The 17 UN Sustainable Development Goals (SDGs) were adopted in 2015 by 193 world leaders to construct a roadmap to enable our and future generations to live in an inclusive society that maintains a healthy environment and has a prosperous economy within the limits of our planet. The realization of the SDGs will require education, changes in attitudes and behaviour as well as clear leadership. An integral role is also played by technology, new products and services, new sustainable business models and a clear focus on partnership and collaboration.
The SDGs are expected to open up market opportunities with an estimated 12 trillion US dollars, while efforts to reduce carbon emissions will boost the global economy and generate up to 28 million jobs by 2050.
EPCA invited Professor Wayne Visser, one of the keynote speakers of the 52nd EPCA Annual Meeting in Vienna and expert in “Sustainable Transformation and Integrated Value” to elaborate further on how to engage effectively with the SDGs and how to unlock their full market potential.
EPCA: Most companies tackle a selected few of the SDGs that are close to their core business. You mentioned during the Talent & Diversity Session on 9th October 2018 at the EPCA 52nd Annual Meeting that companies should not cherry-pick and consider the 17 SDGs as a “system of sustainability”. Why is it important for the petrochemical industry to take this systemic view into account in their corporate goals and values?
Prof. Wayne Visser: It is true that we see lots of SDG “cherry-picking” and “rainbow-washing”. This was confirmed by the recent SDG Barometer for Belgium, which was launched in October 2018 to measure the engagement of organizations with the Sustainable Development Goals. It is not surprising, since companies focus on “material issues” linked to their core business. The problem is that some critically important SDGs are left behind – like those covering marine life (SDG 14), biodiversity (SDG 15) and peace and justice (SDG 16). Should these be left for governments to tackle? That is a dangerous approach, since the SDGs are “wicked problems” that require cross-sector solutions.
For the petrochemical sector, it is important to look at the SDGs holistically because the sector and its value chain impacts all 17 goals – representing both risks and opportunities. The risks are that breakdown in social and ecosystems and growing public discontent about chemical impacts will have negative knock-on effects for the industry. The opportunities are that an “integrated value” approach to the SDGs can unlock tremendous benefits for business, the economy and society – what I call a “values dividend”. Two examples are the “Port of Antwerp”, which has taken a strategic decision to look at their impacts on all 17 SDGs and “BASF”, which has “Verbund” sites in Europe, in Germany and in Belgium, in North America and in Asia that “close the loop” on energy and material flows by ensuring that the “by-product” from one process becomes the “feedstock” for another process.
To refocus on the petrochemical industry as a whole, it needs to respond credibly to shifting stakeholder perceptions and expectations, such as on the issue of plastic waste that has risen rapidly up the public and political agenda. The standard approach of arguing that plastics are “a good material that just needs better management” is no longer a sufficient response. More transformative and innovative approaches are needed, like carbon neutral or carbon positive products, bio-based (non-fossil fuel) feedstocks, and providing chemicals for rapidly scaling clean technologies like batteries and renewable energy.
The mostly B2B nature of the petrochemical industry has allowed it to slowly react to the evolution of the public expectations, but the pace is changing now. For example, big retailers like Unilever, Marks & Spencer and The Bodyshop are currently considering their strategic outlook for the next 10 years. It is highly likely that they will shift towards using bio-based, recycled, recyclable and compostable packaging and they will look to companies that can provide these at competitive prices. The evolution of public expectations is also reflected in the European Commission’s circular economy package, and its strategy for plastics, where for example all plastics packaging placed on the EU market will have to be reusable or easily recycled by 2030. The industry itself also moves in this direction as seen with the “Voluntary Commitment - Plastics 2030”, the examples that I have mentioned earlier and many other frontrunner projects. This is a context where pro-active, solution orientated corporations, that are guided by a systemic mindset, will thrive.
EPCA: For companies that are considering their next steps, do you have some tips on how to deal with the complexity of SDGs and to create a culture of innovation? And secondly, from your experience at the Antwerp Management School, does this systemic approach require specific education and skills development?
Prof. Wayne Visser: A good way to begin is to start with the SDGs “material” to their business, but then to tease out all the interconnections with the other SDGs. It is essential to see them as business opportunities and not only as checkboxes to tick on a CSR checklist, which requires a strategic approach and much higher ambition towards science-based targets. From the ambitious goals will come the culture of innovation. This links to one of the takeaways from the “SDG Barometer 2018”, which found that a partnership approach to the SDGs is a catalyst for more strategic action, with the person leading the SDG coordination more likely to be reporting directly to the Board of Directors.
Concerning education and skills, the companies that recruit from Antwerp Management School and Universiteit Antwerpen have made it very clear that they want young talent that already has a “sustainable mindset” and who will challenge them and bring new solutions. This includes certain competencies. For instance, research I have conducted for Cambridge University found a number of crucial characteristics for sustainability leaders, including: systemic understanding, emotional intelligence, values orientation, compelling vision, inclusive style, innovative approach and long-term perspective.
Besides bringing new knowledge and skills, young leaders also bring higher expectations. Research by Cranfield University that I cited in my presentation at EPCA’s 52nd Annual Meeting found that 9 out of 10 current leaders in Europe believe they are already delivering adequate social value, while only 2 out of 10 future leaders agree. This expectation gap is showcasing one of the biggest shortcomings that industries have at the moment: the lack of ambition. Incremental change is happening on many fronts and this is already a good thing, but bolder transformational change is needed to reverse the crises we face on issues like climate change, biodiversity loss and growing inequality.
Happily, transformational change brings innovation – and the most impactful innovations create synergies between the ecological, economic and social aspects of SDGs. How do you realize this ambitious transformational change in your company? Set bold, measurable, science-based targets (like zero waste or 100% renewable energy) and commit to them over a realistic time-frame. Achieving these goals may take 20 or 30 years, which is fine if they are truly transformation. Take for example the case of the petrochemical-intensive carpet manufacturer, Interface, committing in 1995 to “Mission Zero” i.e. zero negative environmental impacts by 2020. The key is that it was a seemingly impossible goal, but they gave themselves the time to innovate (25 years) and today they are on-track to meet their ambition.