Kathleen Enright writes about corporate accountability towards the SDGs, based on observations from the WEF annual meeting in Davos. What are the components of corporate accountability and how can companies strengthen their mechanisms to support implementation of the 2030 agenda?
KEY TAKEAWAYS
- The economic discussions at the World Economic Forum’s main Congress were shockingly far removed from the need to address the climate crisis. The only way forward is a different type of growth that values nature, creates equality, and is built on circular and regenerative principles.
- The article suggests an embryonic transformation blueprint emerging from the WEF that offers reasons to be optimistic, including valuing biodiversity and nature, redirecting philanthropic giving towards enabling corporate progress against the SDGs, and powerful partnerships that deliver business resilience.
- To achieve progress towards the SDGs, we need a new model of leadership that puts long-term corporate survival above short-term financial gain and the planet’s priorities before those of shareholders. Leaders who are willing to take on traditional business silos are needed to create the holistic approach required to succeed.
Many will know that there isn’t one Davos, but many versions happening in parallel. Beyond Congress Davos, where political leaders convene, is peripheral Davos where the SDG skis are planted and the climate and business conversations take place.
In this fringe Davos, the vision of the future that was being shaped in the main Congress was one of realism at best and dystopian at worst – a world where people get poorer not richer, robots create mass unemployment and an addiction to fossil fuels leads to the inevitable extinction of the planet.
It felt shocking just how far removed the global economic discussions were from the need to address the climate crisis. The target of limiting the Earth’s average temperature to 1.5C above pre-industrial levels is slipping from our grasp and, having pushed the planet to the brink of catastrophe, far too little is still being done to pull it back from the edge. We must break the mindset that 1.5 degrees is a political target and accept that it is a physical limit. The only way forward then is built on a different type of growth – one that values nature, one that creates equality and one that is built on circular and regenerative principles. It can’t be the linear pursuit of profit of our current trajectory.
Given the amount of airspace the need to put planet before profit receives, the number of frameworks for doing better business we’ve created and the ESG policies being published by global corporations, shouldn’t we be doing better? The Sustainability Development Goals are right there, laying out a roadmap to a better future – and ultimately setting the goal post to be reached in order to stay in business. We’re well past the ‘nice to have’ – ambitious sustainability strategies are the only way that businesses will deliver on their growth ambitions.
Reasons to be (almost) cheerful
Despite the many disparate sessions at the forum, we did see an embryonic transformation blueprint emerging that offers reasons to be optimistic and will hopefully see most corporates fast moving to the ‘HOW do I do this?’ phase. The key elements of this, and what we are viewing as future catalysts for change, included:
1. Valuing biodiversity and nature as we should
The goal of “saving nature” has a greater emotional pull than “limiting climate change” and the carbon tunnel approach that struggles to deliver the necessary inspiration to action. This comes off the back of the commitments made at the UN Biodiversity Conference in Montréal, where 195 countries agreed to protect 30 percent of the planet’s land and oceans by 2030. We know the ‘what’. The challenge now is the ‘how’.
The ‘how’ will start with economic metrics for valuing nature, the development of tradeable credits and an accurate valuation of risk around the destruction of biodiversity. Lots of agreement but difficult to see where to start and who will take the first step. When this ‘alternative’ financial system emerges, it must be built on the painful lessons learned from the issues surrounding the carbon credit scheme; the limited availability of nature-based credits, long lag times between investment and sale of credits, and the proliferation of low-quality projects that fail to deliver the advertised benefits or have negative outcomes.
2. Forging a new kind of corporate philanthropy
WEF reports that $810bn was donated by philanthropic organisations in 2021, but just 2% went to projects that reduce carbon emissions. This represents a tremendous missed opportunity to leverage philanthropic giving for climate action. If a significant proportion of that money could be redirected towards enabling corporate progress against the SDGs, a new era of corporate transformation could arise.
While initially dismissive of the power of philanthropy to create real change, we left inspired by the untapped potential of corporate foundations to promote impact over revenue. This included the launch, supported by 45 philanthropic organisations, of Giving to Amplify Earth Action (GAEA) which aims to close the £3trn annual finance gap between current support for climate and environmental initiatives and that needed to meet international agreements.
3. Powerful partnerships deliver business resilience
Not enough is discussed on the topic of business adaptation and resilience. This will need adaptative business and sustainability strategies – active strategies that can respond to the fast pace of change.
Mobilising the power of different types of partnerships, between big business, government, academic institutions, entrepreneurs, and organisations on the ground, builds business resilience by increasing both foresight on the issues that are on the horizon and the ability to innovate solutions at speed and scale. The right partnerships will connect businesses into change-driving activities that link to their areas of expertise and influence. Business partnerships can draw developing nations into the net-zero economy, vital if the SDGs are to be reached. Innovators can bridge the gap between academics developing global solutions and corporations with the power to scale and normalise those solutions. If these partnerships are about promoting product then you’re missing the opportunity. Partnerships that build business resilience are the ones that are fundamentally challenging and uncomfortable – that should be the true measure of a successful partnership.
4. Updating leadership models
The conversations at Davos revealed that many CEOs still view sustainability and climate change as a risk rather than an opportunity – and even then, one that is too low on their risk list. This narrow, short-term view is restricting progress, and damping the possibility of creating true corporate accountability for the SDGs. What we need is a new model of leadership, espoused by a fresh generation of leaders who dare to think in new ways about value creation and the role of business in society. Leaders who have been raised to put long term corporate survival above short-term financial gain and the planet’s priorities before those of their shareholders. Leaders who are willing to take on traditional business silos in order to create the holistic approach that is needed to win in the face of an ecosystem challenge.
Connecting accountability to crises
While the topics addressed at Davos were too fragmented to produce concrete solutions, there was an acknowledgement that the ‘poly-crises’ facing us are all connected. Inequality, the eradication of which in its many forms underlies the SDGs, was recognised as a catalyst for the most pressing issues we need to address.
From a corporate perspective, questions arose around how to connect equity, climate change and nature’s needs within existing business structures. It was clear that only by creating new internal and external governance models can businesses unlock progress on the SDGs. But let’s not waste new governance models on old metrics – financially incentivising progress against sustainability targets only risks lowering the ambition level. A progressive mindset would dictate that calculated trial and error is rewarded in order to forge a new path forward.
Why should corporates be accountable for achieving the SDGs? Because if the goals aren’t met, if there isn’t a transformation to a safe and sustainable way of doing business, then there will be no more business to be done. We need to unite to accelerate change, both within the current economic system and in creating a new one. To stop wrangling about the details, about who is going to take the lead, to overcome the disconnect between true cost and fiscal pricing, and to be honest about the role we should, but are not yet, playing.
Forty percent of global CEOs think their organisation will no longer be economically viable in ten years’ time if it continues on its current course. That stark data point underscores a dual imperative facing 4,410 CEOs from 105 countries and territories who responded to PwC’s 26th Annual Global CEO Survey. Most of those CEOs feel it’s critically important for them to reinvent their businesses for the future.
That’s a brutal awakening. Let’s not miss the opportunity this provides to question whether in meeting your sustainability strategy you would meet your business strategy. Are you doing enough to stay in business?
About the Author
Kathleen Enright is the Global Managing Director of Salterbaxter, the creative consultancy pioneering business progress for the global agenda and Publicis Groupe’s global centre of excellence in sustainability.
References
- https://news.un.org/en/story/2022/10/1129912
- https://sdgs.un.org/goals
- https://www.unep.orun-biodiversity-conference-cop-15
- https://www.mckinsey.com/capabilities/sustainability our-insights/a-blueprint-for-scaling-voluntary-carbon-markets-to-meet-the-climate-challenge
- https://www.edie.net/davos-i vestors-and-planthropists-vow-collaboration-to-unlock-3trn-a-year-for-climate-and-nature/
- https://www.weforum.org/press/2023/01/new-initiative-to-help-unlock-3-trillion-needed-a-year-for-climate-and-nature/
The Pernicious Myth of Working Two Remote Jobs
By Dr Gleb Tsipursky
We all love a good story. Perhaps that’s why entertaining but spurious beliefs have such a strong tendency to take root in the collective psyche of the public at large. If you’ve heard the one about all the remote workers with two jobs, read on.
KEY TAKEAWAYS
“I would bet 10 per cent or more of our remote staff, especially programmers, are working two remote jobs! We need to stop this before it escalates and get everyone back to the office.”
Thus spoke the Chair of the Board of a Fortune 1000 tech company when I met with the Board to help them figure out the company’s plans for permanent post-pandemic work arrangements1. Having helped 19 organisations determine their hybrid and remote work plans, I heard such sentiments all too often.
So I asked him where he got his information. He told me he sits on other company boards. That’s what he heard from other board members, and he guesses the same thing goes on here.
Salacious Headlines About Working Two Remote Jobs Fuelling Leadership Mistrust of Remote Work
“These people who work from home have a secret: they have two jobs,” screams2 a headline from The Wall Street Journal. The Guardian writes3 that “‘It’s the biggest open secret out there’: the double lives of white-collar workers with two jobs.” And according4 to Bloomberg, “Many remote workers secretly juggle two full-time jobs – or more.”
These articles, and many similar ones, mostly have a similar structure. The journalist interviews an anonymous remote employee, usually in tech-related fields, about how they managed to secure a second job working remotely. The employee speaks of the additional money they’re able to secure, which is worth the burdens of working many more hours. There are often exciting and dramatic escapades of how they just managed to avoid getting caught. At times, there are cautionary tales of workers who were found out – and fired.
These types of articles play on our narrative fallacy5, a dangerous mental blind spot that causes us to understand the world through stories, rather than facts. Sure, stories can be useful illustrations of broader data points. But the danger stems from stories that speak to our feelings and intuitions, without regard for the actual evidence.
Such stories feed into our mind’s availability bias6. This cognitive bias refers to the fact that we tend to pay attention to the information that’s most available in our memory. Such salience occurs because these story-based articles arouse our emotions, which are especially stimulated7 by the crime-like elements in these tales.
It’s no surprise that the more traditionalist8 executives and board members who read these narratives integrate these stories into their vision of reality. After all, one of our most fundamental cognitive biases is the confirmation bias9, our mind’s predisposition to look for information that confirms our beliefs, regardless of whether the information matches the facts. They latch on to such stories, and then repeat them in C-suite and board meetings – as did the Chair of the Board of the Fortune 1000 tech company.
The Facts About Working Two Remote Jobs
To be clear, I have no personal stake in any specific outcome; my priority is getting the right information to serve10 my clients. That’s why my first source of information for external benchmarks on employment and similar economic data is FRED – Federal Reserve Economic Data11.
FRED gathers a variety of economic data, mainly from US government agencies, as well as other high-quality sources12, to provide long-term trends on the US economy. FRED’s goals are to provide the most accurate information possible, so that everyone from the Federal Reserve to the executives at Fortune 1000 companies to the founders of start-ups can make the best business decisions, thus maximising government tax revenue. FRED has no interest or stake in promoting in-office, hybrid, or remote work.
So what does FRED tell us? Let’s consider the data on multiple jobholders as a percentage of all employed members of the US workforce from 2000 onward.
As the graph below makes clear, we’re at a historically low point of employees holding multiple jobs. The high point was around the turn of the century, when 5.8 per cent of all workers held multiple jobs. Currently, about 4.8 per cent do so. Just before the pandemic, 5.2 per cent had more than one job.
That data encompasses both full-time and part-time jobs. Perhaps the story is different for those holding down full-time jobs? Let’s see what FRED has to say.
Not really. In July 2022, 438,000 workers had two full-time jobs, or 0.27 per cent of the total working population of 163,500,000 this year. That compares to 418,000 in July 2000, or 0.3 per cent of the total workforce of 138,800,000 that year. So while we’re not at a particularly historically low point of workers holding down two full-time jobs, we’re just about average–; and the 10 per cent theorised by the Chair of the Board is much more than an order of magnitude too high.
But What About All the Anecdotes About Working Two Remote Jobs?
What about all these anecdotes reflected in the headlines? Isn’t the plural of anecdote said to be data13, the Chair of the Board asked me?
Well, the reality is that it’s true that many more remote workers are holding down two full-time jobs than in the past. Yet it’s not because the proportion increased; it’s still under 0.3 per cent. No, it’s because many more people are working remotely.
Thus, before the pandemic, Stanford University research14 shows that 5 per cent of all workdays were worked remotely. Two years into the pandemic, the comparable number is over 40 per cent of all workdays.
That’s over eight times more! Thus, of the tiny fraction of all employees who hold down two full-time jobs, a much larger proportion will be remote. So we’ll certainly hear more stories about it.
But the fact that more such incidents occur will not change the fact that it’s under 0.3 per cent of all workers. All those breathless headlines about two-timing remote workers – and the traditionalist executives who buy into them – ignore the underlying probabilistic base rate, meaning the actual likelihood of this scenario.
That’s a cognitive bias known as the base rate neglect15, where we focus on individual anecdotes and fail to assess the statistical likelihood of events. Similarly, even though travelling by plane is about 100 times safer16 than driving, the dramatic headlines surrounding plane crashes causes people to neglect statistics and travel by car, leading to many more fatalities.
Indeed, what executives often miss is that many of the employees who held down two full-time jobs before the pandemic did so from the office! Do you think people work a full eight-hour day when they come in? Far from it! Research finds that, on average, employees work from 36 per cent17 to 39 per cent18 of the time they’re in the office. The rest is spent on things like making non-work calls, reading social media and news websites, and even looking for – or working – other jobs.
Trust Your Staff
If you can’t trust a worker to work well remotely, you can’t trust them to work well in the office. And recent research19 by Citrix on knowledge workers – employees whose job can be done full-time remotely – shows that knowledge workers forced to come to the office full time show the least amount of trust in their employers, compared to hybrid or full-time remote workers. No wonder; their bosses are showing deep-rooted mistrust of their employees by forcing them to come to the office full time when their job can be done mostly or even fully remotely.
If that mutual trust between employer and employee is absent, the employee will disengage. A Gallup survey20on hybrid and remote work reveals that, when employees are required to work on-site but they both can and would prefer to do their job in a remote or mostly remote manner, the result is significantly lower engagement and well-being, and significantly higher levels of burnout and intent to leave. In fact, if the employer took away the option of remote work, 54 per cent of those working remotely would likely look for another job. Altogether, over three-quarters of all respondents want to work less than three days per week in the office.
Internal surveys from my clients align with these external surveys. For example, the University of Southern California’s Information Sciences Institute (ISI), a research institution with over 400 staff, originally decided21 in the summer of 2021 on a policy of three days in the office. Once the ISI leadership learned about my work and hired me as a consultant, they shifted in the fall of 2021 to a trust-based, flexible, team-led model22, with individual team leaders deciding together with their team members what worked best for each team.
A survey we conducted in August 2022 showed that, compared to the three days in the office policy, 73 per cent of the employees at ISI believed that the team-led model was “much better”, and 15 per cent felt it was “better”. These responses show a much higher degree of employee satisfaction and engagement through flexibility and trust. The same goes for retention and recruitment, on a survey question that research shows reveals this issue, namely whether survey respondents would recommend working at ISI to their peers. In their responses, 56 per cent said that the team-led model made it “much more likely” that they would make this recommendation, and 18 per cent said it would make them “more likely”.
In the end, the Chair of the Board of the Fortune 1000 tech company agreed that the best practice23 for the future of work is a collaborative, trust-based approach. Show trust to your employees, and they will trust you in turn. Accommodate their working styles and preferences, and they will repay you with higher engagement, productivity, and loyalty. And make decisions using data, not stories.
About the Author
Dr Gleb Tsipursky helps leaders use hybrid work to improve retention and productivity while cutting costs. He serves as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. He is the best-selling author of seven books, including the global best-sellers Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters and The Blindspots Between Us: How to Overcome Unconscious Cognitive Bias and Build Better Relationships. His newest book is Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage. His cutting-edge thought leadership has been featured in over 650 articles and 550 interviews in Harvard Business Review, Forbes, Inc. Magazine, USA Today, CBS News, Fox News, Time, Business Insider, Fortune, and elsewhere. His writing has been translated into Chinese, Korean, German, Russian, Polish, Spanish, French, and other languages. His expertise comes from over 20 years of consulting, coaching, and speaking and training for Fortune 500 companies from Aflac to Xerox, and over 15 years in academia as a behavioural scientist at UNC-Chapel Hill and Ohio State. A proud Ukrainian American, Dr Gleb lives in Columbus, Ohio.
References
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