Taking regeneration on board

Many CEOs still assume that sustainability implies a bit more transparency, a trifle more accountability, a dash of corporate philanthropy. Big mistake, huge. As oil companies like Chevron, Exxon and Shell are discovering, a seismic shift is happening in how society views fossil fuels. Shell’s CEO, Ben Van Beurden, recently wondered aloud whether his industry would find itself on “the wrong side of history”? His company’s defeat in a major court ruling, forcing a massive acceleration in its decarbonization efforts, and Exxon’s simultaneous defeat at the hands of a minnow, an activist hedge fund called Engine Number 1, suggests that the tide is turning—fast.  

Corporate top teams that think they can lobby their way through using firms like Burson Marsteller (later known as BCW Global) notorious for defending the flanks of the asbestos, tobacco and fossil fuel industries, risk being exposed.  

And, cranking up the pressure, a parallel shift is under way. The technologies that the PR and lobbying folk worked to so hard to defend are being upended by a series of disruptions. Think of what Elon Musk and Tesla did to the auto industry. Picture what it was like to lobby to protect the flanks of a rogue brand like VW, only to find your client self-disrupting by pivoting into electric vehicles. If you want a window into how markets will be disrupted, track RethinkX. What’s already happening to the fossil fuel and auto sectors will also happen to sectors as diverse as cattle ranching and dairying, and financial markets.   

For decades, we have helped business embrace the ever-expanding corporate responsibility agenda—with recent additions including public access to health care, the malign effects of wealth divides, corporate tax evasion, and the unintended consequences of AI. But all that effort has signally failed to avert the incoming tsunami of “wicked” problems. That’s why we now hear so much talk about “resilience”—the resilience of individuals, families, teams, organizations, supply chains, industries, economies and, ultimately, of our climate and biosphere. Reason: the economic, social, political and environmental systems on which our wellbeing depends are wobbling, signalling serious instabilities. 

In launching the first-ever “product recall” of a management concept in 2018, through the Harvard Business Review, I have been one of the voices calling time on the CSR- (and now ESG)-as-usual agenda. Many leaders assume that talking up the need for resilience will ensure effective, timely action. Good luck. The only thing that will do that is a re-commitment by business and government leaders to sustainability as a regenerative agenda. Making things less bad, as challenging voices in the sustainability space have insisted for some time, is not remotely enough. Nor is the growing number of commitments to net-zero greenhouse gas emissions.  

All helpful, but what we need now is clear-eyed commitments to building a truly Regenerative Economy, restoring past damage and creating the conditions in which our societies and nature can flourish over generations. In short, the sort of long-term thinking and action spotlighted in that long-ago cartoon of the robot with its “3001” shoulder flash.  

This is an ambitious agenda, for which most boards are ill-prepared. To get a better handle on it, we are  working with Board Intelligence to prepare boards and C-suites for the coming challenges and opportunities. We already hear people like Walmart CEO Doug McMillon committing the giant retailer to becoming a regenerative business, while PepsiCo promises to regenerate 7 million acres of farmland. But, while welcome, even such initiatives as these are not going to be enough on their own.  

So the multi-billion—and some cases trillion—dollar question for your top team is this: What are you, and what should you be, doing to prepare your business to succeed in tomorrow’s Regenerative Economy?