This past week marked a UN General Assembly and Climate Week like no other—and I’m not just talking about the virtual nature of these events. The conditions under which they took place are impossible to ignore.
The climate crisis has reached every country with massive flooding from Bangladesh to Europe and wildfires ravaging the Amazon Rainforest and the West Coast of the US. Inequality, which was already at unthinkable levels globally before the COVID-19 pandemic, has been further magnified over the past six months. The world is entering a long-overdue reckoning with the impacts of systemic racism as calls for justice grow louder.
And, amid all of this, we continue to measure business success by financial profit alone.
More often than not these days, I find myself questioning the root cause of the convergence of crises we’re now facing. Why do we have a planet that is burning? Why is the social contract that workers should be able to depend upon broken? I believe there is a critical system error that has gotten us here—and that is shareholder primacy.
Maximizing value for shareholders has driven decades of unchecked growth and value creation for the few. Now, we must RESET our economy to deliver shared prosperity and wellbeing for all stakeholders.
I’m proud to stand with business leaders, consumers, activists and artists from around the world calling for this RESET. We carried this imperative forward throughout the events surrounding the UN General Assembly and Climate Week and I was so happy to see it echoed throughout the week.
An economic RESET requires courageous and holistic leadership. We know it’s no longer enough for companies to lead on only one letter of ESG. That’s why we brought together the leaders embracing this holistic model at the SDG Business Forum. Together, panelists from B Team companies Natura &Co, Safaricom and Unilever shared how they are implementing transformative practices and helping to ‘build back better.’
The need for a RESET shone through throughout the discussion. As Oxfam GB CEO, Danny Sriskandarajah said, “If we’re going to build back better, we need to change the architecture—the incentives, the structures in place, the nature of how capitalism works.”
His sentiment was echoed by B Team Leader and former CIO of Japan’s Government Pension Investment Fund, Hiro Mizuno, around market performance. “Market performance is disconnected from what is happening on the ground. We are borrowing from future generations and using that money to ease our pain today,” he said.
Market performance is disconnected from what is happening on the ground. We are borrowing from future generations and using that money to ease our pain today."
Hiro’s words reminded me, and I’m sure many others, of our interdependence. The health and well-being of future generations depends upon our actions today. That’s why a new economic model must be designed for interdependence—recognizing the relationships between healthy people, the planet and our economies.
Last week, we came together with our partners in the We Mean Business coalition to talk through what corporate climate leadership must look like in the 2020s to deliver on this imperative. The bar for business action on climate is rising and it’s no longer enough to only act on climate within company walls.
We also saw some progress from governments, while others continue to lag. The European Commission is taking on the call from over 170 European businesses, investors and business networks to reduce greenhouse gas emissions by at least 55% by 2030. And China pledged to reach net-zero greenhouse gas emissions by 2060.
If we’re going to build back better, we need to change the architecture—the incentives, the structures in place, the nature of how capitalism works."
But we know we cannot solve the climate crisis without addressing the unsustainable levels of inequality around the world. That means investing for justice in our economic RESET—ensuring leadership is more inclusive and those currently marginalized have greater voice, power and opportunity.
I’ve long advocated for disrupting the crisis of conformity in leadership and know that we can't change how we lead without changing who is in power. At The B Team, we believe CEOs have a responsibility, and an opportunity, to confront this crisis. That’s why we released Gender Balance and Inclusive Cultures: A Guide for CEOs last week. This Guide encourages CEOs to combine a personal commitment to inclusivity with business tactics to transform their organizations. We hope many will take on its recommendations well-beyond UNGA week.
We certainly have our work cut out for us beyond business. Last week, we saw 50 male heads of state take to the virtual UN podium before one female head of state could. We also saw the UK announce an all-male team of politicians hosting next year’s COP26. This is unacceptable. We know that there is no climate leadership without women’s leadership.
As we shift who is in power, we must also shift our definition of success. That means accounting for all stakeholders in a new economic model—measuring what matters and coalescing behind common metrics. Well, last week we saw accountants come together to do just that. Together with Brian Monyihan of Bank of America, the Big 4 accounting firms released a common reporting standard for ESG metrics and other measures of stakeholder capitalism. If accountants are turning into change warriors, we know the momentum for a RESET is growing.
There are indeed many signs of positive momentum and movements around, but we all know they are still not enough. From UNGA to Climate Week and beyond, business must continue to answer the call to RESET our economy, so must our governments and so must citizens. At The B Team, we’ll be asking more of business. We can’t do it alone, though, and we hope you’ll join us on the journey to design and deliver an economy that works for everyone.