Episode 22: How to sell sustainability to business leaders featuring John Elkington

The transcript highlights below have been edited for clarity.

How sustainability became a C-Suite issue

Mark Lee

Let's start with the new book, “Tickling sharks: How we sold business on sustainability”. Did we sell business on sustainability? It seems very much a work in progress and we're living in a moment of backlash with companies walking back some of the commitments they've made.

John Elkington

I think we did sell business on using the word sustainability, whether they properly understand what they should have been meaning when they spoke about that concept, I'm not so sure and I think some of these political challenges that we now face are in some ways inevitable. I've been looking at the trends and particularly the cycles and waves in this space since 1994. You go from boom to recession or to even bust and I think we are in a recessionary moment both with ESG and I think increasingly with sustainability.

I've spent my life working in different parts of the world and very often to start with, very powerful people in business would ask the question, why are you doing what you're doing? I mean, are you a communist? There was this assumption that you had to be either clinically insane or politically deadly to the capitalist system if you were promoting the environment or later concepts like sustainability, but then over time, that shifted. The idea of the book was let's look back at 75 years of life. Let's look back at 50 years of professional engagement, environment and sustainability, but along the way, let's just explain to people what it was like at the various different stages in all of this, and do it in a relatively candid way.

You and I worked with Bill Ford at the Ford Motor Company. One of the stories I tell in the book was when they did the tire recall exercise. I was asked by the Wall Street Journal while we were working with the company, is this Ford’s Tylenol moment? Where they've gone way beyond what anyone could have sensibly expected of a company like this. Hundreds of people had been killed, when these firestone tires primarily burst in hot conditions in Saudi Arabia, Southwestern states in the United States and so on. And my answer for publication was no, they haven't. I think 6 million tires which was the first recall, is a good start, but Ford is still making the point that these are Firestone tires, not Ford tires. I don't think many people when they buy a particular automobile or car, think that it's made up of lots of different brands and offerings. It's a Ford car and you have to take responsibility for that.

I tell the story of turning up in the Ford boardroom in Dearborn, and having Jacques Nasser, who you will remember as CEO, running around the table, basically asking what people thought. This was the day after the article came out and he started with me and said I do not need to talk to you to understand your view of this. And I think in a way that the book is an attempt to try and explain why what we have done collectively wasn't pure consultancy. It had at times a slight political edge and I always said I don't want to be neutral. I want to be objective but I want to be neutral, say 15 years into the future.

Mark Lee

I see a business world that is much more aware, informed and better at aspects of sustainability than decades or even a few years ago, so where have we made some of the more striking progress in your mind?

John Elkington

Well, part of the story I tell is what it was like to approach business, what was then called industry very often, from the outside and try and get an audience or try to engage people. It was very, very difficult indeed. Whereas these days we take it for granted. We have access to boardrooms and C-suites and investment houses and so on. That wasn't true 40 or 50 years ago. So you could say that is an achievement, but I think one of the driving forces has been a generational shift in the senior leadership of business.

In business, a leadership generation is probably about 7-8 years and it's probably shrinking now. So, we've probably gone through 7 or 8 generations since I started. The people who have come up, although their business school, MBAs and so on didn't necessarily give them all that they will need moving into the future on issues like sustainability, they are much more aware of these sorts of issues. They are absolutely seized with the idea that somebody, at some point, is going to have to do something on all of this. They'd really rather it was somebody else and later. And I think what is being impressed on increasingly is that this has an enormous urgency.

One of the things that's really struck me and I remember it in the 90s, particularly in the United States. I would talk to CEOs, and they would say I'm getting beaten up around the breakfast table by my children saying, you're destroying the environment. And I've heard that message over the last sort of 2.5 to 3 years, particularly in Europe with senior business leaders, saying this has become a family issue. I'm almost being asked, when did you decide to become an eco-criminal? And so, I think that's one of the drivers.

The future of corporate sustainability strategy and disclosure

John Elkington

Another driver is that the regulation has shifted. I think there are dangers there, that it drives people towards the compliance mindset, and it puts a lot of this in the laps of lawyers. I don't love lawyers at the best of times, they're not wildly innovative and we need incredible innovation at this point in time. When you and I first met, we were working on things like sustainability reporting when it wasn't really a thing, when companies really didn't want to do it. I remember Shell telling me, a very senior person, “Shell will never report, we're too big and too complicated”. And then SustainAbility helped them do their first ever sustainability report. If you look at the surveys now, what you find is something between 96-98% of major companies around the world now produce a sustainability report.

We now have in the EU the Corporate Sustainability Reporting Directive, which means a lot of other people will be pushed in that direction too. The question in my mind is whether we've let supply of sustainability linked information run ahead of demand. Who is using this stuff? I think AI may have a role to play in that, but I think unless until we start to use that data, that information, and turn it into market intelligence and then drive system change with that intelligence, I think a lot of this is like a bit like genuflection in church, it's something we do because we have to.

Mark Lee

The piece I want to come back to is the recession comment and maybe you could go back to 1994, explain how you've talked about sustainability progress in both up waves and down waves?

John Elkington

I got involved in the late 60s, early 70s, in environmentalism and it was very clear that it had a peak in 1970 around the first Earth Day, and then it waned after a period and then it would come back and then it would go away again. So, I sat down with Nick Robbins, now a professor at LSE, and we just thought, what's the pattern here? And what we managed to do was to identify a series of wave structures and down waves. Doug Miller, who was then at GlobeScan, looked at our patterns and said we see this in our surveys around the world. It doesn't completely verify our thinking, but I’ve now tested it in something like 50 countries around the world and only twice had people push back.

The point I've come to recognize over time is that there are peak periods when everyone gets massively excited and everything mainstreams, as ESG has done in recent times, and then you have the correction moment, you overshoot and have one of these Minsky moments where just people lose connection with reality. That's why I think these down waves or sort of ESG or sustainability recessionary periods are vital to longer-term health.

My sense is two things. One is that the intervals between the peak periods are getting shorter because the reality is just pushing in harder and harder on companies. But secondly, one of the books that had a huge influence on me was the structure of scientific revolutions by Thomas Kuhn, where he talked about paradigm shifts taking about 70 to 80 years to crank through. We're about 65 to 70 years into the one that we're talking about here, and that's why I think the next 10 to 15 years are going to be extraordinary. I think more change is going to happen for good and bad in the next 10 to 15 years than in the half century that I've been involved.

Mark Lee

What happens in the down waves that is essential? Why do we need them as much as the racing forward in the peaks when it appears we make more progress?

John Elkington

Well, partly it's a shakeout. There's a period where a lot of people go bankrupt or go to the wall. They can't make business sense of what they've been doing. But more importantly, there is a reflection period and then there is almost a reinvention period and people come back, the ones who survive, a bit more coherent, a bit more strategic. There's more momentum behind what they're doing. So, I think this is true in economies as well. We don't welcome recessions, but they do clean out a lot of dead wood.

I think this one is going to be relatively short, a lot will depend on what happens in November in the US presidential elections. But I almost think regardless of what happens there, this will, over a four-to-five-year period, come back very, very strongly indeed. And quite surprisingly for a lot of people it will have momentum, which they simply did not expect because we've been holding back something, which has this extraordinary kinetic energy and is yearning to go exponential in terms of solutions to try and match the pace of the problems and challenges.

I was at Rothschild and company yesterday and I was asked during the discussion period whether I thought we would solve this and I said there's no guarantee that we will, every previous civilization has gone down, that's what civilizations do. I think this is solvable. I think we can do it, but we're leaving ourselves a precariously short window of opportunity in which to do that. And people ask me, and I should ask you the same question, whether I'm optimistic about this. I said, well, it's qualified optimism in the sense that my studying of history persuaded me that our species tends to do its best work, its most radically innovative work, when it's backed itself into a corner. And that's exactly what we've done on climate change and biodiversity. But given what you see, are you optimistic? Do you think we will change this? If so, it won't happen equally around the world. How are you thinking about it, Mark?

Mark Lee

I'm more optimistic than five years ago, which I think if you had asked me five years ago, I would not have predicted that. There are so many, not just committed and motivated people, but incredibly informed and expert people in business, and that's part of how our careers have changed, right? That business used to need organizations like SustainAbility or Volans or ERM to advise them on what this was and how to begin to approach it. And they still need that on aspects and issues in the agenda, but mostly they need people to help them do it. So, we have not by far delivered yet, but I find it incredibly heartening to be in a different era of operationalizing and seeing really ambitious visions for how we make the agriculture system regenerative, how will we decarbonize the entire economy on the timeline necessary etc.

And you've probably seen some of the work that people like Nigel Topping and global optimism have done on how our progress on new technologies, specifically low carbon in Nigel's case, we tend to project in a linear fashion and it never goes that way. It kind of runs out on a line until it turns into the hockey stick. And for all we worry about our climate progress, the rate of adoption of EVs, the distribution of solar, the distribution of other low carbon forms of energy, our progress on battery storage, all of it is exceeding projections by so much, it's almost laughable. And yet when we make our next set of projections, we tend to go back into a linear thinking model. There's never this, ‘oh maybe what we need to do is learn how to accelerate the curve instead of project out on a nearly flat line’. More people, I think are getting that and more people are doing that, and that leads to some of the investment and maybe the innovation you were seeking in one of your comments earlier.

One of the conversations that's been going on around us has been Unilever's new sustainability plan. This year they shrank their number of sustainability goals. Many have come back at them and said, this is terrible. Unilever has reduced its ambition. This is a stepping back, nightmare. I wonder what you think? Is it a misstep?

John Elkington

It's certainly not a nightmare. It's exactly what you would expect companies to do. Just to declare an interest, I've worked with Unilever since 1986, so I've seen the company go through a fair few cycles and Paul Polman was one of the people who put an endorsement in the tickling sharks book. I'm wedded to the idea that Unilever is an innovative company broadly with the right intentions. I've always worried about the way that they tend to dominate the GlobeScan survey results, for example, alongside Patagonia. I think Patagonia, because of its ownership, has been able to do something quite remarkably different in terms of giving ownership to some considerable degree by proxy to Earth. Unilever, I think is doing what a lot of companies are starting to do. We saw Ford doing it on diversity, equity and inclusion, Volvo and Mercedes-Benz doing it on electric vehicles and we've seen Shell do it. Companies have made these bold declarations without really thinking very much about how we make this reality and particularly how do we get rewarded by the market for doing some of these things, we're promising to do. I think they're waking up now to the fact that the markets as they're currently configured are not going to reward them in quite the way that they perhaps expected.

But again, I think that's important and Jonathan Porritt is one of the people, having chaired the internal advisory board of Unilever for so long, who's really gone public saying this is disgraceful. When there was a stakeholder meeting, a lot of people were saying to Unilever, it's a tragedy that you're doing this because it's going to dissuade other companies, other clients of ours, from doing the right thing. But I don't think that's a terribly sensible way of coming at this. I think this is the nature of the corporate organisms we're trying to influence. They are very sensitive, there have to be market signals. If the markets don't signal positivity, well, this happens. So now we've got to say, what do we do to shift the markets?

How to engage senior leaders on sustainability

Mark Lee

You have been writing a series on how to go about tickling sharks, which of course sounds very dangerous. The titles of each of the 10 tips gives you hints as to where they go. I wondered if you could pick a couple of the 10 tips and tell us how to go about tickling sharks - getting senior leaders to do more or as influencers.

John Elkington

One of the things I think I've always done was approach people and ask whether I can speak to them. What I would say to people, and this is particularly true after COVID and the lockdowns, is we slightly got out of the habit of going out and seeing almost pockets of the future, as Bill Sharpe calls them. Going to visit people who are doing extraordinary things that should be impossible, that in many people's minds are still impossible. As somebody said once, if something exists, it's unlikely to be impossible. So go and see these people, engage them. See what you can learn from them. See how you can support them. See if you can bring them back into your organization to share what they're learning along the way to some of your colleagues and I think the learning that can happen in that sort of situation, experiential learning is a lot more visceral, but it's long lasting.

But be very careful. These ‘sharks’ are dangerous. I mean, not quite like great whites, but they have it within their power to damage people's reputations. Don't be missionary in what you do. Don't tell people what you think that they should do without having a very clear understanding of who they are, what they're trying to do and where your recommendations fit into all of that.

After Hurricane Katrina hit in 2005, Walmart challenged their supply chain. Two companies pulled me in a very short order, one was DuPont, one was 3M. A board member came up to me and said why do you use humor in what you do at this sort of level. And I thought I know I'm dead in the water, she's going to go for me, but not at all. Her training was as a psychologist, and she said she watched me as I did what I did. And she said it was effective for two reasons. The first was that I was playful with my own agenda. I wasn't a missionary and that relaxed the people in the room. But then secondly, it was playful for them, this isn't telling jokes, it's situational. You play off something people are saying in the moment that they say it and she said people do not typically do that. They take these people very seriously and she said the reptilian part of their brain is probably responding by saying if he can do that, if he's got the nerve to do that, his army outside the walls must be huge. I never really thought about it that way, but a light touch, I think is enormously important in all this. You've got to have fun. You've got to enjoy some of this stuff. You've got to find it exciting. And if you do, that translates, people pick that up and they want to be involved too.