Breakthrough Capitalism: “We are more than consumers, more than tax payers”

A UN Global Compact survey reported that 81% of CEOS believe sustainability issues have become part of their company’s strategy and operations.

Most people would see the survey as a positive sign for sustainable business. Volans’ Executive Chairman, John Elkington does not.

A few short weeks ago, John shared these survey findings to a crowd of Canadian business leaders and posed the question: if CEOs are ‘accounting’ for sustainability issues in their core business, why are we experiencing escalating pressures on our environmental, economic, political and social systems?

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John Elkington speaks to business leaders in Toronto, Canada.

The Volans team believes that part of the answer rests on the shoulders of executive level corporate leadership. Around one thousand companies control half the value of all the world’s publicly listed organizations. The power of some of the largest corporations and their leaders has become colossal in magnitude.

In response to the expanding dominance of business, Volans catalyzed a movement called Breakthrough Capitalism. Breakthrough Capitalism is a global call to action for corporate leaders to “reboot” capitalism through radically re-envisioning their business models. Volans has hosted Breakthrough forums in Berlin, London, Singapore and most recently Toronto.

In early November, Canada’s Breakthrough Capitalism forum challenged Canadian business leaders to rethink the way they do business in context to increasing global complexity. In his opening address, John Elkington acknowledged the increasing linkages between systems such as the food-energy-water-finance nexus, where one system cannot be fully understood without considering the others.

Toronto’s event brought together leaders from a cross-section of industries including financial services, energy, consumer goods, food, health, media and retail. The day was heavy on interaction and light on speeches. It opened the space for candid dialogue, questioning and brainstorming. Participants were asked to understand their business in relation to projecting three future world scenarios: Breakdown, Change-as-usual, and Breakthrough as depicted in the video below.

Following a fairly morbid discussion, participants recognized that the Breakdown and Change-as-usual scenarios are one and the same. Both will result in over-consumption, resource depletion, widespread poverty, and failed governance. The only distinction is that Breakdown will reach systems collapse sooner. Consequently, managers were quick to agree that the only viable way forward is the Breakthrough scenario.

 

What does Breakthrough mean to Canadian Business Leaders?

 

1) Executive Leadership

All participants agreed that buy-in from the top is critical. One only has to look at the likes of Paul Polman at Unilever or Jochen Zeitz at Puma to understand that executive level leadership holds immense power over corporate strategy.

2) Aligning Language

From shared value to corporate social responsibility, conscious capitalism to constructive capitalism, corporate social innovation to sustainability, the field is a cacophony of competing language. It’s painfully ironic that each movement is attempting to achieve the same goal of making the world a better place. Participants accept that language needs to converge in order to shift the movement from the periphery to the mainstream.

3) Creating Opportunities to Act

During the afternoon, the forum broke out into four groups prepared to hack the assumptions and models driving their respective industries. These breakout groups gave attendees permission to dig deep into the heart of their business and posit potential solutions.

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Hal Hamilton, founder of Sustainable Food Lab, facilitating a breakout session.

I.     Accountants

Generating a storm of new ideas and next steps, the accountants led the way for actionable solutions. Real time performance indicators, responsible resource stewardship, long-term thinking, and embedded sustainability education represented a handful of the accountant’s proposed objectives.

II.     Consumer Behaviour

Marketers wrestled with their dependence on ever-increasing consumption in order to meet their sales growth objectives. Group participants agreed that enabling consumers to align their social and environmental values with their purchases is the future of responsible consumer behavior.

III. & IV. Food

Solutions that bubbled up from the food systems group included creating a “sin food” tax, mitigating food waste, educating consumers, investing in local food, and collaborating along supply chains.

 

4) Personal Transformation

Although much needs to be done at the office, change must also start at home. Too often we ask the world to act differently and forget our own role in embracing the change we seek. It was widely recognized that we should be mindful of our own values and beliefs, and channel that energy beyond our workplace to permeate all aspects in our lives. Sandra Odendahl of RBC captured this spirit in her closing remarks: “We are more than consumers, more than tax payers. We are citizens.” As citizens, it is our duty and privilege to care for one another and support a healthy environment.

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Sandra Odendahl

What Now?

It’s up to us – business leaders, civil society and government – to push one another forward. As the CEO of MaRS Discovery District, Ilse Treurnicht, declared, “It feels like the world expects more of us than we expect for ourselves.” Let’s cut loose from the status quo and rise to meet the demands of wicked problems. We are ready. It’s time for a breakthrough.

5 Trends in Corporate Social Innovation

Innovation

c/o Case Catalyst

Businesses are doing social innovation. But some of them are doing it without referencing the words social or innovation when developing their strategies and projects. From our vantage point in London, UK, we have seen the following five trends as big corporations begin experimenting with new ways of working towards a triple bottom line – and changing the systems in which they operate.

1. Pre-Competitive Collaboration 

Hyper-competitors are joining forces to change a system as a united front. Consider it a ‘coalition of the willing’.  For example, Nike, Adidas, Puma and 13 other highly competitive apparel companies came together to launch the Zero Discharge of Hazardous Chemicals project, focused on developing a shared roadmap on how to eliminate the discharge of hazardous chemicals from their linked value chains.

2. The Finance Frontier

Companies are increasingly seeing the financial system in which they operate as an area ripe for disruption. Puma has done this by publicly disclosing their EP&L statement (Environmental Profit and Loss), which values their use of natural capital across the supply chain. Unilever is pushing back on the financial status quo by refusing to provide quarterly earnings guidance to investors.

3. From Open Innovation to System Innovation

Truly disruptive innovation requires more than just changing the rules of the game. It requires new team formations, new stadiums, new equipment and new referees.  Doing this well will involve more than a wide-reaching ‘open innovation’ platform.  By working with stakeholders across the system, they can drive innovation within (and beyond) the system in which they operate.  For example, Nike has partnered with NASA, USAID and the US State Department to run LAUNCH, uncovering truly radical sustainable innovations in fabrics and materials.

4. Looking Back to Looking Forward

At key milestones – including 50-, 75- and 100-year anniversaries – companies are celebrating by projecting the impact of their company at the next milestone. SwissRe is celebrating their 150th birthday with an ‘Open Minds, Connecting Generations’ project to engage employees and stakeholders around what comes next.

5. The Rise of the Corporate Venture

My personal favourite trend of 2013 is the rise of Corporate Venture Capital units within companies. These internal Venture Capital teams are increasingly setting their sights on areas that have traditionally fallen into the social investment camp. At the recent Global Corporate Venturing Symposium, the discussion included investments in health care services, sustainable products, renewable energy and providing access to emerging economies.

Editor’s Note: Charmian Love and the Volans team aim to help a new form of capitalism find its wings, mobilizing breakthrough capitalists from across the business, government, investment and entrepreneurial spaces. They call it Breakthrough Capitalism and their team will be bringing together Canadian breakthrough capitalists at MaRS on November 7th where we hope a new trend begins!