Decarbonising economy can drive growth in downturn, says Wendy Woods


To satisfy a growing demographic of socially minded consumers and businesses, business models will require innovation in sustainability and inclusion, says Wendy Woods, global leader for social impact practice at Boston Consulting Global (BCG). Woods says that in many situations, being more sustainable also lowers cost. Edited excerpts of an interview with Anjali Venugopalan.

What are the future innovations when it comes to sustainability and talent?

Far-sighted leaders will enrich decision-making by hiring staff with non-traditional business skills — people capable in systems thinking, anthropology, social dynamics, behavioural economics, sustainability and development policy. They will give organisations purpose, which talent prizes. Those workers will become part of agile teams that conceive innovative operating models optimised for both operational effectiveness and societal benefit. Leaders will think beyond designing for efficiency and thoughtfully engineer in redundancy, diversity and flexibility for more resilience and adaptability.

What innovations are required in sustainability and the business benefit of doing good?

To satisfy a growing demographic of socially minded consumers and businesses… business models will need to be transformed to incorporate a broader set of stakeholders. You can seek premium pricing by engaging with customers on a product’s wider value and their involvement in bigger change. Leaders need to think beyond quarterly financial results and change what is ‘valued’… compete by adding new dimensions through environmental sustainability, economic inclusion and ethical content. For this, we need radical business model innovation to enable circular economies for precious resources, to provide assets that are shared rather than owned.


Where is sustainable finance moving towards?

Globally, it is $1in every $3 in ESG-type (environmental, social and governance) companies. This is more in Europe and the US, and less in places like Asia. We see this growing for two reasons — reduction in risk and growth of opportunity. Investors are realising that companies’ exposure to social and environmental issues is incredibly significant. Leaders will not ignore environmental and social risks or mobilise government to block change — they will build coalitions for collective action within and outside industry to find and scale new solutions.

Is there a pushback to doing business the sustainable way when you have a tough economic scenario?

No, that doesn’t have to be. In many situations, being more sustainable also lowers cost. We have worked with consumer goods companies on reducing the volatility of supply, reducing resource use and reducing loss and waste in the supply chain that contributes significantly to climate change. All these bring down costs.

What about emerging markets like India where there are a lot of other pressures on businesses and government?

The positive news that should make both business and government comfortable is that you can grow the economy while decarbonising… but it’s not an equal field. The government needs to create incentives, given that there will be winners and losers. We did a modelling extension on what it would take to decarbonise India and other countries. Depending on the country, you can decarbonise 80-90% of the economy and limit global warming to 1.5-2 degrees Celsius with existing technology. Especially in a country like India, where not much has been done on sustainability and there’s more room for improvement. The rest 10% will require technological innovation.

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