…and some thoughts about what they mean for 2020
2019 saw a marked increase in the roles that corporate responsibility—and particularly sustainability—played in major marketers’ overall business plans. And that trend is likely to accelerate in 2020. Here are some things that stuck with us from 2019 and some thoughts about how they might carry us into the new year.
Designer Bruce Mau named a turning point for how business and society must approach sustainability in a July piece in Adweek. The metaphorical pivot here is substantial: No longer is sustainability a destination we hope to eventually arrive at in some distant future. It is a new reality that business must adapt to now, in everything it does. Mau’s point is that we need to redefine sustainability as a new design ethos that says this is how it’s going to be from now on.
The quickening of the pace around sustainability reflects a broader change in the conversation around climate. Driven by extreme weather around the world, the language around climate became more urgent and action-oriented in 2019. The use of the term climate emergency increased a hundredfold in 2019, leading a “demonstrable escalation” in the language around climate, according to Katherine Connor Martin, an editor at Oxford Dictionaries. “It reflects a real preoccupation of the English-speaking world in 2019.” Expect more in 2020.
“Our environmental data is moving at the quality and speed of much of our financial data.” (GreenBiz)
Slow data has been a major impediment to accelerating the pace of sustainability inside many companies, and 2019 saw Big Tech stepping in with new tools to address the problem. Salesforce led the way with its Sustainability Cloud, a platform designed to collect emissions data in close to real time. Closing the data gap between sustainability metrics and other measures of corporate performance remains a key priority for sustainability professionals—and increasingly their colleagues in investor relations.
“We estimate over $20 trillion of asset growth in ESG funds over the next two decades.” (Markets Insider)
Investments aligned to environmental, social and governance criteria reached a tipping point with mainstream advisors in 2019, driven by investor demand and strong performance. According to Bank of America Merrill Lynch, “ESG assets under management have grown the fastest among smart beta strategies—a compound annual growth rate of more than 70% over the past five years.” And Forbes proclaimed, “ESG is the new CSR,” noting that “while CSR was often a disconnected department with limited resources, ESG is a fully integrated strategic objective that’s closely connected to the mission of the company.” Look for the big money to continue demanding more and better ESG data from companies in 2020.
Once the province of operations and finance, supply chain management got sexy in 2019, driven by a growing public interest in how things are made. Look for this trend to expand beyond food and apparel in 2020, where it has already become a competitive differentiator.
“Brands should remember that saying one thing and then doing another is usually worse than just being straightforwardly awful.” (Contagious)
This year saw the continued rise of “woke” branding, as companies responded to consumer pressure to take stands and speak the language of social purpose. However, 2019 also brought multiple reminders not to forget the responsibility part of CSR in pursuit of higher purpose, as critics like Rutger Bregman and Anand Giridharadas advised companies to forego philanthropic moonlighting until they attend to basic responsibilities like paying their taxes and paying their workers fairly. Above all, 2019 was a reminder to avoid stories of contradiction and to master the art of apology when the transparency gods come knocking.
As companies wrestle with the dilemma of how to balance social responsibility with financial performance, who can get the job done? Executives tasked with developing sustainability best practices will increasingly enter the C-suite, says Marie-Claire Daveu, CSO of Kering. “A successful CSO has to be a visionary thinker, a creative problem solver, an operational implementer and a collaborative leader,” says Daveu, pointing to one trend we look forward to more of in 2020.
On we go to 2020, into a world full of change. The past year feels like one where important conversations were had and new realities acknowledged, most notably the Business Roundtable’s declaration that corporations exist to serve all stakeholders, not just shareholders. As Fast Company notes, “Business culture is shifting. But words alone won’t make necessary system change happen.” Here’s hoping 2020 is a year of action.
A version of this article originally appeared in Ad Age.