Imagine a business world in which companies’ business models are based on improving the environment and people’s well-being, are economically viable, and operate within the ecological constraints of our planet.
Does this sound like a vision that is completely impossible to realise in reality and within the current operating environment? So, too, were the visions of a democratic society, women’s suffrage or, for that matter, inventions such as satellites and pacemakers. In the FIBS and Third Rock programme for developing future-proof business, we practise envisioning a better future for business, shaping a fairer and more sustainable operating environment, and are taking steps towards this goal together with six companies.
Many major changes in human history, such as the French Revolution or the Industrial Revolution, have had their origins in bold new ideas and various utopian visions. Behind the French Revolution were the daring thinkers of their time, such as Rousseau, Voltaire, Montesquieu and Diderot, whilst in the Industrial Revolution, visionary inventors such as James Watt played a significant role. The same applies to today’s digitalisation and the development of artificial intelligence. Until very recently, many of today’s technologies existed only as stories in the pages of science fiction.
The future is always built on someone’s ideas, plans and visions. Have you ever stopped to consider whose visions of the future you are currently bringing to life, or what sort of future you are building for us today and for future generations? What sort of future would you like to see?
Change always requires courage and the ability to think about things in a new way. In business, this could mean the courage of company owners and management to reflect on the company’s role as a builder of the future, to set planetarily sustainable visions, and to update business strategies to serve these objectives as well. In politics, on the other hand, it could mean the courage to acknowledge scientific facts and steer structural changes that can secure the future of the planet, its people and business.
So what exactly is truly sustainable business?
The most pressing issues facing humanity are the rapid reduction of greenhouse gas emissions and halting the loss of biodiversity. We need to bring about major change before the end of this decade to ensure a viable future for humankind. The circular economy, resource wisdom and renewable energy are concrete ways of addressing these challenges. Sustainable businesses are currently considering how they can maximise the impact of their operations in tackling the multi-crisis of climate change, biodiversity loss and global inequality. At the same time, they are helping to secure the future of their own businesses and their operating conditions by identifying new long-term business opportunities.
As time and other resources are limited, companies should focus on influencing the most essential issues where their impact is greatest. The responsible behaviour of financial institutions and institutional investors has a major impact on how the transition to sustainability progresses across sectoral boundaries. Many financial institutions and investors still lack clear policies and exclusion criteria for business activities that are harmful to the climate and the natural environment. However, we are likely to see more of these policies soon, as the European Central Bank, for example, has begun imposing substantial fines on lenders (including Credit Agricole and Abanca) that have failed to adequately consider and manage material climate and environmental risks in their operations.
A company that is striving for sustainable business practices and wishes to secure its access to finance in the future would be well advised to ensure the sustainability of its business operations in good time.
Future sustainability is an existential matter for businesses
We are likely to see many write-downs of businesses tied to fossil fuels in the coming years, and jobs will be lost as a result. In the UK, for example, it has been estimated that the decline in fossil fuel production has already led to the loss of over 70,000 jobs between 2016 and 2023. Among other initiatives, a professional association called ‘Life after oil’ has been set up in the country to support professionals in the oil and gas sector in planning their next career move in light of this trend. In Finland, too, trade unions are gradually waking up to sustainability issues.
It would be wise for companies to take a long-term view and pay particular attention to their investments – in other words, to the kind of future to which we are committing ourselves and our companies for many decades to come. Transition risks are already a reality and should be taken seriously, particularly with regard to fossil fuels. Future markets are likely to favour sustainable circular economy solutions, energy efficiency and renewable energy. Companies that invest now in these areas and in low-carbon technology will secure their long-term success.
Let us finally return to the idea of visions of the future and utopias. Although a perfect society may not exist, we can still strive towards a better world. The French Revolution and the Industrial Revolution have shown that even individual bold ideas can become reality when we dare to imagine different futures and act courageously.
How to get started?
You can practise envisioning the future and designing sustainable business models!
Why not start with these:
Visioning:
- Sitra’s ‘Three Horizons’ tool (in Finnish) for visualising the present, the transition phase and the future
- Other Sitra tools in the Future Maker’s Toolkit, for example: the ‘Envisioning a Desirable Future’ workshop
Designing sustainable business models:
- Sitra’s handbook for businesses: Sustainable growth through circular economy business models
- Reflect: How could our company actively help build a desirable future and create long-term value?
Social impact:
- Advocacy Toolkit for Business Climate Leaders: a guide that helps businesses understand the links between climate action and policy, and supports their involvement in advocacy work on climate, energy, nature and industrial policy
- InfluenceMap’s Lobbymap: a database and analytics service covering the global climate policy advocacy work of large companies and industry organisations
- Reflect: Are we simply adapting to the existing operating environment, or are we actively shaping its new rules?
Mea Lakso, sustainability expert, FIBS ry
Kirsi Vuorinen, sustainability consultant, Third Rock
This blog post is based on an article by Kirsi Vuorinen published on Third Rock’s website on 30 April 2024. The text has been edited in collaboration with FIBS.