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Why do some companies excel in sustainability while others falter?

Image courtesy of interviewee. November 22, 2024

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This video discusses the concept of ownership, particularly in the context of sustainability, exploring its historical significance and its role in fulfilling three fundamental human drives: self-efficacy, identity, and belongingness. The speaker argues that ownership empowers individuals to engage in sustainable practices, which can foster a sense of responsibility towards the environment.

This video highlights the importance of collective ownership, exemplified by industry collaborations aimed at advancing sustainability—such as efforts to combat deforestation in palm oil production.

It points out the alarming trend of resource overconsumption, exemplified by the concept of Earth Overshoot Day, which indicates humanity's demand for resources exceeding the planet's capacity. The discussion extends into corporate responsibility, emphasizing that sustainability should not be confined to one department but should be integrated throughout the organization, promoting a culture where every employee can contribute to sustainable practices.

Barriers to achieving sustainability within companies are discussed, including traditional profit-maximization mindsets and the challenge of focusing on specific sustainability goals. This video emphasizes the necessity of employee engagement, the appeal to both the rational (head) and emotional (heart) aspects in motivating sustainability efforts, and the need for training and empowerment to enhance employees' ability to act sustainably.

Finally, it argues for a shift in both corporate strategy and consumer behavior towards sustainability, encouraging practices like renting and sharing resources instead of ownership, ultimately advocating for a significant reduction in consumption in developed countries as crucial for addressing environmental issues.

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Here are five key points from the video:

1. **Ownership and Psychological Drives**: The concept of ownership is intertwined with fundamental human drives, such as self-efficacy, identity, and belongingness. Engaging in sustainability initiatives fulfills these drives by allowing individuals to feel competent, identify with meaningful values, and connect with a broader community focused on environmental stewardship.

2. **Collective Responsibility for Sustainability**: Achieving sustainability requires a collective sense of ownership among individuals and organizations. An example cited is the Roundtable for Sustainable Palm Oil, which emphasizes the importance of collaboration among companies to address challenges like deforestation, highlighting that sustainability is a shared responsibility.

3. **Barriers to Sustainable Business Practices**: Two major barriers to sustainability in businesses are the traditional mindset that prioritizes profit maximization and the tendency for companies to lack a focused sustainability strategy. Successful companies define specific sustainability goals instead of trying to address every possible issue, and they shift from viewing profits as the primary motive to creating value for all stakeholders.

4. **Empowering Employees for Sustainability**: Engaging employees in sustainability efforts requires both inspiring them with meaningful appeals (both emotional and rational) and providing the necessary training and resources. Companies should empower employees at all levels to contribute to sustainability efforts, making it a core part of the organizational culture.

5. **Rethinking Consumption**: The video suggests a shift away from ownership towards models based on sharing and renting, such as Patagonia's initiative to repair and rent jackets instead of encouraging new purchases. It addresses the need to rethink consumption patterns and explore sustainable alternatives that reduce waste and promote resource efficiency.

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Here are some key quotes extracted from the video you , highlighting the main concepts and ideas:

1. **Ownership and Identity**:
- "Ownership is part of the human condition, and ownership helps fulfill three fundamental human drives."
- "The second drive is the drive for identity... I work for a company that is sustainable. So that's a big source of pride."

2. **Sustainability and Self-Efficacy**:
- "Sustainability clearly offers... plenty of opportunities to display a sense of ownership."
- "The first is the drive for self-efficacy... we can all do fairly simple things like turn off light bulbs."

3. **Collective Responsibility**:
- "From that individual sense of ownership comes a bigger collective sense of ownership... it's not just my planet or your planet, but it's our planet."

4. **Earth Overshoot Day**:
- "Currently, we are using 1.7 planets worth of resources."
- "In 2024, that fell on August one... the optimal date for it is December 31."

5. **Business Purpose Beyond Profit**:
- "The purpose of business is truly to create value for all stakeholders, not just shareholders."
- "Before value creation is... rather ludicrous."

6. **Mindset Shift Needed**:
- "We have to work on changing that mindset."
- "Only by creating that value are we going to make profits."

7. **Defining Material Goals**:
- "You really need to define some material goals... if you say sustainability at large... you're gonna fail."

8. **Employee Empowerment**:
- "Everybody has a role in making their companies more sustainable."
- "We are not taking responsibility; we are spreading response."

9. **Engaging Employees**:
- "You have to entice employees to join the sustainability journey."
- "There are mainly two appeals that work... an appeal to the head and... to the heart."

10. **Creating a Sustainable Culture**:
- "Creating that culture, providing measurements is part of... creating that palpable organization."
- "This is an important thing that we do. It's not an afterthought; it is who we are."

11. **Consumer Responsibility**:
- "We, consumers, have to take the matter in our hands and not only vote with our wallets for... sustainable companies."
- "Changing the business model... from owning to actually just renting or using products and services."

12. **Sustainability as Survival**:
- "Sustainability is about survival... citizenship, people like you and I."

These quotes encapsulate the author’s views on the significance of ownership and sustainability in human society and business practices, highlighting the importance of individual and collective responsibility towards a sustainable future.

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Ownership is a concept that has,

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has a long kind of history.

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I mean, for example,

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the philosopher Jean Paul Satre even said something,

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to the effect of, we are what we own.

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I mean, you know, so ownership is part

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of the human condition, and ownership helps fulfill

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three fundamental human drives.

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The first is the drive for self-efficacy.

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Each of us as human beings wants

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to be competent in whatever we try to do, whether

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that's being able to screw on a light bulb or,

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or whether that's being able to drive a car

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or make a meal, what have you.

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And sustainability clearly offers,

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you know, any of us, plenty of opportunities to,

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to display a sense of ownership,

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because we can all do fairly simple things like turn off

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light bulbs or, you know, print double-sided,

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or not print at all, or, or what have you.

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Sustainability offers the opportunity for us

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to feel, feel efficacious.

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So that's drive number one.

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The second drive is the drive for identity.

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So we are all social kind of human beings,

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and we don't define ourselves just in terms of, you know,

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I'm a man, I'm, you know,

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so many years old, et cetera.

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But also socially I want, I work for a company

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that is sustainable.

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So that's like a big kind of, you know, a source of pride,

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a big source of identification for human beings.

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And given the sustainability is so critical

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and so important in the news today, employees, find,

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you know, being able to hang their hat on sustainability

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as part of the company that they're working for to be,

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you know, a big source of job, meaning, you know, which is,

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which is lacking in today's world, quite a bit.

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And the third drive that ownership fulfills is the drive

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for belongingness.

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So we are all, again, as well, kind of community members,

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and we have families and, and, and all of that.

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So there, how ownership helps is

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that if you're working on climate change, for example,

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you can tell yourself at, what, when you go

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to bed at night that I'm doing something for my children.

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I'm doing something that's actually gonna help my

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children in, in the future.

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Um, and so the sense of belongingness is also fulfilled

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by engaging in sustainability.

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So these three, these three fundamental human drives,

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that ownership, that the cons fundamental concept

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of psychological ownership fulfills are also fulfilled

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by the concept of sustainability ownership, which is

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what I proffer in the, in, in the book, you know,

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and from that individual sense

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of ownership comes a bigger collective sense of ownership.

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And that's where you see bigger industry collaborations

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and such kind of, you know, for example, the Roundtable

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for Sustainable Palm Oil that came about when, you know,

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lots of big companies like Nestle and Unilever

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and Coca-Cola, you've gotta stop deforestation

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that's happening in, in, in the context of palm oil. And

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So they formed a consortium.

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So that's when it becomes like, okay, it's not just,

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you know, my planet or your planet,

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but it's kind of our planet.

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That's, that's the big thing.

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Currently, we are using 1.7 planets worth of resources

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per every year.

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So we have a concept called Earth Overshoot Day,

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which is the day in the year

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by which the earth has exhausted its natural, capacity

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for air, for water, for, for waste in landfills, and,

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and, and all of that.

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And that in 2024, that fell on August one,

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whereas the optimal date for it is December 31.

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And, you know, as, as, as early back, I would, I would say

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as 1970, the, the,

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the earth overshoot day was in fact about December 31.

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So in this period, we have managed to, to,

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to fast forward it to, to August one,

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which if you do the math,

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it's basically 1.7 planets worth of resources.

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And if we continue on this business as,

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usual trajectory, we have, we are projected

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to use three planets worth by, by 2050.

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You know, now, you might be a big fan of Elon Musk,

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who's is probably in the limelight right now,

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and who said, well, we are gonna export half the population

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to Mars and other exotic planets.

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And, but I am much more of a, you know,

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realist when it comes to that.

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I said, well, we only have this one planet,

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and we can, we need

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to do whatever we can to, to preserve it.

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If you look at a corporation, there are opportunities

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to be sustainable in every aspect of

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what the company does from procurement office, raw materials

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to the disposal of its finished products.

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And every department can conceivably play a role like

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finance, like, accounting, you know, operations,

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marketing, you name it.

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And therefore, why, you know,

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should we relegate sustainability to one department

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when kind of mainstreaming it

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and embedding it in corporate DNA,

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making it everybody's job would essentially kind of,

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you know, multiply the acceleration, many, many,

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many fold, and your company can achieve, you know, progress.

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I mean, we are not talking about success here.

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We are just talking about progress.

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But a company can progress, you know, far, far, quicker

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on its sustainability journey if, if it engages, its,

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its workforce kind of, you know, wholesale.

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And there are many, many benefits

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to that, which we'll talk later.

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But, you know, the, you know,

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there's a palpable energy in the company, kind of, okay,

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we are, we, we are, we, we are on the right path,

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we are doing the right thing.

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And, you know, increased productivity,

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increased loyalty, all the, all these kinds of things

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that I'm sure we are gonna discuss on the path.

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The first barrier is, is really the mindset

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of, of, of leadership.

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And the mindset of the leadership still predominantly says

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that the purpose of a business is to maximize profits.

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Actually, that's a resoundingly false, statement.

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The purpose of business is truly to create value

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for all stakeholders, you know, so not just shareholders,

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but as well your employees, your consumers, your, your,

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your suppliers, your community members, and so on.

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And only by creating that value are we gonna make profits.

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So the idea of putting profits

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before value creation is rather ludicrous.

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But given the rhetoric kind of in society,

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Milton Friedman famously said 50 years ago that the purpose

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of business is, is to maximize profits, you know,

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and people have taken it to heart.

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I mean, you know, because it's, well,

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money, money is real.

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Whereas, you know, the planet and,

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and its future, who knows, you know,

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a CEO is gone in four years et, you know, tenure

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of the CEO's four years.

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So we have to work on changing that mindset.

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And education, I think is the only answer of the,

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the younger generations,

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or the only answer, I did a study

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that was published last year in the Sloan management review

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of, of, a study of employees in the United States,

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and it turns out that 34%, only 34%

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of the companies or

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or employees believe that their companies

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have a higher purpose, you know, relative

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to profit maximization, that they're able

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to articulate their value.

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I mean, so I this after a lot of talk, you know,

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and the business roundtable in the United States having come

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out and said that, well, you know, the business has

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to look at, more beyond profits and so on and so forth.

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Uh, I would say that that's a disappointing outcome.

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That's a disappointing result, you know, in today's day

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and age, and we, we, we need to battle that one.

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So, so that's kind of job one.

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You know, that's the, i I would say that that's the,

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the, the biggest barrier.

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And then the second biggest barrier, I would say is

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companies wanting to be everything to everybody, you know,

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in, in terms of sustainability.

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So, you know, so, so there's really no, no focus, no,

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no sharply defined focus.

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And what we know from research

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and from the companies that have been successful is

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that kind of, you really need to define some material goals.

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So this concept of ownership that I was telling you,

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ownership does not happen in a vacuum.

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Ownership, you know, can only happen if you talk about

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some specific things

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that your company, you know, is going to do.

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So, okay, we are going to tackle carbon

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and we are going to tackle waste.

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You know, that, that makes sense.

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And an employee can get it into his

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or her head that these are, you know,

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important goals for my company.

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If you say sustainability at large, you know,

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it can include anything from, you know, diversity,

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inclusion, you know, gender equity.

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I mean, it's a very, very large portfolio of things.

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And if you try to pursue all of them with equal vigor,

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you know, you, you, you, you, you're gonna fail.

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And, and, a, a case in point is, is is Unilever.

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I mean, they, I worked with this, company very closely

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and with Paul Pullman very closely.

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And at the time,

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the Unilever Sustainable Living Plan had, you know,

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like seven, big goals and,

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and 50 KPIs and so on and so forth.

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Um, and whilst they made progress

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and on all of them, the progress that they made was

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not enough in the eyes of the new management.

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And so they've cut it down to kind of now four, you know,

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fundamental areas that they want to work in.

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So I think that's a good move.

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And, and if a firm can articulate their purpose

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and define what is material for them for that, you know,

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a bank does not have to go

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after the same three things that a,

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that a cement manufacturer has to go for, right?

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So if you can clarify and focus on, you know,

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the three things that you

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and your employees want to collectively achieve,

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I think we would be making, much more progress.

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Today, everybody has a role from the

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mail room to the boardroom.

218
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Everybody has a role in,

219
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making their companies more sustainable.

220
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So the person working the mail room

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can actually sort the mail in a, in a good way and,

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and recycle whatever can be recycled.

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And, on and on.

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The person in the boardroom, you know, is,

225
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is in charge of resources.

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So that person in the boardroom will need

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to make sustainability a priority for the company and,

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and invest in training the employee base in, you know, kind

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of what needs to be, what they need to do to, to kind

230
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of play their part and so on.

231
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So everybody has a role.

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So it's talk about the corporate sphere,

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because that's a tangible place to start,

234
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but ultimately we need to be sustainable in our,

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in our homes as well, kind

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of in our private spheres as well.

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So, so no, we are notating responsibility.

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Um, we are, we are, we are spreading response.

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We are making it everybody's job.

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So, so how, you know, how do we do that was your,

241
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the first part of your question, kind of, you know,

242
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and I think that after purpose

243
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and material, I mean, which are the key two first steps

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for a company, then we have to, essentially,

245
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the next two steps would be kind of enticing employees

246
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to join the sustainability journey.

247
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I mean, you know, so, so you're a 30-year-old salesperson.

248
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I mean, you're going to say, what you want

249
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to put more on my plate now?

250
00:11:26.275 --> 00:11:29.635
You know, so this is also my job. Uh, what gives, right?

251
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I mean, you know, so and so,

252
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but you have to kind of speak to that person and,

253
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and say, yes, it is.

254
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I mean, you know, and it's not just for you,

255
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but it's for all of us or whatever.

256
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And my research shows

257
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that there are mainly two appeals that work.

258
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There two kinds of appeals to employees.

259
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I mean, one is an appeal to the, to the head.

260
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I mean, like, look, I mean, saving on raw materials

261
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will kind of not only make the planet more sustainable,

262
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but it'll also save us money.

263
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Now, there is a whole group of, of line managers, I mean,

264
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who have bottom line responsibilities,

265
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whose ears actually perk up at the thought

266
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of saving money much more than at

267
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the thought of saving the planet.

268
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But you've gotta feed the beast what it wants to eat,

269
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and of, you know, so, so that's the, that works there.

270
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Whereas there are appeals to the heart, it's like,

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to the middle management that's more effective.

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It's like, Hey, you know, what are your children going

273
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to do if we do not kind of, you know, solve this problem

274
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for them kind of at this, at this point in time,

275
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and more.

276
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And so, so, so company like Marks

277
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and Spencer, you know, kind of actually, they, they,

278
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they, they take groups of employees to, to the pub,

279
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which is a great British culture as we know, to, to go

280
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for a, a, a pint after a hard base of work.

281
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And, and that's where they can foster these kinds

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of conversations about kind of the state of the planet and,

283
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and what, what are we doing about it kind of thing.

284
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Um, so it's different strokes for different folks,

285
00:12:55.025 --> 00:12:57.645
and oftentimes it's a hybrid appeal, like both the head

286
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and the heart and all of that.

287
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But that's, that's one part only.

288
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And, and you need sustainability

289
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ambassadors for that, for doing that.

290
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So, so, because the top management cannot deal with, clearly

291
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with all of that stuff in any organization, you will find

292
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that it's kind of like a bell curve.

293
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I mean, the employees dis, you know, kind of,

294
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attitude towards sustainability.

295
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So on the right hand side of that bell curve, you will find

296
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that it'll be a good 20% of employees

297
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who are just willing to run with it.

298
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They want their company to be more sustainable.

299
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They're the younger ones, you know, kind of, and they, and,

300
00:13:30.545 --> 00:13:32.685
and they know what's going on and all, all of that stuff.

301
00:13:33.145 --> 00:13:37.565
So you need to tap into that group before anyone else, and,

302
00:13:37.625 --> 00:13:39.885
and make them ambassadors, make them evangelists,

303
00:13:40.225 --> 00:13:43.485
and have them kind of then reach out to kind of the,

304
00:13:43.665 --> 00:13:47.765
the middle, you know, 50 to 60% who

305
00:13:48.705 --> 00:13:51.245
really have no, they, they, they're, they're on the fence.

306
00:13:51.245 --> 00:13:53.365
They're neutral. They, they're willing to be convinced,

307
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you know, and forget about the 20% diehards, you know,

308
00:13:56.905 --> 00:13:58.525
who you know are deniers.

309
00:13:58.525 --> 00:14:00.925
Maybe they, they, they're, you know, climate deniers are,

310
00:14:00.945 --> 00:14:03.445
are, they don't care about food waste

311
00:14:03.505 --> 00:14:04.685
or, or, or what have you.

312
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And so, so there's no need to go after them.

313
00:14:06.545 --> 00:14:10.005
But if you get 80% of the organization moving in a,

314
00:14:10.005 --> 00:14:11.685
in a particular direction, I think that's great.

315
00:14:12.585 --> 00:14:14.725
But willingness is only part of the problem.

316
00:14:14.965 --> 00:14:16.885
I mean, solving the willingness issue is

317
00:14:16.885 --> 00:14:17.925
only solving part of the problem.

318
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You have to solve the ability problem as well,

319
00:14:20.645 --> 00:14:23.445
because everything in sustainability is not like putting off

320
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lights and,

321
00:14:24.585 --> 00:14:27.165
and, printing two-sided, which I mentioned earlier.

322
00:14:27.645 --> 00:14:30.365
I mean, there are very, complex kind

323
00:14:30.365 --> 00:14:33.485
of scientific things like, you know, eco-efficiency analysis

324
00:14:33.485 --> 00:14:35.005
for which you need training, essentially.

325
00:14:35.385 --> 00:14:37.765
So a company needs to empower its employees

326
00:14:37.825 --> 00:14:40.045
by providing investing in training, you know,

327
00:14:40.065 --> 00:14:42.005
so giving them the skills that they need to,

328
00:14:42.345 --> 00:14:46.085
to be more sustainable, alter the kind

329
00:14:46.085 --> 00:14:48.445
of cost benefit ratio in, in their favor.

330
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What do I mean by that? I mean that you have

331
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to lower the costs of being sustainable

332
00:14:52.745 --> 00:14:54.845
and increase the benefits of being sustainable.

333
00:14:55.345 --> 00:14:56.485
How do you lower the costs?

334
00:14:56.795 --> 00:15:00.405
Well, if something is there at the push of a button,

335
00:15:01.185 --> 00:15:03.805
you know, or if it's the default option, if I,

336
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I'll give you a very simple example.

337
00:15:05.385 --> 00:15:09.645
If the default option in your organization is two-sided

338
00:15:09.845 --> 00:15:11.125
printing, you know,

339
00:15:11.515 --> 00:15:13.965
then you will print two-sided without making

340
00:15:13.985 --> 00:15:15.005
an effort, right?

341
00:15:15.425 --> 00:15:18.485
But if the default option is one-sided printing,

342
00:15:18.505 --> 00:15:22.165
and I've seen this in many, many companies still, I mean,

343
00:15:22.165 --> 00:15:23.405
it just freaks me out.

344
00:15:24.505 --> 00:15:26.885
People will, they will not make that extra effort

345
00:15:26.885 --> 00:15:29.245
to go into the settings and change it to two sided.

346
00:15:29.625 --> 00:15:30.725
So if things will,

347
00:15:30.825 --> 00:15:32.845
if the default option is more sustainable,

348
00:15:33.515 --> 00:15:36.205
then costs are low of acting sustainably, right?

349
00:15:37.115 --> 00:15:38.845
What do I mean by increasing benefits?

350
00:15:39.205 --> 00:15:41.765
I mean, kind of tying incentives to,

351
00:15:41.785 --> 00:15:43.205
to sustainability performance,

352
00:15:43.365 --> 00:15:44.885
tying your variable compensation to,

353
00:15:44.945 --> 00:15:46.405
to sustainability performance.

354
00:15:46.405 --> 00:15:49.845
That goes a long way as do psychic rewards,

355
00:15:49.845 --> 00:15:52.085
like promotions coming, you know, kind of on the heels

356
00:15:52.105 --> 00:15:53.565
of more sustainable performance,

357
00:15:54.035 --> 00:15:56.405
even pats on the back awards and all of that.

358
00:15:56.785 --> 00:15:59.285
So you have to create that momentum in the organization.

359
00:15:59.425 --> 00:16:01.765
So not only do I have the willingness to be sustainable,

360
00:16:02.105 --> 00:16:04.965
the company has created the conditions for me

361
00:16:05.145 --> 00:16:08.605
to act more sustainably, providing autonomy to the employee

362
00:16:08.905 --> 00:16:10.125
to act sustainably.

363
00:16:10.195 --> 00:16:13.445
I've had chief sustainability officer of, of a company

364
00:16:13.445 --> 00:16:15.165
that's a hundred thousand,

365
00:16:15.555 --> 00:16:17.165
that is a hundred thousand employees.

366
00:16:17.905 --> 00:16:22.545
And he told me that, you know, nobody needs to come to me

367
00:16:22.565 --> 00:16:25.745
to ask for permission anymore to do the right thing.

368
00:16:25.775 --> 00:16:27.825
They know they're part of the business better than I do.

369
00:16:27.965 --> 00:16:30.465
So I mean, imagine if a hundred thousand people needed

370
00:16:30.465 --> 00:16:32.665
to come to ask for permission to, can I do this?

371
00:16:32.665 --> 00:16:34.545
Can I do that? You know, that would be a log champ.

372
00:16:34.925 --> 00:16:36.505
So employee empowerment and,

373
00:16:36.525 --> 00:16:38.425
and is, is very, very important.

374
00:16:38.765 --> 00:16:40.825
Or sustainability, autonomy is very important,

375
00:16:40.965 --> 00:16:43.145
and I, these are all things that have shown

376
00:16:43.145 --> 00:16:47.185
through empirical research that they actually end up kind of

377
00:16:47.725 --> 00:16:50.185
in employees behaving more sustainably at the end.

378
00:16:50.765 --> 00:16:53.945
So creating that culture, providing measure, measurements

379
00:16:54.045 --> 00:16:58.665
of progress, you know, those are all part of, part, part

380
00:16:58.665 --> 00:17:03.025
and parcel of, of creating that palpable kind of, you know,

381
00:17:03.025 --> 00:17:05.865
organization that, that culture in that organization that,

382
00:17:05.925 --> 00:17:08.865
yes, this is an important thing that, that we do.

383
00:17:08.865 --> 00:17:11.785
It's not an afterthought. It is, it is kind of who we are.

384
00:17:12.225 --> 00:17:14.625
I would say individual government dependent.

385
00:17:14.745 --> 00:17:17.665
I mean, so, I don't really know

386
00:17:17.665 --> 00:17:20.785
where the United States will be, you know, kind of,

387
00:17:20.975 --> 00:17:22.865
over, over the next four years in terms

388
00:17:22.885 --> 00:17:25.785
of their climate goals and their climate ambitions and,

389
00:17:25.785 --> 00:17:26.865
and, and, and so on.

390
00:17:27.445 --> 00:17:30.345
Um, I, I would say that it's too dangerous

391
00:17:30.485 --> 00:17:35.185
and too risky to, to put our planet's future in the hands

392
00:17:35.185 --> 00:17:37.905
of those individuals who feel like they can continue

393
00:17:37.905 --> 00:17:39.905
to drill for oil,

394
00:17:40.245 --> 00:17:44.185
and, which our president has essentially pledged to do.

395
00:17:44.845 --> 00:17:47.305
Um, and, and think of a good future, you know,

396
00:17:47.465 --> 00:17:48.705
a longer, think of a good longer

397
00:17:48.705 --> 00:17:49.705
Term future.

398
00:17:49.715 --> 00:17:52.205
Therefore, I, I really believe that it is up

399
00:17:52.205 --> 00:17:55.245
to purpose driven leaders, you know, corporate leaders

400
00:17:55.985 --> 00:17:58.125
and who, who need to do this for survival.

401
00:17:58.185 --> 00:18:00.565
So sustainability, if you actually look at the meaning

402
00:18:00.585 --> 00:18:04.925
of the word, it's, it's about survival and, you know, and,

403
00:18:04.945 --> 00:18:06.205
and, and, and citizens.

404
00:18:06.545 --> 00:18:09.005
Uh, so, and when I say citizens, I mean, you know,

405
00:18:09.005 --> 00:18:13.285
people like you and I, consumers, we have to kind of,

406
00:18:13.345 --> 00:18:15.525
you know, take the matter in our hands

407
00:18:15.625 --> 00:18:17.565
and not only vote with our wallets

408
00:18:17.565 --> 00:18:19.165
for the more sustainable companies.

409
00:18:19.745 --> 00:18:21.565
Um, you know, let me throw an example.

410
00:18:21.715 --> 00:18:24.965
Patagonia, I mean, so, so you want to best, best, best,

411
00:18:25.765 --> 00:18:27.165
practice examples of companies

412
00:18:27.165 --> 00:18:28.925
who are doing well by doing good.

413
00:18:29.045 --> 00:18:31.085
I mean, Patagonia is a, is a classic example.

414
00:18:31.085 --> 00:18:32.405
They've changed their business model.

415
00:18:32.545 --> 00:18:36.045
So changing the business model from owning,

416
00:18:36.065 --> 00:18:39.525
so here we go against ownership, the idea against,

417
00:18:39.555 --> 00:18:42.965
from against owning to actually just renting or,

418
00:18:43.025 --> 00:18:45.565
or using, you know, products and services.

419
00:18:45.805 --> 00:18:48.045
I mean, car sharing, giving up your car

420
00:18:48.065 --> 00:18:49.365
to just use a car sharing

421
00:18:49.385 --> 00:18:51.125
or public transportation would be a simple

422
00:18:51.125 --> 00:18:52.805
example, straightforward example of that.

423
00:18:53.145 --> 00:18:55.525
But now Patagonia is saying, don't buy a new jacket.

424
00:18:55.595 --> 00:18:56.925
Just send us back your jacket.

425
00:18:57.055 --> 00:18:58.925
We'll, we'll fix it and send it back to you

426
00:18:59.305 --> 00:19:01.525
to extend its life as, as, as much as possible.

427
00:19:02.325 --> 00:19:04.085
Phillips is saying, don't buy a light bulb.

428
00:19:04.305 --> 00:19:06.445
Let us take charge of, you know, lighting your house.

429
00:19:06.445 --> 00:19:10.245
That's what you care about. So I think this interaction

430
00:19:10.245 --> 00:19:13.885
between companies and consumers is far more important,

431
00:19:13.905 --> 00:19:15.685
and consumers taking the reins

432
00:19:15.705 --> 00:19:18.725
and saying, yes, I don't need

433
00:19:19.185 --> 00:19:21.645
to own the light fixtures in my house.

434
00:19:21.825 --> 00:19:25.685
If somebody takes care of it for me, I will pay a, a, a a,

435
00:19:25.845 --> 00:19:27.885
a monthly rental for, for, for, for this.

436
00:19:27.905 --> 00:19:31.085
What's wrong with that? You know, if that mindset kind

437
00:19:31.085 --> 00:19:32.965
of including our clothing, right?

438
00:19:33.045 --> 00:19:36.045
I mean, so, so we can just, if you, we, if we can sleep on,

439
00:19:36.665 --> 00:19:38.285
hotel bedsheets

440
00:19:38.285 --> 00:19:39.405
and use their towels,

441
00:19:39.505 --> 00:19:43.045
why can't I just rent my jacket on my size and,

442
00:19:43.065 --> 00:19:46.405
and not having, so many jackets laying around in, in my,

443
00:19:46.425 --> 00:19:48.845
you know, closet and, and not not being used.

444
00:19:49.065 --> 00:19:52.125
So there are many ways of re reconfiguring kind of

445
00:19:52.125 --> 00:19:54.725
what life is and, and what it is that we truly need

446
00:19:54.725 --> 00:19:56.565
and what we don't need, because

447
00:19:56.665 --> 00:19:57.885
let me leave you with this one.

448
00:19:57.885 --> 00:20:01.965
Thought consumption is at the root of, of this problem.

449
00:20:02.555 --> 00:20:05.045
It's over consumption that's at the root of this problem.

450
00:20:05.225 --> 00:20:08.365
If we are not able to cut our consumption in the developed

451
00:20:08.365 --> 00:20:10.205
world, I mean, the part of the world doesn't even have

452
00:20:10.405 --> 00:20:12.445
anything to consume, but in the developed world,

453
00:20:12.445 --> 00:20:14.205
if you cannot cut our consumption footprint,

454
00:20:14.755 --> 00:20:16.485
then nothing else will, you know, this,

455
00:20:17.165 --> 00:20:19.685
whatever we are talking about ultimately will make a

456
00:20:19.685 --> 00:20:19.965
difference.

Exploring Ownership and Sustainability's Human Drives

00:00:00 - Ownership is a concept that has, has a long kind of history. I mean, for example, the philosopher Jean Paul Satre even said something, to the effect of, we are what we own. I mean, you know, so ownership is part of the human condition, and ownership helps fulfill three fundamental human drives. The first is the drive for self-efficacy. Each of us as human beings wants to be competent in whatever we try to do, whether that's being able to screw on a light bulb or, or whether that's being able to drive a car

00:00:37 - And sustainability clearly offers, you know, any of us, plenty of opportunities to, to display a sense of ownership, because we can all do fairly simple things like turn off light bulbs or, you know, print double-sided, or not print at all, or, or what have you. Sustainability offers the opportunity for us to feel, feel efficacious. So that's drive number one. The second drive is the drive for identity.

00:01:07 - and we don't define ourselves just in terms of, you know, I'm a man, I'm, you know, so many years old, et cetera. But also socially I want, I work for a company that is sustainable. So that's like a big kind of, you know, a source of pride, a big source of identification for human beings. And given the sustainability is so critical and so important in the news today, employees, find, you know, being able to hang their hat on sustainability

Fulfillment Through Ownership: The Connection to Sustainability

00:01:40 - you know, a big source of job, meaning, you know, which is, which is lacking in today's world, quite a bit. And the third drive that ownership fulfills is the drive for belongingness. So we are all, again, as well, kind of community members, and we have families and, and, and all of that. So there, how ownership helps is that if you're working on climate change, for example, you can tell yourself at, what, when you go to bed at night that I'm doing something for my children.

00:02:11 - children in, in the future. and so the sense of belongingness is also fulfilled by engaging in sustainability. So these three, these three fundamental human drives, that ownership, that the cons fundamental concept of psychological ownership fulfills are also fulfilled by the concept of sustainability ownership, which is what I proffer in the, in, in the book, you know, and from that individual sense of ownership comes a bigger collective sense of ownership.

00:02:44 - and such kind of, you know, for example, the Roundtable for Sustainable Palm Oil that came about when, you know, lots of big companies like Nestle and Unilever and Coca-Cola, you've gotta stop deforestation that's happening in, in, in the context of palm oil. And So they formed a consortium. So that's when it becomes like, okay, it's not just, you know, my planet or your planet, but it's kind of our planet. That's, that's the big thing. Currently, we are using 1.7 planets worth of resources

Understanding Earth Overshoot Day and Its Implications

00:03:14 - So we have a concept called Earth Overshoot Day, which is the day in the year by which the earth has exhausted its natural, capacity for air, for water, for, for waste in landfills, and, and, and all of that. And that in 2024, that fell on August one, whereas the optimal date for it is December 31. And, you know, as, as, as early back, I would, I would say

00:03:45 - the earth overshoot day was in fact about December 31. So in this period, we have managed to, to, to fast forward it to, to August one, which if you do the math, it's basically 1.7 planets worth of resources. And if we continue on this business as, usual trajectory, we have, we are projected to use three planets worth by, by 2050. You know, now, you might be a big fan of Elon Musk, who's is probably in the limelight right now, and who said, well, we are gonna export half the population

00:04:17 - And, but I am much more of a, you know, realist when it comes to that. I said, well, we only have this one planet, and we can, we need to do whatever we can to, to preserve it. If you look at a corporation, there are opportunities to be sustainable in every aspect of what the company does from procurement office, raw materials to the disposal of its finished products. And every department can conceivably play a role like

Mainstreaming Sustainability in Corporate Culture

00:04:50 - marketing, you name it. And therefore, why, you know, should we relegate sustainability to one department when kind of mainstreaming it and embedding it in corporate DNA, making it everybody's job would essentially kind of, you know, multiply the acceleration, many, many, many fold, and your company can achieve, you know, progress. I mean, we are not talking about success here. We are just talking about progress.

00:05:21 - on its sustainability journey if, if it engages, its, its workforce kind of, you know, wholesale. And there are many, many benefits to that, which we'll talk later. But, you know, the, you know, there's a palpable energy in the company, kind of, okay, we are, we, we are, we, we are on the right path, we are doing the right thing. And, you know, increased productivity, increased loyalty, all the, all these kinds of things that I'm sure we are gonna discuss on the path. The first barrier is, is really the mindset

00:05:53 - And the mindset of the leadership still predominantly says that the purpose of a business is to maximize profits. Actually, that's a resoundingly false, statement. The purpose of business is truly to create value for all stakeholders, you know, so not just shareholders, but as well your employees, your consumers, your, your, your suppliers, your community members, and so on. And only by creating that value are we gonna make profits.

Shifting Mindsets: Beyond Profit Maximization

00:06:26 - before value creation is rather ludicrous. But given the rhetoric kind of in society, Milton Friedman famously said 50 years ago that the purpose of business is, is to maximize profits, you know, and people have taken it to heart. I mean, you know, because it's, well, money, money is real. Whereas, you know, the planet and, and its future, who knows, you know, a CEO is gone in four years et, you know, tenure

00:06:56 - So we have to work on changing that mindset. And education, I think is the only answer of the, the younger generations, or the only answer, I did a study that was published last year in the Sloan management review of, of, a study of employees in the United States, and it turns out that 34%, only 34% of the companies or or employees believe that their companies have a higher purpose, you know, relative

00:07:26 - to articulate their value. I mean, so I this after a lot of talk, you know, and the business roundtable in the United States having come out and said that, well, you know, the business has to look at, more beyond profits and so on and so forth. I would say that that's a disappointing outcome. That's a disappointing result, you know, in today's day and age, and we, we, we need to battle that one. So, so that's kind of job one. You know, that's the, i I would say that that's the,

Defining Focus in Corporate Sustainability

00:07:57 - And then the second biggest barrier, I would say is companies wanting to be everything to everybody, you know, in, in terms of sustainability. So, you know, so, so there's really no, no focus, no, no sharply defined focus. And what we know from research and from the companies that have been successful is that kind of, you really need to define some material goals. So this concept of ownership that I was telling you, ownership does not happen in a vacuum.

00:08:31 - some specific things that your company, you know, is going to do. So, okay, we are going to tackle carbon and we are going to tackle waste. You know, that, that makes sense. And an employee can get it into his or her head that these are, you know, important goals for my company. If you say sustainability at large, you know, it can include anything from, you know, diversity, inclusion, you know, gender equity. I mean, it's a very, very large portfolio of things.

00:09:04 - you know, you, you, you, you, you're gonna fail. And, and, a, a case in point is, is is Unilever. I mean, they, I worked with this, company very closely and with Paul Pullman very closely. And at the time, the Unilever Sustainable Living Plan had, you know, like seven, big goals and, and 50 KPIs and so on and so forth. and whilst they made progress and on all of them, the progress that they made was

Empowering Collective Sustainability in Organizations

00:09:33 - And so they've cut it down to kind of now four, you know, fundamental areas that they want to work in. So I think that's a good move. And, and if a firm can articulate their purpose and define what is material for them for that, you know, a bank does not have to go after the same three things that a, that a cement manufacturer has to go for, right? So if you can clarify and focus on, you know, the three things that you and your employees want to collectively achieve, I think we would be making, much more progress.

00:10:04 - mail room to the boardroom. Everybody has a role in, making their companies more sustainable. So the person working the mail room can actually sort the mail in a, in a good way and, and recycle whatever can be recycled. And, on and on. The person in the boardroom, you know, is, is in charge of resources. So that person in the boardroom will need to make sustainability a priority for the company and,

00:10:35 - of what needs to be, what they need to do to, to kind of play their part and so on. So everybody has a role. So it's talk about the corporate sphere, because that's a tangible place to start, but ultimately we need to be sustainable in our, in our homes as well, kind of in our private spheres as well. So, so no, we are notating responsibility. we are, we are, we are spreading response. We are making it everybody's job. So, so how, you know, how do we do that was your,

Engaging Employees in Sustainability Initiatives

00:11:05 - and I think that after purpose and material, I mean, which are the key two first steps for a company, then we have to, essentially, the next two steps would be kind of enticing employees to join the sustainability journey. I mean, you know, so, so you're a 30-year-old salesperson. I mean, you're going to say, what you want to put more on my plate now? You know, so this is also my job. what gives, right? I mean, you know, so and so, but you have to kind of speak to that person and,

00:11:34 - I mean, you know, and it's not just for you, but it's for all of us or whatever. And my research shows that there are mainly two appeals that work. There two kinds of appeals to employees. I mean, one is an appeal to the, to the head. I mean, like, look, I mean, saving on raw materials will kind of not only make the planet more sustainable, but it'll also save us money. Now, there is a whole group of, of line managers, I mean, who have bottom line responsibilities, whose ears actually perk up at the thought

00:12:06 - the thought of saving the planet. But you've gotta feed the beast what it wants to eat, and of, you know, so, so that's the, that works there. Whereas there are appeals to the heart, it's like, to the middle management that's more effective. It's like, Hey, you know, what are your children going to do if we do not kind of, you know, solve this problem for them kind of at this, at this point in time, and more. And so, so, so company like Marks and Spencer, you know, kind of actually, they, they,

Engaging Employees in Sustainability Initiatives

00:12:38 - which is a great British culture as we know, to, to go for a, a, a pint after a hard base of work. And, and that's where they can foster these kinds of conversations about kind of the state of the planet and, and what, what are we doing about it kind of thing. so it's different strokes for different folks, and oftentimes it's a hybrid appeal, like both the head and the heart and all of that. But that's, that's one part only. And, and you need sustainability ambassadors for that, for doing that. So, so, because the top management cannot deal with, clearly

00:13:12 - that it's kind of like a bell curve. I mean, the employees dis, you know, kind of, attitude towards sustainability. So on the right hand side of that bell curve, you will find that it'll be a good 20% of employees who are just willing to run with it. They want their company to be more sustainable. They're the younger ones, you know, kind of, and they, and, and they know what's going on and all, all of that stuff. So you need to tap into that group before anyone else, and, and make them ambassadors, make them evangelists,

00:13:43 - the middle, you know, 50 to 60% who really have no, they, they, they're, they're on the fence. They're neutral. They, they're willing to be convinced, you know, and forget about the 20% diehards, you know, who you know are deniers. Maybe they, they, they're, you know, climate deniers are, are, they don't care about food waste or, or, or what have you. And so, so there's no need to go after them. But if you get 80% of the organization moving in a, in a particular direction, I think that's great.

Empowering Sustainability Through Training and Default Choices

00:14:14 - I mean, solving the willingness issue is only solving part of the problem. You have to solve the ability problem as well, because everything in sustainability is not like putting off lights and, and, printing two-sided, which I mentioned earlier. I mean, there are very, complex kind of scientific things like, you know, eco-efficiency analysis for which you need training, essentially. So a company needs to empower its employees by providing investing in training, you know, so giving them the skills that they need to, to be more sustainable, alter the kind

00:14:48 - What do I mean by that? I mean that you have to lower the costs of being sustainable and increase the benefits of being sustainable. How do you lower the costs? Well, if something is there at the push of a button, you know, or if it's the default option, if I, I'll give you a very simple example. If the default option in your organization is two-sided printing, you know, then you will print two-sided without making an effort, right? But if the default option is one-sided printing,

00:15:22 - it just freaks me out. People will, they will not make that extra effort to go into the settings and change it to two sided. So if things will, if the default option is more sustainable, then costs are low of acting sustainably, right? What do I mean by increasing benefits? I mean, kind of tying incentives to, to sustainability performance, tying your variable compensation to, to sustainability performance. That goes a long way as do psychic rewards,

Empowering Employees for Sustainable Action

00:15:52 - of more sustainable performance, even pats on the back awards and all of that. So you have to create that momentum in the organization. So not only do I have the willingness to be sustainable, the company has created the conditions for me to act more sustainably, providing autonomy to the employee to act sustainably. I've had chief sustainability officer of, of a company that's a hundred thousand, that is a hundred thousand employees. And he told me that, you know, nobody needs to come to me

00:16:25 - They know they're part of the business better than I do. So I mean, imagine if a hundred thousand people needed to come to ask for permission to, can I do this? Can I do that? You know, that would be a log champ. So employee empowerment and, and is, is very, very important. Or sustainability, autonomy is very important, and I, these are all things that have shown through empirical research that they actually end up kind of in employees behaving more sustainably at the end. So creating that culture, providing measure, measurements

00:16:58 - and parcel of, of creating that palpable kind of, you know, organization that, that culture in that organization that, yes, this is an important thing that, that we do. It's not an afterthought. It is, it is kind of who we are. I would say individual government dependent. I mean, so, I don't really know where the United States will be, you know, kind of, over, over the next four years in terms of their climate goals and their climate ambitions and,

Rethinking Ownership for Sustainable Futures

00:17:27 - I, I would say that it's too dangerous and too risky to, to put our planet's future in the hands of those individuals who feel like they can continue to drill for oil, and, which our president has essentially pledged to do. and, and think of a good future, you know, a longer, think of a good longer Term future. Therefore, I, I really believe that it is up to purpose driven leaders, you know, corporate leaders

00:17:58 - So sustainability, if you actually look at the meaning of the word, it's, it's about survival and, you know, and, and, and, and citizens. so, and when I say citizens, I mean, you know, people like you and I, consumers, we have to kind of, you know, take the matter in our hands and not only vote with our wallets for the more sustainable companies. you know, let me throw an example. Patagonia, I mean, so, so you want to best, best, best, practice examples of companies

00:18:29 - I mean, Patagonia is a, is a classic example. They've changed their business model. So changing the business model from owning, so here we go against ownership, the idea against, from against owning to actually just renting or, or using, you know, products and services. I mean, car sharing, giving up your car to just use a car sharing or public transportation would be a simple example, straightforward example of that. But now Patagonia is saying, don't buy a new jacket. Just send us back your jacket. We'll, we'll fix it and send it back to you

Reimagining Consumption: Embracing Rental Over Ownership

00:19:02 - Phillips is saying, don't buy a light bulb. Let us take charge of, you know, lighting your house. That's what you care about. So I think this interaction between companies and consumers is far more important, and consumers taking the reins and saying, yes, I don't need to own the light fixtures in my house. If somebody takes care of it for me, I will pay a, a, a a, a monthly rental for, for, for, for this. What's wrong with that? You know, if that mindset kind

00:19:33 - I mean, so, so we can just, if you, we, if we can sleep on, hotel bedsheets and use their towels, why can't I just rent my jacket on my size and, and not having, so many jackets laying around in, in my, you know, closet and, and not not being used. So there are many ways of re reconfiguring kind of what life is and, and what it is that we truly need and what we don't need, because let me leave you with this one. Thought consumption is at the root of, of this problem.

00:20:19 - If we are not able to cut our consumption in the developed world, I mean, the part of the world doesn't even have anything to consume, but in the developed world, if you cannot cut our consumption footprint, then nothing else will, you know, this, whatever we are talking about ultimately will make a difference.

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