Indholdsfortegnelse for 11. September 2023 i I by IMD

Transforming organizations to become more sustainable is perhaps the defining leadership challenge of our time. The need for change is now urgent, from both a climate and a social perspective. This transformation is a deeply complex and unique task for every business and industry. At IMD, we are fortunate to have the opportunity to learn from and support a diverse range of leaders and organizations as they navigate their way through it. This edition of I by IMD draws on these experiences, as well as deep insights from external experts, to explore the key factors of the sustainable business transformation challenge – from regulation and business models to purpose and talent This edition of I by IMD draws on these experiences, as well as deep insights from external experts, to…

1. Introduce the concept of Future Back. Explain its benefits and how it differs from traditional planning. 2. Describe the exercise. Explain the purpose of the exercise, which is to encourage participants to think creatively and collaboratively about the future. 3. Form groups. Make sure the groups are diverse and that everyone has a chance to participate. 4. Provide framing. Put up templates in group rooms covering the key questions that will help them think through a roadmap. 5. Set the task. Instruct the groups to tell a story from the future that leads to a sustainability outcome. Encourage them to be specific and to think about the steps needed to achieve that outcome. 6. Allow time for discussion. Give groups time to discuss and develop a deliverable outcome. Encourage…

At a time when sustainability is increasingly demanded of businesses, the European commerce landscape stands at the precipice of significant transformation. A rising number of regulations and standards, a surge in sustainability labels, and the evolving expectations of stakeholders have set new and complex norms for companies of all sizes and sectors to navigate But how do we move beyond the buzzwords and noise and genuinely infuse sustainability into the core of business operations? For the foundation B Lab Switzerland, the answer is clear: we need to push back against green- and impact-washing, cut through the complexity of the label jungle, support rather than demonize companies in their sustainability quest, and be clear about what true sustainability entails. A new legal framework, drawing on the strengths of existing rules and…

B Lab Switzerland, as part of the B Lab global movement, supports companies in the B Corp Certification process and has also developed national engagement programs: The Swiss Triple Impact Program, which helps Swiss organizations – regardless of size and sector – to set a clear and tailored sustainability strategy, and the Swiss Boards for Agenda 2030, an alliance of Swiss CEOs and board members committed to sustainability. To date, the certified Swiss B Corp community includes over 100 certified companies and, at a global level, more than 7,000 companies across 160 industries in 90 countries are certified B Corps. 150,000 firms also use the related B Impact Assessment tool, which evaluates how a company’s operations and business model impact workers, communities, the environment, and customers. The tool forms the…

ID • Joined Temasek in 2010, and held various leadership roles before becoming CEO, including Head of Temasek's Investment, Portfolio Management, and Enterprise Development Groups. He has also led various market teams including Singapore, and the Americas. • A member of the Future Economy Council, an initiative by the Singaporean government to oversee future skills and innovation efforts to prepare for potential technological or economic disruptions and opportunities. • Sits on the Financial Centre Advisory Panel of the Monetary Authority of Singapore and the boards of the National Research Foundation (NRF) and Enterprise Singapore. • Board Director at the Peterson Institute for International Economics, a US-based global economic think tank. • Formerly Managing Partner of WongPartnership LLP, one of the largest law firms in Singapore with clients around the world.…

Natural scientists propose that we have entered the Anthropocene, a new geological epoch created by the damaging impact of humans. Since the Industrial Revolution, our activities have been the main driver for Earth system changes and are responsible for pushing our use of resources beyond planetary boundaries. If collective industrial impacts have fundamentally altered the Earth's systems, then collective efforts are needed to ensure we do not go beyond sustainable limits. This calls for the transformation of entire sectors and all companies working along the same supply chain. For example, restoring biodiversity in a given geographical region will require every firm that depends on the natural resources in the area to change their practices. Also, reducing Greenhouse Gas Protocol Scope 3 emissions along the supply chain requires the cooperation of…

We’ve seen the stats: the global talent shortage could reach more than 85 million people by 2030. It will take 132 more years to close the gender gap. The average career is now expected to span 60 years. What does this all boil up to? We are at the “flipping point” – a time when collective, meaningful action meets the moment. This is where good intentions need to turn into intentional action. There isn’t a leader, employee, or student who is not in need of a skills refresher or enhancement. Being a digital expert is not “a one (degree) and done”, it’s a continual learning process. Just this summer, we saw the launch of Google Analytics 4, Threads, Twitter’s rebrand to X, and the phrase “generative AI” referenced in every…

1 The relationship between the EP and ESG scores of selected top 500 publicly listed firms, 2021. The top 500 firms shown in the chart are selected by total revenue in 2021 (firms with missing economic profit values were replaced by the firm with the next highest revenue). The x-axis quantifies the economic profit of companies while the y-axis depicts their ESG scores, sourced from Refinitiv Eikon. The ESG scores are based on publicly available company disclosures (e.g., annual reports, NGO websites, and corporate social responsibility reports) and range from 0 to 100 (with 0 being the lowest score and 100 being the highest). Europe includes Switzerland, Germany, Spain, France, the UK, Italy, Netherlands, and Sweden. North America includes Canada and the US. Asia includes China, India, Indonesia, Japan, South Korea,…

• Do not discuss or plan beforehand what your team is going to create. Always just pay attention to what is emerging in front of you. • Let each team member focus on their own dialogue with their flower. If you notice something, say it in a way not to disrupt their focus. • Even if you do not agree with the flow the previous member created, accept it without judgment and play with that flow. • When it is not your turn, check the balance and flow of the whole work. • Once all members have finished their turns, look at the work as a team and see whether there are parts that should be fixed. If the team agrees about changing something, make sure that the member who…

Can businesses do well by doing good? Should they? This question has eluded resolution for generations and is now taken up by Republican presidential candidates in the US from Ron DeSantis to Mike Pence, who are campaigning against ESG investing and what they see as the sinister threat of “corporate wokeism”. One candidate, pharma investor Vivek Ramaswamy, has even published an anti-ESG screed titled Woke Inc. and launched a family of anti-ESG exchange traded funds, evidently to prove that you can still do well by not doing good. Opponents of ESG and those who decry corporate social responsibility almost inevitably harken back to an article published a half-century ago by Nobel prize-winning economist Milton Friedman in the New York Times Sunday Magazine. The headline gives away the punchline: “A Friedman…

Future Back approaches have inspired sustainability initiatives across our interactions with program participants and corporate clients. We are seeing many companies shifting their strategy focus towards longer-term goals and acknowledging the need to improve their long-term planning toolkit. For example, one client, adept at short-term planning, sought ways to better prepare for shaping the future on more of a long-term basis, with Future Back thinking at its core. Other illustrations include the following: • A commodity company, aiming to lead in sustainable practices, found that by employing a Future Back approach, they could see potential in eco-friendly technologies, embracing renewable energy, land regeneration, and in engaging local communities. • A consumer goods company envisioned how to get to a circular economy future through packaging redesign, recycling collaborations, and sustainable consumption.…

Nicole Bardet, Board Member and Responsible for Corporate Loans at Banque Alternative Switzerland: "For us, it would be very important to have a model for change and economic transformation. With the help of a legislative framework, we can be much stronger and can go much further." Christophe Barman, Co-Founder Loyco, Co-president FSE and President Fédération Romande des Consommateurs: "We need a reference framework for what a sustainable business is. Today, we rely on private initiatives and our own judgment."…

The US, UK, Italy, France, and Spain have instituted legal frameworks that acknowledge businesses (“benefit corporations”) integrating social and environmental goals alongside their profit objectives. A parallel model is currently being proposed in Switzerland. B Lab and the Alliance for Sustainable Enterprises argue that it will deliver clarity to Swiss citizens, consumers, financial operators, and the nation at large. By doing so, it would further bolster Switzerland’s reputation as a hub for business and innovation. The primary characteristics and mandates of these existing frameworks include: 1. Directors' empowerment: These jurisdictions empower directors of benefit corporations with greater security and flexibility, enabling them to balance a wide range of stakeholder interests without facing criticism or legal challenges. 2. Soft governance: Benefit corporations are encouraged to enshrine sustainability principles in their statutes,…

Sustainable business transformation has thrown up a confusing array of organizations, regulations, and protocols. Here’s a quick guide to some of the most important: ESRS European Sustainability Reporting Standards. Adopted by the EU this year, the law requires all large companies and all listed companies (except listed micro-enterprises) to disclose information on the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment. ISSB The International Sustainability Standards Board aims to develop standards for a global baseline of sustainability disclosures to aid investors in their decision-making and enable companies to provide comprehensive sustainability information to global capital markets. GHP Scope 1-3 Greenhouse Gas Protocol Corporate Standard classifies a company’s emissions into three categories. Scope 1: direct emissions from owned…

Christine Diamente | Managing Director of Business Transformation at BSR. Diamente leads BSR’s Business Transformation team, helping companies manage sustainability throughout their business and across their supply chains and to develop resilient business strategies. She has over 20 years of experience in leading brand, sustainability, public affairs, communications, and reputation management with multinational corporations at the executive leadership level. Her role includes overseeing corporate relations with external stakeholders, such as the World Economic Forum (WEF), the UN, European institutions, and investors. Rasmus Valanko | Managing Director of Systems Transformation at the We Mean Business Coalition (WMBC). At WMBC, a global nonprofit coalition, Valanko works to implement systemic change by working with companies and partner organizations on climate change. Before joining WMBC, he led the sustainability transformation of the chemical company…

Give a man a fish and he’ll eat for a day; but teach a man to fish and he’ll destroy the ecosystem. American cartoonists Brant Parker and Johnny Hart (The New York Times, 2022) Four laws of ecology: 1. Everything is connected to everything else; 2. Everything must go somewhere; 3. Nature knows best; 4. There is no such thing as a free lunch. Barry Commoner, American cellular biologist and politician (The Closing Circle,1971) (The New York Times, 2022) It’s extremely hard – and rare – for an incumbent company to disrupt its own traditional industry, and at the same time absolutely necessary. Vanina Farber, economist and political scientist (A comment made at IPADE, Mexico, 2020) Noise pollution is a relative thing. In a city it’s a jet plane taking…

Before the pandemic, Jane was a well-respected CFO at a pharmaceutical company who drove an hour each way to the office. When the COVID-19 crisis hit, Jane – like millions of others – was forced to work from home. A silver lining was the extra time she had to spend with her grandchildren. As restrictions eased, however, the CEO wanted her back in the building fulltime. She had forgotten how many hours the daily commute consumed and tried to negotiate for a couple of days a week at home. But he refused. So she quit. He was shocked. What the CEO had failed to realize is that the pandemic has heralded a permanent shift in the way people want to be led. While several high-profile executives – among them Elon…

First introduced in 2007 as a niche investment strategy for enterprising philanthropists and foundations, the field of “impact investing” has since transitioned into a much broader movement: the “impact economy”. In a world confronted with numerous and overlapping crises, the impact economy provides a holistic framework for how we create, exchange, and distribute value. The impact economy envisions a future where impact investing is not just an option for niche players in the investment landscape, but a norm for the economy. In this future, investors would unleash more capital for social good, and entrepreneurs would build more innovative and scalable businesses that simultaneously match market demand and meet societal needs. Consumers would vote with their wallets for social businesses while governments and public agencies create more sustainable policies from the…

More than 25 years ago, a pioneering McKinsey study underlined the “war for talent” as a strategic challenge for companies. The study strengthened the focus on talent management as a discipline with greater emphasis on talent identification and succession planning. Yet even now, 80% of Chief Human Resources Officers (CHROs) say they lack the essential talent required to deliver their company’s strategy. Indeed, a quick survey of the literature conducted by the IMD Strategic Talent team in August suggests that no more than 15% of any organization is perceived as “talent” that should be invested in to support their progression towards bigger leadership roles. A great deal of effort in talent management is, therefore, expended in identifying these elusive high potential employees to manage their trajectory towards target leadership positions.…

It’s impossible to execute the right strategy if there are no options. Surprises crop up no matter how carefully we plan. Who would have thought, for instance, that young people prefer moderation? That abstinence is the new cool? Old-fashioned hard drinkers might ask: “What’s the point of low or no-alcohol versions of spirits and wines?” But the vast majority of consumers aged 18 to 34 are the ones switching – driving double-digit growth in this category within the beverage industry in the US, Germany, and Spain. The challenge in all this, if you happen to be a traditional incumbent, is the unpredictability of the business environment. When something fundamentally surprising can take off, the old way of reacting simply doesn’t work. For one, running a business always requires planning capacity.…

We live in extraordinary times. Over the last few decades, the globalized world economy has generated huge amounts of wealth and helped to lift hundreds of millions of people out of deep poverty. Advances in health care have raised life expectancy in almost all countries in the world, access to knowledge has increased dramatically, and the world of work has become more inclusive. Despite the prosperity and progress of recent times, the world urgently needs to transition to a more sustainable economic model. Among many signs thereof, the last eight years have been the warmest on record. And July 2023 was the hottest month ever recorded by a wide margin – a grim reminder that climate change is already disrupting life around the world. The scientific consensus is unequivocal: greenhouse…

Ian McAllister, a former director at Amazon, has described in a blog post on Quora how the company uses a similar tool to Future Back to infuse innovation processes. Through the “Working Backward” approach, employees who have ideas for new products or services are asked to write a press release. In most companies, a press release is written when a product is ready to hit the markets. Amazon turns this around. In their press release, the employee must describe the problem they identified, explain how existing solutions aren’t good enough, and how this new solution would benefit customers. Written in a language that is both convincing and simple for customers to understand, the press release is then shared internally. This process forces the employee to focus and flesh out the…

The path to a sustainable economy lies in a synergistic combination of private labels, standards, and a new regulatory framework that offers clear, detailed, and fair guidance and rules for all actors, developed in collaboration with a diverse range of interests, from NGOs to small businesses. To ensure the specific needs and views of the Swiss corporate and voluntary community are integrated into any proposal for a new kind of legal framework in the Swiss parliament, B Lab Switzerland has developed a manifesto to engage private sectors, individuals, and civil society organizations. For full details, go to www.blab-switzerland.ch/manifesto.…

CEO dialogue The year 2022 was a turbulent one for financial markets, with rampant inflation and the resulting rate hikes by central bankers leading to the worst stock market performance since the 2008 global financial crisis. Against this volatile backdrop, Temasek, a global investment company, is doubling down on its mission to build a resilient and forward-looking portfolio with sustainability at its core. Founded in 1974 to own and manage businesses and assets previously held by the Singapore government following the city-state's independence from Malaysia, Temasek has grown from a portfolio of 35 Singaporeanbased companies with a book value of 354 million Singapore dollars ($261m) to a global investment house worth 382 billion Singapore dollars (as of 31 March 2023). Ranked among the top 10 investors in the world (according…

Radical Collaboration - Five essential skills to overcome defensiveness and build successful relationships James Tamm and Ronald J Luyet Ask any leader who drives sustainability transformation if collaboration is important, you will get a sounding “yes”. Ask if collaboration is working well within his or her organization and with outside stakeholders, the answer will be much more pessimistic. Radical Collaboration is a “how to” guide for building effective collaboration in and outside the organization. Sustainability transformation is dependent on strong collaboration – not only within organizations but also with external stakeholders. Without it, building competitive advantages based on sustainability is impossible. Radical Collaboration is an important guide to taking collaboration seriously and putting it at the heart of the upskilling initiatives needed for sustainable business transformation. Florian Hoos, Professor of…

When Mattel released its ‘Chief Sustainability Officer’ Barbie recycled plastic doll last year, it was clear the role of CSO had gone mainstream. Sustainability has emerged as a strategic imperative for firms, driving the search for talent to meet new ambitions and regulatory pressures. With it, there’s a significant transformation – and growing importance – of the role of the CSO, fueling demand for the professionalization of this expanding role. Why is the CSO in the spotlight? Growing global challenges, such as climate change, resource depletion, and social inequality have forced businesses to re-evaluate their risks, opportunities, and impact on the world. They are also struggling to stay on top of changing regulations, investor demands for transparency, and employees seeking careers with “purpose”. Consequently, there’s a growing war for talent…

Never afraid to provoke, when asked about doing good in 1980, Margaret Thatcher replied: “No one would remember the Good Samaritan if he’d only had good intentions – he had money as well.” This comment resonates today as societal demands on businesses grow and grow. Just how much surplus does capitalism create that could then be deployed for the benefit of its stakeholders? For example, how do those amounts compare to the costs of attaining net zero or implementing the UN Sustainable Development Goals (SDGs)? Despite capitalism existing for millennia, there aren’t widely used economy-wide measures of corporate value creation – how much surplus value businesses deliver in the course of their operations, once all their costs are deducted. For sure, there are macroeconomic aggregates but their link to firm…

Working on ikebana as a team means relinquishing our desire to control, letting go of our ego, and existing in the present. Out of this process something beautiful can emerge, explains Mayuka Yamazaki Let flowers live. That’s the concept that lies at the heart of ikebana, the traditional art of Japanese flower arrangement. Every time you hold a flower in your hand, you think about how you can help it look as beautiful as possible and in harmony with the other flowers. “Think” may not be the right word, though. After years of practice, your body moves instinctively to cut the flower and place it in the vase, without even thinking. It is as if your body knows how to let the flower live before your head does. If your…

2007 The term “impact investing” is coined at a meeting hosted by the Rockefeller Foundation in Bellagio, Italy. 2007 First 82 companies obtain B Corp certification. 2009 The Global Impact Investing Network (GIIN) is launched as an independent non-profit organization to promote and support the development of the impact investing industry. 2010 The first Social Impact Bond (SIB) is launched in the UK to reduce reoffending rates among prisoners released from Peterborough prison. 2013 The first Global Impact Investing Rating System (GIIRS) ratings are issued to measure and compare the social and environmental performance of impact businesses and funds. 2015 The United Nations adopts the 2030 Agenda for Sustainable Development, which includes 17 Sustainable Development Goals (SDGs) as a universal framework for addressing global challenges. 2015-2016 The Paris Agreement on…

In my view In the early years of this century, the UK national postal service centralized and automated its financial reporting systems for thousands of post offices around the country, typically run by small, independent business owners, known as sub-postmasters. The project, supplied by Fujitsu, was called Horizon. After the roll-out, many of the sub-postmasters began reporting bugs in the system, often registering a significant but incorrect shortfall in takings. The system frequently failed to compute sums accurately. Someone who trained sub-postmasters on the system reported years later that he had reported this systemic error to his bosses, but the flaws were not corrected. Some postmasters even made up the accounting discrepancy from their own funds. Instead of acknowledging the possibility of incorrect data, between 2000 and 2013, senior Post…