At the end of 2017, Antwerp Management School appointed Dr. Wayne Visser as holder of the Chair in Sustainable Transformation. AMS thus enforces its long-term commitment to involving current (business) leaders in the study of sustainability and preparing the leaders of the future for global sustainability challenges. The Chair is supported by BASF Antwerp, The Port Authority of Antwerp and Randstad Belgium.
This is the first section of the interview, which focuses mainly on the importance of a structural approach to sustainability challenges. The second section will appear later, with a practical approach to the functioning of ‘corporate leadership groups’, which are established within the framework of this Chair for Sustainable Transformation.
Where does your interest in sustainable business come from?
Wayne Visser: "I think that my interest in the theme of sustainability emerged from an existential crisis in my teenage years, actually. I debated between studying comparative religion or economics. Eventually, I studied business administration with particular attention to values and ethics. That is where I could translate questions about the meaning of life into the themes of values and meaning in the business world. My PhD focused on the motivation of leaders in the sustainability field. Using existential psychology, I conceptualised four types of ‘purpose-inspired leaders’ in the world of sustainable business. That way, I ended up at Cambridge, at the ‘Institute for Sustainable Leadership’."
You claim that all worldwide efforts in sustainability and CSR of the past twenty years have failed. What makes you say that?
“A number of indicators of the quality of life on our planet are going in the wrong direction. They indicate increasing inequality between the rich and the poor, growing corruption, higher CO2 concentrations, loss of biodiversity, etc. Based on my research, I describe four types of sustainable business or CSR that are contributing to this failure. First of all, there is the defensive approach, in which shareholder-driven companies have to defend themselves against allegations of NGOs concerning the abuse of human rights or different forms of pollution. Think of Shell, Enron, Lehman Brothers, etc. Secondly, we see charitable forms of sustainability or CSR, in which philanthropic entrepreneurs establish several kinds of foundations to pursue noble goals. Think of the Bill Gates Foundation, Ford Foundation, Rockefeller Foundation, etc."
"In the third approach, the marketing department has discovered the sustainability or responsibility theme as a source for promotional activities. Extensive literature exists on greenwashing, which is practiced by many companies, such as Chevron, BP marketing on ‘beyond petroleum’, etc. In the fourth approach, managers want to include business values such as sustainability or responsibility in their business strategy, but that translation fails."
Usually, one considers the integration of sustainability in core activities to be part of the solution. You, however, consider them to be problematic. Where is it going wrong?
"Indeed, it is the least bad sustainability approach in the business community. I can see a number of problems arising there, though. My experiences as the director of the KPMG department for ‘Sustainability Services’ have taught me that managers include sustainability in their ‘total quality approach’ and, apply a ‘management systems approach’ to achieve this. This comes down to the application of the typical ISO standards, such as 9000 for quality, 14000 for environment, 26000 for CSR, 50001 for energy, etc. They are designed to help develop continuous improvements, which is a good thing. However, they depend completely on the discretion of the management in terms of defining objectives, on which the ISO-procedures have to be applied.
In practice, we see that the ambitions and the ‘sense of urgency’ is not related to the seriousness of the global sustainability challenges. Don’t get me wrong: in the course of my career, I have never seen so many efforts in the business community thanks to this strategic approach. Yet, many problems are getting worse than ever before, because the solutions do not relate to the roots and underlying causes of the problem, namely the design of the current industrial system in combination with an insufficient corrective market economy. That is why many in the business community feel satisfied about the delivered performances of the sustainability department, especially when they are able to publish sustainability reports in line with the 'Global Reporting Initiative' (GRI).
Moreover, those businesses are appreciated by the general public as well, not in the least because of their many commitments to socially beneficial projects. As an added benefit, their image as a sustainable organization is enhanced. Consequently, business managers will continue with the same strategy, the same business model and a similar design of products or services. Eventually, this evolution leads to a lack of incentive to think about ‘redesigning’ the business, let alone changing at the level of the industrial system."
Which factors contribute to the failure of these sustainability initiatives?
"I can see three different causes. First of all, the initiatives in terms of sustainability and CSR are usually incremental. This means that they focus on small, feasible steps to realize progress in practice. Think about efficiency gains, which are negated by higher sales volumes. The challenges are being sidelined. Secondly, many sustainability programs and/or structures do not concern the core activities within a company. Values such as sustainability or responsibility are often not integrated in the daily business activities and central business decisions. They are placed in separate sustainability departments, which produce separate sustainability reports. Thirdly, many sustainability initiatives fail because they are non-competitive. The cost price of sustainable products or services is too high in comparison to non-sustainable alternatives, which do not internalize external costs (by meeting environmental requirements and complying with human rights obligations, for example)."
"In short, sustainability challenges have not yet reached the general public, because the proponents of sustainability have been using the wrong stories - about doomsday scenarios, restrictions in daily life, and feelings of guilt about environmental impact. Actually, we have to tell a better story than the dominant discourse on growth and economic development. Sustainability essentially concerns catering to the evolving needs of current generations, while at the same time taking into account the needs of future generations. Those evolving needs of diverse customer segments present market opportunities, out of which value is to be distilled. That is one of the pillars of the ‘Sustainable Transformation Lab’, which I have set up here, at AMS."
"In short, sustainability challenges have not yet reached the general public, because the proponents have been using the wrong stories - about doomsday scenarios, restrictions in daily life, and feelings of guilt about environmental impact."
So far, you have mainly talked about the responsibility of businesses. Does the government have a role to play in this as well?
"Yes, it has. The government has major responsibilities, but it has been disengaging itself for the past fifty or so years. In the seventies, the deregulation of all kinds of economic sectors began, and political leaders wanted smaller, but more agile governments. They were counting on the responsibility of the entrepreneurs for self-regulation. Consequently, businesses did as little as possible. For me, it is obvious that the government can once again come to the fore, but mainly by setting targets in the long run. They have to grant businesses their freedom to achieve the desired results, for example in terms of CO2 emissions, labor rights, transparency, etc. Governments should not decide on what businesses have to do, like in India, where a law was enacted that requires businesses to spend 2% of their profits on CSR."
"I want to refer to an interesting case in the United Kingdom (UK), to clarify what governments can and cannot do. In the nineties, the business community and the government had reached an impasse on climate policy. Entrepreneurs did not want to take initiatives in CO2 emission reductions, unless the government could guarantee an unambiguous policy horizon for climate plans for, for example, 2020 or 2030. The government responded by claiming that the attempts at drawing up an unambiguous framework for long-term climate policy had been undermined by lobbyists. In that situation, we, the ‘Institute for Sustainability Leadership’ of the University of Cambridge, gathered together the most progressive entrepreneurs and leading officials of the governments.
In that ‘Corporate Leaders Group on Climate Change’, a discussion took place between the government and the business community, facilitated by an academic institution and supported by scientifically validated knowledge on climate-related challenges. One of the most progressive climate laws of the time was established that way. This kind of tripartite discussion between business, leading government and academics still exists today – not only in the UK, but in Europe as well. Based on this experience, I would like to give further effect to my Chair in Sustainable Transformation by setting up ‘corporate leadership groups’." More information about this will follow, in the second section of this interview.