How the Private Sector Can Support a "Just Transition" for a Sustainable World

9/7/2022
— WE Communications 

The private sector understands the importance of moving to a carbon-neutral future, but how do we ensure that this transition doesn’t leave anyone behind? A “just transition” means that the move to a more sustainable economy is fair and inclusive to all stakeholders: customers, employees, shareholders, communities and the people in areas most impacted by climate change.

In two recent convenings hosted by WE Communications, a dynamic group of climate and sustainability experts discussed the challenges of building a greener and more equitable world.

Moderated by WE’s Executive Vice President of Corporate Reputation and Brand Purpose, Hannah Peters, and Executive Vice President of International, Rebecca Wilson, the two sessions drew from recent Brands in Motion research on sustainability and just transition, as well as insights and expertise of a panel of external experts and WE clients and leaders:

  • Michael McComb, Global Head of Sustainability Communications, SAP
  • Sinead Duffy, former Global Director Public Affairs, Sustainability, Bayer
  • Robert Ludke, Senior Advisor and Global Sustainability and Governance Expert, WE Communications
  • Simon Pangrazio, Managing Partner, WATATAWA
  • Shannon O'Shea, Senior Vice President, Sustainability, WE Communications

Below are some of the key insights the panelists shared:

Harness the Power of Technology

SAP’s Michael McComb kicked off the conversation by stressing the important role technology plays in creating a more sustainable world. He explained that, as the world’s leading enterprise resource planning company (ERP), SAP enables companies to have holistic, enterprise-wide systems that embed sustainable business data across all core processes and functions. This is not only more efficient than having multiple systems operate on separate platforms, but it’s also far more environmentally friendly.

“Our mission is to drive positive, sustainable change at scale — to build intelligent, sustainable enterprises. What we’re finding is that the more digitally mature a company is, the better they perform across a number of sustainability and ESG factors. We’ve analyzed S&P and other data sets, and used data from our own customer sets, and there’s a direct correlation,” he says.

Don't Immediately Write Off "Climate Culprits"

The question of whether to work with “climate culprits” — that is, high-emissions industries such as energy and agriculture — is hotly debated across the environmental, social and governance (ESG) space.

Simon Pangrazio noted that this issue ties directly into the “just transition” question, as many developing nations still rely heavily on the most high-emissions industries: fossil fuels and the energy industry and agriculture. “So, the transition is much bigger and much more challenging. You can’t just remove fossil fuel sources of energy faster than you can replace it with renewables because people literally won’t be able to turn the lights on. You can’t just change agricultural practices without ensuring that yields are maintained and farmers can make livelihoods,” he said.

WATATAWA works with companies in the agriculture industry, provided company leadership is earnestly working toward making their operations more climate-friendly. “If they’re willing to go down that path and drive it, my opinion is that we can actually make the biggest difference with what we do with those clients because they’ve got the furthest to go,” he said.

Collaborate Across Sectors

Motivating and helping individual companies change is an important piece of the puzzle, but making a substantive transition to a more just and sustainable economy will require collaboration across sectors.

Robert Ludke outlined the key players and their roles: Policymakers need to create frameworks that give businesses and investors the confidence to make long-term plans. The nongovernmental organization (NGO) community needs to provide its expertise to help devise solutions and hold all parties accountable. The finance sector needs to invest in innovation that has a long-term payoff, and the private sector must be more aggressive in changing its business model.

“We are past the time of incrementalism being okay. We need radical transformation across the economy, but we also can’t expect business to do it alone,” he said.

Gain Credibility at the Ground Level

The communications sector can play a key role in bringing all the various stakeholders together and ensuring that the people most impacted by the transition have a seat at the table.

Sinead Duffy, who shared insights from her long career, including her role at Bayer, said it’s important for senior leadership to understand people’s needs in the communities where they do business, especially those feeling the strongest impacts of climate change.

“For example, when leaders are out on public platforms to be able to say, ‘Last week, I was on a farm in Uganda, and I spoke to a woman who was working on her farm, and this is what she said she needed,’ it’s the connection between the reality on the ground and being authentic as the leader, and I think that’s powerful,” she said.

Bringing a wide range of stakeholders to the table and getting their ideas and input into crafting solutions will help ensure they are fully invested in the outcomes.

Before she joined WE, Shannon O’Shea worked on the United Nations Sustainable Development Goals (SDGs) in her role at UNICEF. She believes that the SDGs got significantly more traction than previous agendas because the process included the voices and views of millions of people from all walks of life — including people from marginalized groups and those who had never been engaged or consulted by the U.N. previously. “People felt like they had a seat at the table in creating the SDGs, and therefore they had much more of a personal and vested interest in seeing that they succeed,” she said.

O’Shea added that bringing stakeholders into the conversation isn’t just the right thing to do; it’s also good business. “These groups are going to have some very unique and valuable knowledge to assist your company in their environmental sustainability journeys,” she said.

Bridge the Disconnect Between the C-Suite and Middle Management

When it comes to advocating for sustainability initiatives that support a just transition, WE’s 2022 Brands in Motion research reveals a substantial divide between the C-suite and middle management. Although 61% of C-suite leaders say their company is implementing or planning to implement a just transition strategy, only 40% of senior and middle managers are aware of such plans. Senior and middle managers are also less optimistic than their bosses, with only 38% saying they think the private sector will reach net-zero emissions by 2050, compared with 64% of executive leadership.

Bridging that divide is essential. “The CEO can make any kind of commitment he or she wants, but if middle management isn’t bought in, it’s going to go nowhere,” said Ludke.

O’Shea explained that many employees worry that sustainability and just transition programs will put them out of a job, which is why it’s critical to have open dialogues about such initiatives and get a full understanding of team members’ needs and concerns.

“You’re not going to be able to take everything that every stakeholder wants to have on board. But people want to be heard, and they want to be listened to, and they want to feel like they have a voice in decision-making,” she said.

Harness the Power of Communications to Drive Change

There is a lot of work to be done, especially as many companies are only beginning their just transition journeys. That’s why it’s important to recognize the power of communications to show what real action looks like.

Pangrazio pointed out that communicators have the ability to clearly explain to companies what the new expectations are — what stakeholders want, what their competitors are doing — and show why only substantial actions with measurable impacts are acceptable in this environment.

“We can play a real role in aligning stakeholders behind a company’s plans and progress. We can be a calm but strident voice at the table for just transition and the imperative to change,” he said. “We can actually influence them to do better.”