business

15 June:Leaders walking the talk. Peace Index. And naming the problem.

Posted on June 15, 2020 Leave a Comment

The UN Global Compact turns 20 and opens its virtual forum today. One background document by executive search firm Russell Reynolds looks at “Leadership for the Decade of Action”. It recalls a 2019 UNGC/Accenture study showing that 92% of CEOs believe integrating sustainability is critical to business success but that only 48% are doing it. It points to a 2019 Russell Reynolds study analyzing 4000 role specifications across industries and countries showing that while 15% of them make reference to sustainability (up from 9% in 2015), only 4% actually have sustainability experience and mindset as a requirement for getting the job. These numbers tell us that there is a still work to do to walk the talk in the private sector. To complement these findings, Russell Reynolds conducted in-depth interviews with 55 CEOs and found that sustainability pioneers are 3 times more likely than the control group to have worked in two or more continents, are more than twice as likely to have had experience in two or more functions, and are more likely to have had experience in operations and supply chains. It finally argues that all sustainability pioneers in business have a “sustainable mindset”. That means that they display the following leadership attributes: multilevel systems thinking, stakeholder inclusion, disruptive innovation, and long-term activation – a lot of catchy words thankfully unpacked and exemplified in the report.

Since the beginning of the crisis, hundreds of CEOs have announced that they would share the pain with their employees and take salary cuts. Financial Times Fan Fei and Andrew Edgecliffe-Johnson analyzed – for 554 companies – how these salary cuts compared with returns from equity awards CEOs would be receiving this year. They show that these awards would far exceed the “solidarity” salary cuts as stocks continue to recover. That’s also because salaries only make a small portion of the income CEOs take home.

This graph is from the Institute for Economics and Peace’s ”Global Peace Index (GPI) 2020”. The index is made of 23 indicators and covers 99.7% of the world population. The report shows that global peacefulness has deteriorated 2.5% since 2008, calculates that the global violence price tag is $14.5 trillion dollars, says that COVID-19 adds more tension and uncertainty, and argues that civil unrest and environmental problems could further affect the situation in the future. The graph below shows the percentage changes for each GPI indicator from 2008 to 2020. 15 indicators have deteriorated. Two indicators significantly changed in opposite directions: UN peacekeeping funding improved while terrorism impact worsened.

My quote this week is from Chimamanda Ngozi Adichie on the Daily Show [1’18’’]: “Feminism is about justice for everyone but you have to name the problem. And the problem is that it is women who have been excluded. So, we need to call it what it is.” And Trevor Noah’s response: “In many ways that’s what people say about Black Lives Matter.”

29 March: People count on businesses to act. So what should they do?

Posted on March 29, 2020 Leave a Comment

The 2020 Edelman trust barometer – surveying 34,000 people in 28 countries – showed that 74% of people expect their CEOs to take the lead on change to address global issues. In the context of COVID-19, a follow up survey with 10,000 people in 10 countries re-affirms that people trust their employers to respond effectively and responsibly to the pandemic, and 78% want businesses to act to protect employees and local communities.

So what should businesses do? I asked 4 experts working closely with businesses in the context of the crisis: Peter Bakker, Lise Kingo, David Nabarro, and Anthony Renshaw. First, they pointed to businesses’ duty of care going beyond the health and safety of employees, to also secure employment continuity. Second, they highlighted the key role of businesses in providing medically-verified information to employees – important as employer communications is the most credible source of information about COVID-19. Third, they suggested that businesses find ways to support health systems. The World Business Council for Sustainable Development (WBCSD) lists such actions on its website, and the UN Global Compact calls on business leaders to support workers and communities.
Smaller local companies, providing employment to the majority of people around the globe, are the hardest impacted by the crisis. For WHO COVID-19 Special Envoy David Nabarro, all should support SMEs where governments might not provide direct stimulus package. UN Global Compact CEO Lise Kingo is working with global companies to keep the SMEs of their supply chains in business. For SOS International Medical Director Anthony Renshaw, local SMEs which are still open can contribute to the response by adjusting their practices such as defining specific shopping hours for the elderly, or their processes to manufacture supplies required by the health system. Looking forward, all interviewees noted the opportunity to rethink business models; reimagine the social contract of business with society; and move towards a model of integrated capitalism. And putting things further in perspective, WBCSD CEO Peter Bakker argued that this crisis was “a warning that the power of nature is stronger than any human constructs”.

For The Verge’s Casey Newton, who is usually quite critical, big techs’ response to COVID-19 has so far earned them brownie points. They have promoted high-quality information. They have offered money, supplies, and jobs. And this has put the big tech backlash on pause.

My quote this week is from NY Governor Cuomo’s 24 March briefing [35’26’’]: “And at the end of the day my friends, even if it is a long day, and this is a long day, love wins. Always. And it will win again through this virus.”

20 May 2018

Posted on May 20, 2018 Leave a Comment

Late Hans Rosling’s “Factfulness: Ten reasons we’re wrong about the world – and why things are better than you think” should be mandatory reading for anybody working in development. It is a fun and educating book. It uses anecdotes from Rosling’s eventful life to illustrate the absurdity of widespread development beliefs shaped by the media and activists. Because it is good storytelling, it sticks with you. It also infects the reader with Rosling’s passion for exploring data and taking the long view. So even if you think you have seen his bubble graphs or heard his monkey survey story one too many times, go and get yourself a copy.

McKinsey Global Institute’s “Notes from the AI frontiers” analyzes 400 applications of AI in 19 industries. It has useful maps of analytical techniques and AI potential per industry and functional areas. It shows that AI is mostly used in combination with traditional analytics: AI augments more often than it replaces. And it estimates the potential annual value creation of AI around $3.5-5.8 trillion with greatest promises in marketing, sales, supply chains and logistics.

I liked Iman Ghosh’s “A world of languages” and wished I had the time to merge its data with demographics to see what it would look like in 2030 and 2050. With Africa doubling its population by mid-century, the size of French will grow significantly, “making it the most-spoken language by 2050”. Wait. What? I need to share this with my kids as they start packing to come join me in France soon.

My quote this week is from Chobani CEO Hamdi Ulukaya: “We are entering a new era, when the center of gravity for social change has moved to the private sector. It’s business, not government, that is in the best position to lead today. It’s not government hiring refugees, it’s business. It’s not government cutting emissions, it’s business. It’s not government standing up to gun violence, it’s business. It’s not government that’s going to end inequality, or create opportunity. It’s business.”

The (missing) human dimension of the circular economy

Posted on September 29, 2017 Leave a Comment

Last Sunday, I attended a “working dinner” on the circular economy. It was held at the Residence of the Holy See Representative to the UN, Chaired by the Vatican Minister of Foreign Affairs, and sponsored by ING. The residence of the Vatican in NYC is extra-ordinary. It was built and donated by the first 20^thcentury mayor of the city: Hugh J Grant. It is the only NYC townhouse with a built-in chapel and a bullet proofed bedroom where 3 popes have slept.

I was intrigued by the interest of the Vatican in the circular economy. That’s because I had missed the reference in Pope Francis’ Laudato Si: “We have not yet managed to adopt a circular model of production capable of preserving resources for present and future generations, while limiting as much as possible the use of non-renewable resources, moderating their consumption, maximizing their efficient use, reusing and recycling them. A serious consideration of this issue would be one way of counteracting the throwaway culture which affects the entire planet, but it must be said that only limited progress has been made in this regard.” [Emphasis added]

The circular economy proposes a growth model decoupled from natural resources. This means a shift from a linear model that “takes, makes and disposes” to a circular model that “reduces, reuses, and recycles”. The concept was born in environmental economists circles. It is connected to other, more familiar, concepts such as the sharing economy, the green economy and sustainable development. It is presented as a response to co-existing trends that contribute to environmental degradation: the increasing resources scarcity and commodity price volatility; and the growth of population and middle-class consumers.

Accenture estimates that the circular economy could generate 4.5 trillion by 2030. The first World Circular Economy Forum was held this year. And more and more businesses, mostly European so far, are embracing the concept. This means big changes to their strategies: Unilever commits to 100% recyclable packaging by 2025, Philipps moves from selling light bulbs to selling lighting as a service, Michelin leasesand retreads tires, etc.

A key question at the Vatican-hosted dinner was about the impact of the circular economy on the poor. This matters because so far the conversation has mostly happened in rich countries and focused on the environmental dimension of the circular economy. Not much has been written on its human dimension. My main message during the dinner was that circular economy advocates should not consider human wellbeing as an ex-post issue only. Rather human wellbeing should be a core element of the model where human capital wastes are considered alongside natural resource wastes. Under this broader message, here are some ideas I put on the table:

The circular economy

Should seek to optimize all resources, including human resources. That would require pricing negative human externalities (eg inequalities) so that goods and services bear the full cost of their production and consumption;
Could make certain goods and services more accessible to the poor (sharing is cheaper than owning);
Could offer jobs opportunities to young “green” entrepreneurs provided they have the skills, finances, and technology.
Would require life-long learning systems.
Could help formalize informal economic activities, in particular when digital platforms are used to share goods and services.

In short, the circular economy concept is transforming big industries into service providers, being promoted by influential political and financial actors, but missing a fully-fledged human dimension that I, for one, would like to help shape.

15 September

Posted on September 15, 2017 Leave a Comment

The just-released Bill and Melinda Gates’ “The stories behind the data 2017” tracks 18 SDG data points on poverty, child and maternal mortality, stunting, vaccines, universal health coverage, sanitation and more. It is a quick and easy read with clear graphs and good stories about what works, accompanied by a cool video. It will be published every year until 2030. Complement or competition to the UN SDG monitoring report? The Gates report is a teaser for the Foundation’s Goalkeepers GA event, one of the three off-site foundation-led events I will be tracking next week to see who wins the race to fill the gap left by the Clinton Foundation. The other two are the WEF’s Sustainable Development Impact Summit andBloomberg’s Global Business Forum. What is your bet?

This week, Apple released its Iphone X. It uses Face ID, a facial recognition option to unlock the phone, make payments, and use third party apps. It is advertised as easy, fun and super secure. But reviews andonline conversations also point to the possible creepy side, eg law enforcement abuse. Last week’sEconomist had four articles on facial recognition, its growing market, and possible uses and abuses. Short and good reads on this topic that some of you said could have featured in our last Horizons. Indeed, facial biometrics has applications and implications for children and young people. Our innovation team explores its potential for detecting malnutrition. This article shows how a software combining AI and facial analysis could “improve the performance” of online courses by picking up when students daydream and quizzing them on what was taught then.

My graph this week is from Brady and al’s “Emotion shapes the diffusion of moralized content in social networks”. It analyzes 560,000 tweets on 3 polarizing topics (in the US) – gun control, climate change and same-sex marriage, to understand how social networks transmit emotions and shape morality. The findings: emotional tweets are contagious. Each moral-emotional word included in a tweet increases its diffusion by 20%. But this effect is much greater within like-minded groups than between. So beware, getting emotional on twitter feeds the echo-chamber.

My quote this week is from Mars CEO Grant Reid launching his $1 billion Sustainability Plan: “Data and connectivity are helping us get smarter about our impact every year. Today, climate science is clear and we understand the environmental and social challenges in our supply chain better than ever before. With this knowledge, it is clear that the scale of intervention needs to be much bolder – now is the time for business to reassess its role and responsibility in the face of the evidence.”

31 March 2017

Posted on March 31, 2017 Leave a Comment

I have not yet written about fiction books here. But here is an interesting trend: sales of dystopian novels are exploding. Orwell’s “1984” reached a 9,500 percent increase in sales in one week end of January. Rather than re-reading the classics, I started exploring those written for young people and finished M.T. Anderson’s “Feed”. It tells the story of two teenagers in a futuristic world ravaged by environmental degradation and driven by consumerism where news, games, advertisement, and chats feed people’s brains non-stop through electronic implants. As her parents decided to fight the feed, one of the main characters did not get her implant in the early days of her brain development and we observe the increasingly damaging consequences of this choice. The book, written 15 years ago before the smartphones and algorithm mania, feels surprisingly close to our “now” with its self-driving cars, occasional trips to the moon, hacking threats and over polluted air and water. It is a thought provoking read.

The Harvard Business Review ran a series on businesses and inequality this week. Interesting articles and powerful graphs, with two highlights for me. One, Nicholas Bloom’s “Corporations in the age of inequalities” calls for a shift of policymakers’ attention from gaps between rich and poor people, to gaps between high-paying and low-paying firms. He uses a growing body of evidence to show that wages gaps between companies is a huge driver of income inequality. And he argues that three trends widen this gap: “the rise of outsourcing, the adoption of IT, and the cumulative effects of winner-take-most competition”. Two, Melissa Kearney’s “Income inequality may harm upward mobility” illustrates how boys who grow up in poor homes are more likely to drop out of school if they live in places with high income inequalities than poor boys living in more equal ones. Her work shows that highly unequal environments lock young people, and especially boys, into “economic despair”.

My illustration this week is from Simon Maxwell’s “A new case should be made for aid. It rests on three legs“: 1. understand the problem; 2. match instruments to need; and 3. tell a story that convinces the public. Agreed. He then sorts out aid instruments according to public support and demonstrated effectiveness.

My quote this week is from Otherlab’s Mikell Taylor in “Cardboard gliders could revolutionize aid delivery in disaster zones“: “It’s a cross between a paper airplane and a pizza box. The plane lands right where it needs to be. You don’t want to have to account for a bunch of assumed [cargo drops] loss because the wind blew your parachutes into a lake.”