* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Hostility to globalisation, rising inequality and accelerating innovation made world more volatile and uncertain in 2016
What a year. From the Brexit referendum to the election of Donald Trump, long-lived assumptions about the path of politics have been overturned in 2016. The new context for industrialised countries is the rise of a political populism – nationalistic, protectionist and angry. While there are many specific and distinctive reasons behind this trend, many commentators have identified one key factor as being the uneven distribution of the benefits of growth and globalisation, with many people feeling left out of an improving life they can see others enjoying.
Complicating this trend is the impact of new technologies, particularly the wave of new artificial intelligence-centred technologies that have been called the fourth industrial revolution. As these technologies increasingly turn up in people’s lives, from self-driving cars to check-out free shops, the impact of these innovations on how people live and work is prompting more debate.
Earlier this month Mark Carney the Governor of the Bank of England gave a major speech where he commented that, “The fundamental challenge is that, alongside its great benefits, every technological revolution mercilessly destroys jobs and livelihoods – and therefore identities – well before the new ones emerge.”
Hostility to globalisation, rising inequality, accelerating innovation – none of these trends are new, but in 2016 they seemed to come to a new peak and the world took a turn for the more volatile and uncertain.
For the Cambridge Institute for Sustainability Leadership, an organisation dedicated to helping leaders from business, finance and government understand and respond to the big challenges they have to address if our world is to remain safe, habitable, comfortable and prosperous, this is clearly something that we need to respond to.
Our core mission, to help rewire the global economy on to a more sustainable, equitable footing already responds to many of these challenges. Many of the leaders we work with are already working to align their businesses to support the Sustainable Development Goals agreed by world leaders in 2015. However we believe that there is the need for deeper, more structured thinking about the social impact – and the social contribution - of businesses.
It is undoubtedly true that business has an important role to play in creating positive social outcomes. Businesses produce goods and services of value, manage natural resources, provide employment, contribute taxation, direct investment and develop innovations.
While there are numerous examples of negative and damaging business performance, increasingly, forward-looking businesses are trying to align their actions with public good. Many business leaders are committed to running their businesses in a way that delivers the most positive impacts possible – doing the right thing, because it is the right thing to do. CISL’s job is to help them.
Because, right now - in the light of greater globalisation, more fluid interconnection, faster changes and bigger challenges – we need to be clearer, cleverer and more rigorous about how to think through and address the implications of business choices.
Today CISL has published a report, ‘Business, justice and the new global economy’ which offers businesses a new framework to think through the implications of their actions on the people they affect. By making the business case for taking justice seriously and looking at the different ways of conceptualising justice, we hope to equip businesses with a new process to reflect on their decisions, hopefully delivering better outcomes. This starts to bring more academic rigour to mapping the social implications of business actions, as is increasingly so with the environmental implications.
This will be increasingly crucial as the role of business and its relationship with government evolves, for example, on climate change. Historically business lobbying and operations were long regarded part of the problem. However, during the negotiations of the Paris Agreement it was apparent that positive business voices were part of the solution and after the election of Donald Trump to the US Presidency, over 300 US-based businesses clearly reaffirmed their commitment to climate action.
That’s essential. After all 2016 may have seen innovation, inequality and political shocks, but it’s also seen climate records tumbling and climate change accelerating. But climate action must be delivered in a positive and inclusive way – listening to all communities, keeping them engaged, keeping sight of the trade-offs and managing them. In transitioning from an old, dirty economy to a safer, more sustainable one, we need to make sure individuals and communities are able to prosper.
Dealing with complicated systemic challenges like climate change, in an increasingly volatile and unpredictable world requires leadership from business that engages with that complexity, and intelligent partnership with governments and investors to deliver effective, long-term action.
CISL’s new report can help companies think through the kind of actions and commitments they should take and the collaborations we run, such as the Green Growth Platform, can allow the deeper discussions required between policy makers, businesses and investors that can help unlock thoughtful but committed action.
This kind of approach is necessary and inevitable if we are to face up to the challenges in front of us.
Eliot Whittington is Deputy Director of Policy and Climate Change at the University of Cambridge Institute for Sustainability Leadership.