We either have a sustainable economy, or we have an unsustainable economy – there is no plan B!

Our final Network event of the year in London last week tackled two questions that currently challenge many of us:

“What exactly do people mean when they talk about ‘a sustainable economy?" 
and
“How are leading companies today turning sustainability risks into opportunities?” 

Both Aviva and the Technology Strategy Board approached Forum in 2010 with these questions and so, in collaboration with them, we set out to find answers by developing a Sustainable Economy Framework (SEF). The SEF provides a succinct but comprehensive model for sustainable economic development, spelling out the environmental boundaries, social and political foundations for a thriving society.

During the event, Neil Brown, Fund Manager at Aviva and Richard Miller, Head of Sustainability at Technology Strategy Board gave compelling accounts of how these factors are driving their businesses. I was genuinely heartened to hear that Aviva’s investment strategy is based on allocating capital to companies that are part of the sustainable development solution, not the problem. They reason: 

1. If you act against society, sooner or later, society will act against you;
2. Historically, many successful businesses have hidden or externalised costs to society and the environment;
3. In our information age, stakeholders are increasingly able to reveal true costs and then push them back onto corporations;
4. Markets continue to focus on the short term and underestimate the disparity between winners and losers;
5. By identifying the winners, you can outperform… andmake capitalism work better. Therefore Aviva weigh up how sustainable a company is, and how attractive the valuation is, before investing on this basis.

Both Aviva and the Technology Strategy Board are building sustainability into their decisions regardless of what is happening around them. The Technology Strategy Board are using the SEF to help them to spot whether or not a specific market they could support is likely to be sustainable in the long run: the closer it sits to the boundaries described by the Framework, the riskier it is, now or in the future. The further away it is, the lower the long-term market risk.

It was great to see participants at our event keen to apply the Framework to their businesses. They engaged strongly with the issues and relished the opportunity to talk to other people – not only from other teams in their own organisations but also from other businesses inside and outside their fields – to gain fresh perspectives.

As one of our speakers put it, the modern way of doing business isn’t very old. The Framework gives us the next set of things we need to understand to do business properly. Many of us are focused on the “how” – how to ensure sustainable outcomes through our work and our organisations; the SEF gives us a chance to step back and look at the “what”, the bigger picture that we need to aim for, especially regarding social issues.

I’ll finish on a quote from Aviva’s Neil Brown:“We get the capital markets we deserve”. We are all responsible for the economy because each of us is an investor in one way or another; therefore we can all do something to move towards a more sustainable economy.

Click here for more information about the Sustainable Economy Framework, or contact Nicky Conway if you’re interested in using it (for example using our Framework cards).

Click here for more information about the Forum Network and how your organisation can get access to events, toolkits, and projects like these.