Shaping the Future: Peter McAteer’s Vision of Sustainable Business and Innovation

You will be joining this year’s Sustainable Economy Summit in Warsaw. Could you tell our readers a bit about yourself and what you do?

The short answer is that I am a consultant, teacher, and author. I consider sustainability and climate change to be the most pressing challenges of our time, so I have dedicated this chapter of my professional life to helping businesses find opportunity in those challenges. As a father and proud member of a global community of family and friends, I also see this as a legacy issue to leave the planet better off for future generations.

The longer answer is I serve as Managing Director for SustainLearning LLC, a firm dedicated to developing more sustainable organizations. I focus my time on consulting and teaching based on the custom research that has resulted in my two books, Sustainability is the New Advantage, Leadership, Change and the Future of Business and Pathways to Action, How Keystone Organizations Can Lead the Fight for Climate Change, both from Anthem Press in the UK. In both books, I try to lay out models that can help organizations cope with new regulations, devise new products and services, create a culture of sustainable innovation and scale new business opportunities.

I’ve previously served as CEO of Corporate University Research, Managing Director for Harvard Business Publishing and Director of Learning & Knowledge Management Services for the United Nations Development Program. I think that my 40+ years of experience working with organizations around the world gives me both a broad perspective on global challenges, and a sense of the diversity of business innovation helping to reshape sustainable organizations.

Could you please explain in more details why sustainability is so important for business?

In many ways, the issues of sustainability and climate change have created the largest opportunity for market and business transformation in my lifetime. There are literally hundreds of billions of dollars in new investment helping companies transition away from carbon intensive fuels. There are also new public policies that are changing the boundary conditions for how businesses operate. Although some leaders see this as excessive regulation and bureaucracy, I see these changes as opportunities. Beyond the need for reduced emissions, the global population has increased from 3 billion to 8 billion people in my lifetime and will increase to more than 9 billion people by 2050. Creating a more sustainable future with less hunger, better equity, more respect for our shared environment and more livable communities will require innovations across all industries. My focus is to help companies innovate and transform their businesses to achieve market leadership and competitive advantage.

In your view, what is the key factor that can drive a business to change, or adapt to sustainability?

I think all businesses change because of opportunity or a sense of self-preservation. The former is the hallmark of market leaders, the latter a recipe for stagnation. The great management theorist Peter Drucker once observed that “Every single social and global issue of our day, is an opportunity in disguise.” What past market transitions have taught us is that if your business does not adapt and evolve, then you will be left behind.

One of the key issues I address with organizations is, how will sustainability change the boundary conditions of your organization? Do new changes such as the European Green Deal or the new European Climate Laws change the capabilities you need? Pretty much every leader in business today went to school when sustainability was not part of the curriculum. If you have spent 20 years in finance, as an example, is that knowledge still relevant in a sustainable business. Has the era of integrated reporting, triple bottom lines and multi-capital accounting transformed the knowledge and skills you need to operate? How do you integrate the best ideas of the past 50 years (knowledge of enduring value) with new breakthrough ideas? How do you change your business processes, incentives, and other levers of control to optimize your business operations for a sustainable future? Do your current mental models and business practices prevent the type of innovation you need to succeed?

As the questions above might suggest, I am a big believer in education and action learning as part of any business transformation. You can’t solve new problems with yesterday’s thinking, so creating a culture of continuous learning is essential. Each person in the organization must be able to align with the new business vision, but also answer the question, how do I do my job differently as we become a more sustainable business?

In your book “Sustainability is the New Advantage”, you state that planet, profit, and people can coexist and mutually benefit from each other. Could you elaborate on this matter?

History has taught us that you cannot solve social and global problems with just charity or social safety nets. In fact, the biggest reduction in global poverty in history has been produced by high economic growth rates in both China and India. No amount of spending by the United Nations or global foundations could have achieved what economic development and new job creation produced in the last 30 years. The question for us today is, can we achieve such growth in a zero-carbon environment without any negative effects on biodiversity and our shared environment. It is a huge challenge!

Climate change is a unique business driver, because warming our planet will unleash unprecedented extreme weather events and create risks in all industries and countries. That will generate disruptions in markets but also lead to cascading effects on issues such as poverty, hunger, the migration of displaced peoples, and greater geopolitical tensions. Increased levels of uncertainty are always a drag on new capital allocation and business growth. Creating businesses that do well by doing good needs to be a mutually beneficial process – so public policy and business leadership must be aligned on this idea. It is also a rare opportunity when a business driver affects all major markets and industries simultaneously. That’s why the market for business innovation is bigger than at any time in history.

What advice would you give leaders who have a drive towards positive impact on the planet?

There are problems worth fixing in every industry from energy to transport from agriculture to construction. Each will require billions of dollars in new investment. Every organization needs to create a future vision based on their assessment of market opportunities. This requires a careful analysis of the market for social and economic impact, as well as the difficulty, risks and resources required to succeed. If you focus all your leadership time on responding to new ESG regulations, for example, you gain no advantage over your market competitors. Meeting the minimum market reporting standards suggests that you are no different than anyone else. You are simply a legacy business with better reporting.

The key is to experiment to learn and use the results to build new social and political capital. Such capital can then be used to engage key stakeholders in supporting the broader organizational change that is key to a successful transition. How fast you need to move is based on your market as well as competitive behavior. Having good business intelligence and building core leadership capability is important to accelerating your sustainability plans.

Do you agree with the estimation that all the Sustainable Development Goals will be met before 2030?

I think it is unlikely that we will limit climate warming to 1.5 degrees centigrade by 2030. The goals regarding biodiversity are also under serious threat. Despite those statements, progress has been made on many fronts, but we have collectively started too late and some of our scientific projections have proven too conservative. Some restatement of our sustainable goals is inevitable.

It’s important to remember that the 17 Sustainable Development Goals established in 2015 are really the first time that such a broad definition of sustainability has been accepted by most nations on earth. When I worked at the United Nations, we had just launched the 8 Millennium Development Goals (MDGs) in 2000 and the term sustainability was only used in one of the goal categories. So, it’s a remarkable achievement that we have created such a comprehensive framework with 198 parties in agreement. However, the 17 SDGs don’t address issues such as business governance and human rights, for that you need to look at the 4 intergovernmental treaties referenced in the United Nations Global Compact, which has also evolved much since its launch in 2000.

With the SDG goals set to expire in 2030, it’s reasonable to ask, “how much progress have we made” and “what comes next?” I suspect we will share credit for substantial progress and then refine and evolve the goals. The advent of artificial intelligence models for climate and risk modeling, for example, will improve, as will our satellite tracking of emissions and biodiversity. Since the problems and risks do not go away, there is still a need for comprehensive effort, much improved accountability, and better reporting. There will also need to be better efforts at harmonizing global standards that make it difficult for businesses to operate in multiple markets. However, all these changes will represent opportunities for business to solve problems and for early adopters to gain advantages in business intelligence, talent capabilities and market share.

What are your hopes and aspirations related to sustainability and the future of sustainable growth in business?

I remain very positive about the future, but I think we are entering a decade or two that will prove challenging. It is unfortunately true that many people will not embrace change until faced with a real sense of urgency. The emergence of a war in Ukraine generated more urgency regarding transforming the European energy sector that anything we’ve seen in decades. A similar sense of urgency can now be seen in countries bordering the Nile Delta in Africa over reduced water flows, in Canada over extreme wildfires, in the Southeastern US over recurring hurricanes. The Covid pandemic created a significant rethinking of global supply chains and variable water cycles around the world are requiring countries to reimagine food production and food security. In each instance, there is generally a keystone industry or business that serves as a market leader. They embrace the opportunity and bring forth solutions.

After a keystone business becomes noticed, competitive pressures bring their own sense of urgency – either embrace the new way of doing business or be left behind. So, despite the potential for some short-term pain, I think that the broad list of social and global issues contained in the Sustainable Development Goals offer the promise of a golden era of opportunity and innovation.

PETER McATEER

Managing Director for SustainLearning LLC. His focus is on business transformation, innovation, and talent development. Former director of Harvard Business School Publishing and United Nations Development Program. He has published in Directors and Boards, the ASTD Journal, the Harvard Business Review, the European Business Forum and Reuters Business Insights. His recent books include Sustainability is the New Advantage, Leadership, Change and the Future of Business and Pathways to Action: How Keystone Organizations and Leaders Are the Key to Solving Climate Change.

Last Updated on March 26, 2024 by Anastazja Lach