commitment to creating social value can enhance economic outcomes and create trust, according to Executive General Manager at Safer Communities, IAG, Ramana James. “If you have a clarity of your purpose as an organisation and you build your strategy on the back of that purpose, then the things that matter and that you stand for are likely to be consistent,” he said.

The time to act is now

The overarching consensus was that the crises of 2020 have given us cause for both optimism and urgency. In the words of Professor Henderson: “The pandemic has shown us that when we want to change, we can.”

Considering the climate crisis, Professor Kramer suggested that COVID-19 has proven our capacity to act quickly to address some of the most persistent issues of our times. “The biggest challenge for business to adapt is to give the same sense of urgency and purpose to these slower crises that we do to the shorter crises,” he said.

NAB Group Executive in Corporate and Institutional Banking David Gall agreed that shared value was a critical tool to achieve this: “The reality is there are many great projects out there that have great outcomes and consequences for climate, for the environment more broadly, and for society, but actually make good financial sense as well.”

AIA Australia and NZ CEO Damien Mu summarised the Summit well with the quote: “A recovery needs to be business-led, and that’s what we’ve got to do – step into that leadership position and act.”

Read more on our individual Summit sessions here.