There isn’t a day that goes by where I don’t have a feeling that civilization is standing at a new crossroads of another dilemma. The path it decides to take on each issue will impact not only the lives of the present generation, but also those of the generations to come. In recent years, the notion of sustainability has found a firm place on the top many agendas. Climate change, marine pollution, biodiversity loss, human rights violations, scandals in corporate governance – barely a day goes by without some aspect of sustainability hitting the headlines. But are we actually doing anything about it, beyond lip service?
Thankfully, there is not a lack of participation to improve the status quo, as a variety of businesses and enterprises embrace a purpose that goes beyond meeting short-term shareholder targets. It is clear that there are many good reasons for all of us to embark on a sustainability journey. Growing public concern has resulted in a tightening of regulations across many regions in areas such as CO2 emissions, closed loop recycling, and gender inequality. This is a good step in the right direction.
It is my conviction that any corporate strategy developed over the next five years should also be a sustainability strategy. Sustainability is an issue that is here to stay, and companies that fail to address it could be running substantial risks: of damage to their reputation and the environment, problems in their supply chains, and so on. By contrast, businesses that choose to tackle the sustainability question head-on may find that doing so can pay great rewards.
In sustainability, there lies great opportunity. It has been quite inspiring to see Generation Z at the helm of activism, spreading their message rapidly throughout social media. As they enter the workforce in even greater numbers, their voices have increasing weight when it comes to corporate behavior. They are forcing their employers to develop a new sense of purpose. As a customer group, they are putting their money where their mouths are, choosing sustainable products and services over less sustainable equivalents.
In the past, humanity has often stood at a crossroads. History shows that we are capable of changing our behavior. Trying to predict the future will be foolish: there are infinite possibilities for what lies ahead. However, we can reduce this complexity by studying scenarios – pictures that help us imagine potential futures and prepare accordingly.
Here, I present four scenarios, imagined projections of what the world may look like in 2050. Together, they form a panorama of the range of different futures with regard to sustainability – a “Sustain-O-Rama”, as I like to call it. The different scenarios will be analyzed using the increasingly popular ESG framework, which looks at the three core dimensions of sustainability: environmental, social, and corporate governance issues. The implications for businesses and society differ for each of the scenarios and affect a wide range of areas, from competition to differentiation, innovation to recruiting. Ideally, these scenarios should be slightly exaggerated and provocative to stimulate reflection and debate.
Four Scenarios For 2050
TWO AXES
Motivating Factor
Who is in the driver’s seat when it comes to sustainability: society or the regulators? In a society-driven scenario, consumers set the priorities through their purchasing behavior and companies respond appropriately. Regulators play a secondary role, creating the framework required for change. By contrast, in a regulator-driven scenario, countries and specific regional entities employ a policy-based approach, enforcing strict, detailed regulations. Companies and consumers contribute their ideas but must operate within the legislation laid out by the regulator.
Intensity of Change
What is the mindset behind the drive for sustainability? A desire to “break new ground” will involve rebuilding current systems and encouraging transformative and disruptive developments that will challenge our thinking. The pace of evolution will be fast. By contrast, a desire to “turn back the clock” means clinging to old habits, growing consumerism, and continued exploitation of the planet. In other words, an egotistical approach on the part of consumers, with potentially only fragmented solutions implemented by government, is a Swiss cheese of utility toward any improvement.
Scenario #1
IN THE ‘PLANNED NEW WORLD’ SCENARIO, regulators are the main driving force, and the intensity of change involves breaking new ground. In this scenario, by 2050, regulators have enforced strong policies, plans, and laws in an orderly and coordinated way that society and companies must obey, with non-compliance heavily sanctioned. The system has been disrupted and redefined. Being sustainable is no longer a choice, it is required by law.
Here, major regulators around the globe will have started in the 2020’s to enforce changes aimed at achieving climate goals and the United Nation’s Sustainable Development Goals (SDGs), which serve as an important framework for actions. The climate catastrophe will have been averted, global warming limited to just 1.5°C, and global poverty reduced. We are now living in what could almost be described as a “state communism” with regard to sustainability, with laws covering every aspect of our lives.
On the environmental front, governments and regulatory bodies will have enforced a globally coordinated system to reduce carbon emissions in the early 2020’s. Now, in 2050, being CO2 neutral is not enough; the law requires companies to be CO2 negative. Offsetting CO2 emissions is only possible with clearance from the state. Regulations on the use of natural resources have been refined, with closed-loop recycling now a requirement. The environmental impact of every company is digitally tracked, and the company’s performance measured against a government-allocated budget for CO2 emissions, water usage, and so on. Any attempts at “greenwashing” are punishable with harsh prison sentences.
Major legislation has also been enacted affecting the social dimension. Human rights violations are heavily sanctioned, forcing companies to develop additional policies and pay for independent audits in order to eliminate any risk of potential crimes. Businesses also have to reflect the diversity found in society in terms of gender, ethnicity, sexual orientation, and age in their workforce.
In terms of governance, businesses, enterprises and even small business owners are now obliged to invest a fixed percentage of their revenue in green technology in order to meet the new sustainability standards and compensate for any damage caused in the past. They are also taxed based on their ESG score.
Scenario #2
IN THE ‘RACE FOR SUSTAINABILITY’ SCENARIO, the intensity of change is still about breaking new barriers and new ground based on rapid growth, but society is now the main driving force. Thus, it is society, and not regulators, that has caused disruption, changing values, evolving consumer behaviors, and redesigning systems. The public has embedded sustainability habits deep in their lifestyle, forcing companies to respond as a result of purchasing behavior. For businesses, the race for sustainability is on.
This shift in mindset has not happened by chance – the post-pandemic new normal notwithstanding. In the mid-2020’s, droughts across the world will have led to territorial conflicts and mass emigration. Combined with increasingly frequent storms and extreme weather events in several regions of the world, this has served as a wake-up call for society. People have realized that if they continue as things are, the planet will be destroyed. Although these events have caused irreparable damage to the world, society has successfully transformed itself and embraced a more sustainable lifestyle.
On the environmental front, consumers began to demand that companies meet negative CO2 targets, and these have now become the new normal. The race for more sustainable products has been possible thanks to major leaps in technology in the area of CO2, such as the carbon dioxide catcher. Technology has also paved the way for a “circular economy plus”, in which, although not obliged to do so, companies report their natural resource and CO2 footprints, enabling consumers to make sustainable choices. Businesses are also becoming greener on the inside. For example, employees have started using social media apps to blow the whistle on any environmental misbehaviour, such as the incorrect treatment of waste. By 2050, I, too, have finally become compliant to stop using plastic water bottles too.
In terms of social factors, companies will have fully implemented diversity initiatives in this scenario, responding to strong social pressure. They also now find that they need to be diverse in order to attract the best talent, for which competition is fierce. Corporate giving and cause-related marketing has also experienced a revival, and employees actively engage in activities such as beekeeping, planting trees, education, and the like.
As far as governance is concerned, firms are now truly transparent about their supply chains. Any incidents are reported honestly and investigated in full. From a steering perspective, supervisory boards routinely open their doors to NGOs. Some companies go even further, giving artificial intelligence (AI) a vote on the management board in the name of the planet. Most firms have also linked their CEO pay to sustainability, with performance closely monitored by the outside world. Not infrequently, firms donate any profit above their moderate growth targets to deserving causes. Finally, new capital is only available for companies that have a sustainability score above a certain threshold.
Scenario #3
IN THE “MINIMUM VIABLE MASTER PLAN” SCENARIO, the approach to change – or rather lack of change – is one of turning back the clock and the only driving force for sustainability is the regulator. Although regulators have identified the need for change, companies continue to seek out loopholes that allow them to continue, business as usual. Those that may be ahead of the curve are making headway on their sustainability initiatives, but without enough power to wield broader adoption from others.
No drastic action has been taken by 2050. The changes enforced by governments are small, and neither climate goals nor SDGs have been achieved. The world is plagued by wildfires, overfishing, food scarcity, and poverty. Sustainable technology is found in some countries and regions: for example, electric mobility in Europe and the United States, and hydrogen-based mobility in Japan, but these are isolated success stories in specific fields. Strategies are fragmented and no global standards exist. Instead, governments have become more nationalistic and egotistical, using any new technology or resources purely for their own benefit.
With regard to the environment, minimum regulations have been enforced, but these hardly repair the damage that has already been done. Companies are required to define CO2 targets, but they are not binding, and no sanctions are imposed. As a result, “greenwashing” by companies is widespread. Lobbyists successfully weaken or prevent any regulations that might change this situation. One of the few areas where governments have seen some success is in reducing waste, controlling pollution, and better managing natural resources. However, urban waste is still a major problem and the fight for scarce national resources is increasing year by year.
On the social front, regulators have tried to implement diversity, but their efforts have remained at the level of recommendations rather than binding legislation. Globally, human rights violations are on the rise, and companies are only interested in taking action if it costs them nothing.
In the area of governance, although an environmental tax has been introduced, plenty of offshore tax havens exist enabling companies to avoid paying it. In some exceptional cases, firms have linked CEO pay to sustainability, but to minimal effect. Sustainability scandals are the new normal.
Scenario #4
FINALLY, IN THE “EVERYONE FOR THEMSELVES” SCENARIO, the general attitude is again one of turning back the clock, but the efforts made in the direction of sustainability are driven by society, rather than the regulator. Consumers value sustainability, but only if it fits into their lifestyle and it does not come at a high cost. Greta is approaching 50 years old and she is entering week 1,680 of her school strike, her climate protests have hardly any impact, and climate goals have been missed by miles. By 2050, large parts of the Americas, Africa, Europe, and Asia are no longer habitable due to desertification and extreme weather conditions and more than a billion climate refugees are on the move. Oceans are overfished, the air is polluted, and food is scarce. Yet those parts of society that are not directly impacted are indifferent, choosing to ignore the climate protests, refugee flows, and extinction of species.
On the environmental front, there are no CO2 targets in place and climate change is now unstoppable. Companies still largely depend on fossil fuels and nuclear power.
In the social dimension, the few achievements in diversity dating back to the 2020’s have now been wiped out. Powerful men rule the world and society idealizes the image of the 1950’s housewife. Human rights have deteriorated over the years and people in developing countries face extreme poverty, harsh working conditions, child labor, and war. Companies have a hire-and-fire mentality: after all, there is plenty of talent on the market. Short-term profit is king. Companies still donate, but only to gain access to sporting or entertainment events, which have taken on a gladiator-esque brutality.
Supply chain governance activities have stopped, as price is now the key criterion for success. The only major risk that companies face is that of “green terrorism” by activists.
THE DRIVE FOR SUSTAINABILITY has fundamental implications for everyone’s long-term viability and success. Going forward, any strategy process will have to address sustainability. Indeed, we can go even further: any community level, enterprise, government or broad policy strategy developed over the next five years will in reality be a sustainability strategy, as this is the one issue that will dominate all future top-level discussions. Society must wake up to the importance and urgency of sustainability. But businesses, too, need to set out on a journey of transformation.
The scenarios presented here are deliberately provocative. But one thing is clear: real change is essential if our future is to be worth living. The question is not whether change will happen, but how fast it will take place, and who will be in the driver’s seat – society or regulators? Simply continuing along our current path, as represented by the scenarios “Minimum Viable Master Plan” and “Everyone For Themselves”, will lead us to a future that is far from desirable.
What if we fail to act on sustainability? It is apparent that passivity on these issues poses a substantial risk to everyone, including free enterprise and businesses – a cornerstone for a thriving economy to enable implementation of change – a risk that will increase exponentially over time. This could take the form of supply chain risks, reputational damage, environmental risk or risks of other types. Bottom line: if we fail as a society to address sustainability in our overall behaviours, we are simply playing with fire.
At the end of the day, it is not just about risk. Sustainability also creates ample economic opportunity. From driving energy efficiency to increasing recycling or rethinking business models to discovering new market potential, society will find that addressing sustainability head-on can pay great rewards.
As sustainability increasingly continues to dominate public debate and motivate consumers in their decisions, I encourage you to look at “Sustain-O-Rama”, a panorama of sustainability scenarios. This advice is purposely to be bold in order to take a strong stance on sustainability. We all have a vital role to play in ensuring a livable future, as the need to act is urgent and the potential to create a sustainable future is within our reach, if we are willing to put in the work.
Photography: Tom Fisk/Pexels