Education - A Driving Force for Greater Sustainability

London Business School’s Ioannis Ioannou was recently invited to give a keynote address on the role of education in sustainability at an event organised by CSR HELLAS.

Titled, “Education 4 Sustainability”, Dr. Ioannou framed his talk around what he described as the “shadow” of the sixth annual Bill and Melinda Gates’ Goalkeepers Report, Dr. Ioannou noted that nearly every indicator of the UN Sustainable Development Goals is off track at its halfway point for attaining its stated goals by 2030.

Sustainability as a positive force for disruption, and the role that education can play in driving sustainability

Companies face unprecedented pressures for a new model of corporate leadership, acknowledged Dr. Ioannou in this talk. “Companies are facing pressures and expectations to integrate environmental and social impacts, and broader sustainability considerations into everything that they do. For example, customers are demanding more environmentally and socially responsible products and services, investors are integrating ESG considerations in their investment decisions, employees are attracted to companies with whom they align in terms of purpose and values, civil society and NGOs are increasing their level of activism towards companies while governments and regulators are adopting and implementing more laws and regulations related to environmental and social issues. On top of all that, science is telling us that we have already surpassed a number of tipping points, and that the stability of the planetary ecosystem is at risk.”

“Becoming Sustainable is easier said than done,” said Dr. Ioannou. “Most companies currently lack the knowledge, the skills, the experience and oftentimes the human capital that they require to successfully address all these demands and expectations. In other words, companies are faced with a huge disruption in business as usual. Disruptions are typically very difficult to navigate. That’s precisely why the corporate graveyard is packed with once iconic brands that failed to navigate such disruptions. Sears, Polaroid, Kodak, Blockbuster, to name just a few.”

Transformation and adaptation

One might describe sustainability as principally a challenge of transformation and adaptation to a rapidly shifting competitive landscape. And, observes Dr. Ioannou, it is a very fundamental transformation because every single aspect of an organisation needs to change, from finance to strategy and from the vision and mission of the organisation to its operations, every single aspect needs to be aligned. Transformation needs, at firm-level, new capabilities, new knowledge and innovative business models. In addition to changes to industry, systems-level changes through new ways of engaging in co-creation with supply chain partners might be considered. All of this is tremendously difficult to achieve. “We have seen only a handful of companies being successful, and even those, are far from being considered fully sustainable,” says Dr. Ioannou.

Disruption creates opportunities

Different motives drive companies to engage in activities aimed at a more sustainable economy. The demands of laws and regulations will of course be one driver, but many companies have identified promising business growth opportunities and seek to exploit them for commercial advantage.

The sustainability disruption also creates opportunities for new market entry. Dr. Ioannou offers the examples of the automobile industry’s Tesla, Beyond Meat and Impossible Foods in the meat industry, and Oatly in the field of alternative milks. “All of these and many more are young companies run by entrepreneurs who understand the shifting customer preferences, that understand the underlying sustainability issue that had to be addressed, and innovated new products, services or even business models to capture and rapidly scale up the opportunity. Therefore, large companies are faced not only with the challenge of becoming sustainable themselves but also, they are increasingly faced with more stiff competition from start-ups that are “born” sustainable.”

Navigating ‘Sustainability Disruption’

What does it take then to navigate the sustainability disruption? For companies, as well as societies to achieve the level of transformation required, and to address the challenges and leverage the opportunities that arise because of the sustainability disruption, the role of education is absolutely fundamental. Why? There are several key reasons:

• Education about frameworks and initiatives such as the Sustainable Development Goals (SDGs), planetary boundaries, Environmental, Social, and Governance (ESG), to name a few, increase overall awareness about the depth and breadth of the issues that we collectively face today. They highlight the urgency of the crisis. But also, awareness is important for inspiring and motivating people to take action, to innovate, and it empowers them to aspire to have a positive impact on the world through their lives, lifestyles, career choices and voting behaviours.
• Education builds a common foundation and a common understanding of the challenges that we face. In a world that is deeply polarised, establishing common ground is crucial. Think about what is currently taking place in the United States. Consider how a corrupt Republican party and the political right wing are viciously attacking ESG integration as “woke” and how they have historically undermined climate science by promoting climate change denial, Consider also how some irresponsible and dangerous Republican governors, like those of Texas and Florida, are attacking financial institutions for considering ESG risks and in so doing harming pensioners in those states via higher cost of capital. Education can play a huge role against politicising these issues and it establishes a robust, scientific, non-political common ground to start addressing them.
• Education offers the skills, the knowledge, and the frameworks that people need to develop a systematic, rigorous, and effective approach towards addressing the challenges. This is not to suggest that we already have all the answers, far from it. However, as educators we can offer a structured way of approaching the sustainability challenges, a systematic way of analysing them, and as a result, we can increase the quality, and speed of decisions that executives make and, in an ideal world, we may contribute towards reorienting their purpose towards more socially and environmentally responsible outcomes.

Dr. Ioannou concluded by mentioning some of the activities that we pursue at London Business School:

“We aspire to integrate sustainability issues into our core courses and across disciplines, and we develop and offer electives on these issues. We also pursue collaborations with other business schools and institutions (this is principally our Wheeler Institute climate initiative and its leadership role with Business School’s for Climate Leadership), we support and encourage our students, through their student clubs and we aim to serve as a platform that brings together managers, regulators, future and current business leaders and NGOs, and in so doing, foster broader collaborations. Finally, as academics, through our research, we bring rigor and evidence to inform policy and practice on sustainability issues.

“At the end of the day, we too have an important responsibility: to educate and inspire the future captains of industry to lead organisations with purpose, to lead thriving organisations able to achieve a positive impact on society at large. And that, I think, is a terrific purpose for any business school.”

About Ioannis Ioannou

Through his award-winning academic work, advisory roles, teaching, and interactions with executives, Dr. Ioannou focuses on understanding whether, how and the extent to which companies and capital markets can lead on the path towards a sustainable future. Based on his ongoing research and engagement with practice, his keynotes focus on the challenges and opportunities that a transition to Sustainability Leadership generates for both companies and investors.

Dr. Ioannou is the co-chair of the Sustainability Advisory Panel of Merck, KGaA, a member of the ESG Advisory Board of the DWS Group, one of the world’s leading asset managers with about $900 billion of assets under management, a member of the Advisory Board of the Sustainable Risk Assessment Framework (SRAF), the Board of the Alliance for Research on Corporate Sustainability (ARCS) and he serves as an Advisor to TreeApp. He is also a member of the World Economic Forum Experts Network with expertise in the area of Sustainable Development and a member of the experts’ network of KKS Advisors, a leading sustainability advisory firm.

CSR HELLAS

Founded in 2000, CSR HELLAS was established with the promotion and implementation of Corporate Social Responsibility (CSR) in the strategies and operations of businesses.