Businesses have a profound opportunity to help generate positive impact at scale on complex global problems. Below we offer a systems-based perspective on what it might take.
Building shared understanding: Increase stakeholders’ ability to recognise different perspectives.
Deepening awareness of why some problems exist can reveal new opportunities for impact. However, getting to grips with the relationships, behaviours, and incentives is hard and messy. Yet building a shared understanding of market and system dynamics is essential for private sector organisations with an interest in problem-solving and opportunity-spotting.
In response to the threat of climate change and the transition to Net Zero for example, such work is often done well at the global level by academia, think tanks and institutes. For example, the International Panel on Climate Change (IPCC) works to examine the emerging scientific data on climate change and deepen the awareness of the nature of the threat. Similarly, the Royal Institute of International Affairs conducts research for policy makers considering more sustainable models of economic growth.
Yet local insights are also imperative. In this regard, representative bodies, trade associations and consumer groups are also able to provide insights into potential climate change related impacts. For example, farmers associations in Tanzania are able to represent the interests of smallholders in understanding the impact of shifts in agricultural or economic policy or variations in climate.
Securing Commitment: Align goals amongst those driving change.
Business has a vital role to play in establishing the shared commitment of stakeholders to tackle tough problems. Yet such work can be fraught with competing interests.
Take for example the challenge of global plastic consumption; a plastic manufacturer may seek to innovate new plastics, FMCG companies wants to sell more bottled drinks, consumers desire less plastic but more options, while environmental NGOs advocate for less plastic waste. These are not the same goals yet they are not mutually exclusive. Navigating a path to common ground and mutual benefit is extremely difficult.
Points of leverage can found at different levels, such as company CEOs responding to shareholder concerns in supporting the transition to sustainable packaging, or government policy shifting to new investments in recycling or waste collection. Multi-stakeholder platforms, such as the World Economic Forum, play an important role in helping divergent organisations to identify areas of common interest, interpreting different stakeholders’ terms of reference and aligning goals.
Changing the Dynamics: Create mutually reinforcing interventions that change incentives.
By coordinating interventions and targeting them at the way the system works, protagonists may be able to fundamentally change the dynamics. However, systems are resistant to change, and a coordinated combination of interventions may be needed to creating lasting change between the elements of a system. Strategies to consider include investment and resource allocation; policy; innovation; and, building human capacity.
Consider the World Business Council for Sustainable Development (WBCSD)’s work on the problem of food insecurity and nutrition. The organisation provides a space for the private sector to collaborate, innovate, co-fund and pilot sustainable development solutions and by engaging a critical mass of companies in a sector, the initiatives can reach a tipping point for change.
Enabling Coordination: Enhance formal and informal structures that enable stakeholders to work together.
The work of coordinating with diverse stakeholders can be onerous, particularly for businesses responding to demands for returns on investment. Yet efforts to build shared understanding, secure commitment, change dynamics are likely to be worth it in the longer term.
The case of oil exploration in Northern Kenya is salutary. The fragmented and rushed response from new players seeking to take advantage of the find quickly led to an escalation of conflict across the region. Painstaking work over following years to establish locally owned, inclusive and participatory mechanisms for engagement from populations as diverse as local pastoralists, created new foundations to address sensitive issues such as land access, water use and resource allocation.
Augmenting Learning: Address asymmetries of learning and information flow.
Investing in inclusive, adaptive learning mechanisms is a powerful approach for organisations seeking to harness new opportunities for tackling systems problems.
Understanding data and how data flows is critical for understanding any tough problem; carbon emissions, water usage, technology access, political participation, social equality, urbanisation, migrant flows, you name it; understanding what is or isn’t happening is key. Data, or information, asymmetry can also exacerbate inequality and exclusion; information is power. In response, we are witnessing an emerging global movement for transparency and disclosure.
Measuring the changes taking place in the world around us is an emerging practice that goes beyond monitoring, measurement or evaluation of projects, investments or activities. Organisations such as the World Economic Forum and the University of Wageningen are pioneering new approaches to understand the impact of efforts to tackle global systems challenges. Others are more targeted; for instance the Global Reporting Initiative has been established to strengthen Sustainability Reporting, while the World Benchmarking Alliance seeks to assess companies’ performance on the Sustainable Development Goals.