Board Leadership for the Environment and Climate Change

Some countries will partially or wholly disappear as sea levels rise. Others will become largely uninhabitable or cease to be viable. As coastal cities are inundated, significant proportions of the national infrastructures of some states will have to be written off. Rising temperatures represent an increasing threat to human health and well-being. They could disrupt energy transmission, transportation systems and public services. As problems mount, mass migrations occur and Governments and local bodies struggle to cope, shortages will occur and at some point there may be a breakdown of law and order.

When attending board meetings and discussing how environmental trends might affect a company and its customers, it is easy to lose sight of the scale of the challenges we collectively face. Approaching two billion people are heading towards an acute water crisis. Droughts, fires and floods occur with increasing frequency. The natural capital that is and will be required for climate change adaptation and mitigation is being used up at an alarming rate. It may be insufficient for some possible technology solutions and envisaged digital developments at the point when they might be most needed.

Systemic, joined up and longer-term thinking and responsible decisions that take account of current realities, shared interests and collective consequences are urgently required. In the short-term the signs are not encouraging. At COP 27 in November will key Governments again put what they perceive to be the immediate interests of their own citizens ahead of the interests of the wider world, future generations and earth’s ecosystems? Might the actions of net zero laggards cause other parties to scale back their ambitions? By the time electoral majorities in favour of survival actions emerge, will global temperature rises be unstoppable?

Acknowledging Collective Consequences of Current Practices

The scientific evidence is clear and the impacts of collective human activity upon the environment and natural eco-systems are visible from space. They include water and food security issues, the loss of biodiversity and habitats, emerging natural capital shortages, global warming and climate change. Their consequences encompass increasing numbers of extreme weather events and rising sea levels that could force the abandonment of both rural and built up areas and lead to stranded asset and infrastructure write offs and mass migrations. Coping will require adaptation, mitigation, transition and transformation.

Business strategies often benefit some people at the expense of others. Market segmentation strategies may suggest rolling out in phases, with initial priority on relatively small numbers of high margin customers. Offerings may be gold-plated and become over-elaborate in order to attract a premium from those with the ability to pay. Complexity and its associated costs can often represent barriers to those who can only afford economy prices. Access and affordability may need to improve to increase the participation of hitherto marginal groups.

As the impacts of climate change are increasingly felt by whole communities, are faster roll outs of adaptation and/or mitigation, transition and/or transformation, and resilience related offerings needed? What different forms of marketing, distribution, segmentation and innovation adoption strategies will be required? Ought there to be more focus upon simplification, or other factors such as lower energy consumption, or the use of materials in more abundant supply? Should wealth be replaced by vulnerability as a prioritisation factor?

Reviewing Purposes, Priorities and Values

If carrying on as at present is unsustainable, how might reviews and a re-thinking of individual, corporate and collective aspirations, aims and ambitions, purposes and priorities, and goals and objectives be triggered and undertaken? Are big and collective conversations and wider consultations required? What role could directors and boards play as catalysts and in relation to stakeholders? How might those most likely to be affected by a change of strategic direction best be involved? Is a more democratic form of enterprise required?

Activities and outputs that are not sustainable need to be reduced, and in many cases dramatically, along perhaps with the growth rates to which they contribute. Fewer negative impacts may boost our prospects of survival. Might standards of living as currently measured have to fall? Do traditional indicators of output, development and growth need revisiting, for example, to take account of bartering, or exchanges that occur outside the money economy? How should one value effort devoted to voluntary activities such as caring for others?

The rare earth minerals digital technology hardware requires may not exist in sufficient quantities for some projections of their use and estimates of resulting job losses. What is clear is the amount of work required for climate change adaptation and mitigation, assisting migrations and lifestyle changes, supporting transition and transformation journeys, protecting and restoring natural eco-systems, reconnecting with nature and rewilding. How should such activities and creating more robust, flexible and resilient cites, infrastructures and social and support systems be initiated, undertaken, rewarded and valued?

Rethinking Enterprise and Entrepreneurship

The forthcoming 23^rd WCEM on environment management and climate change represents an opportunity for business leaders to exchange views and discuss its theme of transformational leadership for climate resilient economic growth. What role should they play in the collective responses to shared existential challenges now required and the envisioning, creation and development of an inclusive and sustainable future that is desirable and fulfilling? How might enterprise and entrepreneurship drive solutions rather than compound problems? Could the former include beneficial uses of the over 70% of the earth’s surface covered with water?

There are a variety of needed and possible activities for people with a wide range of interests, abilities and qualities. There are many new roles that they may find more fulfilling than what they do at the moment. These might also appeal to those currently excluded or marginalised. Their consequences could be mainly positive compared with today’s widespread negative externalities. Some of them could build social and natural capital and lead to simpler, healthier and less stressful lives. There is enormous scope for creativity, passion, drive, local and collective initiative and social entrepreneurship.

Scaling back damaging activities, limiting unsustainable operations and reducing negative consequences may be necessary, but ought responsible enterprise to be so much more than this? Should it be about imagination, inspiration and opportunity, and developing, enabling and supporting activities, operations and lifestyles that are worthwhile and sustainable? Could it involve public-private collaboration and community involvement, and attract and motivate talent? For example, could cleaning up polluted waterways create opportunities for re-generation, transportation and the development of fishing and other public leisure pursuits?  

Social and Environmental Innovation

Over time, large and forced migrations may have to occur and communities, including cities in expanding flood plains and low lying and coastal areas, relocated. Massive investments in buildings and infrastructure may have to be written off and what remains made more resilient and climate change resistant. Multiple requirements occurring simultaneously look set to create unprecedented opportunities for innovation and enterprise. The number of people and communities impacted, their diversity and various needs will open many doors for businesses of all sizes and entrepreneurs to explore possibilities, respond and support them. 

There are many possibilities in almost all locations to help individuals, organisations, communities and societies to adjust and adapt. Enterprises and entrepreneurs could explore, create and/or support transition and transformation paths to alternative and more attractive and sustainable ways of living. They could offer new life choices, not just for avatars in an escapist metaverse, but for real people here and now. They could work with nature to help restore eco-systems for future generations to enjoy while this remains possible.

The wide ranging nature and scale of what is and will be required to live in greater harmony with the natural world and adapt to and cope with global warming and its many consequences are daunting. A significant proportion of companies may need to quickly adopt new and more sustainable models of operation. As awareness of natural capital limits and the need for economy, restraint and tough choices grows, aspirations and expectations of emulating unsustainable lifestyles that have been experienced by a few will need to change.

Meeting Challenges and Grasping Opportunities

Whether directors feel relatively secure and confident or threatened and uncertain, the context, situations and circumstances in which businesses operate are changing. Events may speed up as tipping points are approached or reached, after which certain trends such as global warming may become unstoppable. Many boards are already confronted by critical choices, or may soon be faced with them, irrespective of recognition of this reality. They may need to determine who else to involve in discussion of purpose, aims and priorities, what is possible, and how this might best be done, either with current contacts or wider collaboration. 

People and organisations tend to progress incrementally from where they are and what they know. Radically changed business models may still be used to market, sell and distribute a company’s traditional offerings. Until more boards are prepared to take bigger steps and move into hitherto unknown areas, the more rapid recognition, adoption and scaling up of potential solutions to contemporary problems may not occur. For example, there are many examples of halophytes or plants that can be grown with the salt water the planet has in abundance, capturing carbon dioxide in the process, and used for food and as a raw material.

How should a board now proceed? Are changes to governance arrangements and board practices required? Does a board have a realistic view of the capacity to change of an existing team and business partners? Are helps and hinders such as vested interests understood? Is a board aware of its own limitations in relation to what now needs to be done? What additional counsel, expertise and other support might be needed at different stages of transition and transformation journeys, and how might these be obtained within the available timescale? How might a board itself be strengthened? Is it time to shuffle the pack or draw new cards?

Critical Thinking in the Boardroom

How aware are board members of the consequences of corporate activities? Are corporate accounting and reporting practices concealing negative externalities, and/or are damaging activities hidden or tolerated? As well as being morally responsible, in time might directors also become legally liable for consequential harm? Are they alert to possible allies, opponents and regulatory developments, sensitive to changing stakeholder concerns; and responsive to wider and evolving stakeholder and public aspirations, expectations and requirements?

Effective and responsible strategic direction is about critical thinking as well as decision making. Corporate aspirations, expectations, visions, values, purposes, priorities, goals and objectives, may all need to be critiqued, reviewed and reset. Cherished activities and widely held views should embrace and reflect today’s concerns. Corporate purpose, vision, values, goals and objectives should be sustainable, aligned and consistent with the strategies and policies a board established and the behaviours of those charged with achieving them.

In the current moment, there is little that should be taken for granted. Some directors may owe their progression through the layers of corporate management and board appointments to their being perceived as a ‘safe pair of hands’ who will not ‘rock the boat’ and/or being deferential to those in more senior positions. If purposes, priorities and strategic direction need urgently to be reviewed in entities that individually or collectively could impact upon our future prospects, it is especially important that all directors exercise independent judgement and are prepared to question, challenge and form and express their own opinions.

Rising to the Challenge

The pursuit of unsustainable materialism and growth can be divisive. It can exhaust natural capital. It can result in people wanting ever more and worrying about what they do not have, rather than being thankful for the life they do have. It might not be too late to change. Many opportunities to work with natural eco-systems are waiting to be explored, including those in the oceans.  India’s rich heritage of ancient wisdom respects nature. It advocates living in harmony with the natural world. It warns that while material trappings may temporarily distract, they cannot address a feeling of emptiness within or lead to enlightenment.

Will boards step up? Directors and influencers can play a vital role as instigators, enablers and supporters of the diversity, flexibility, curiosity and creativity that can be so conducive of discovery, innovation and entrepreneurship. These activities are crucial for tackling existential challenges and transitioning to more sustainable operations and lifestyles. This may require significant, if not radical, changes of priorities. Focus may need to switch from outputs to outcomes.  Maybe the feelings and fulfilment that customers seek could be reliably delivered in less environmentally damaging and resource intensive ways.

The undesirable impacts of business and other human behaviours have reached potentially catastrophic levels. Together with related opportunities, these consequences also create common requirements, such as those for climate change adaptation and more resilient infrastructures. Will more boards recognise the potential for stakeholder and community engagement and alignment around shared interests and the common goal of survival? Might they use their freedom to act and vary approaches to suit local needs to offer alternatives, choice and bespoke responses? Should some corporate net zero targets be more ambitious?  

Tipping the Balance

It may frustrate some directors of Indian companies that restraint and changes of direction are being called for when emissions of greenhouse gases per head are so low in relation to certain other countries. However, past emissions of greenhouse gasses are history. Whether or not tipping points are triggered will depend upon what we collectively do now and future emissions. Might India’s population be large enough for the lifestyle ambitions of its citizens and the collective activities of Indian companies to tip the balance in favour of either the future extinction of human populations or their survival in some form?

Institute members and other directors have a unique opportunity to influence all our futures, by inspiring ways of improving the quality of life of large numbers of people, including in rural areas and poorer States, without this triggering global warming tipping points which could result from trying to ‘catch up’ by following previous growth models. Are there different and more sustainable and rewarding options that could be explored, scoped and pursued? Could this bring collaborating organisations and communities together, energise talented people and stakeholders who are worried about their futures and re-establish trust? Should more responsible boards and ambitious directors be initiators, educators, advocates, ambassadors and drivers of corporate and collective action to rethink how we operate, travel, interact, organise, live, work and consume? Could they become pioneers of truly sustainable communities, cities and wider regions? How might they forge the collaborations and other relationships required? Will they act while there is still time and become leaders in a new age of sustainable lifestyles and achieve global impact. For co-existing with the natural world and climate change, could this result in the creation of one of earth’s most advanced societies?