System Change Opportunity in the Corporate Sector
System change is by far the most important sustainability issue in the corporate sector. Climate change and virtually every other major environmental and social issue only can be resolved through systemic changes at the sector and overarching system levels. Companies proactively involved in system change are the true sustainability leaders. Like current sustainability leaders, they will attain many financial and competitive benefits. This article summarizes the system change opportunity in the corporate sector and how companies can capitalize on it.
Modern economic and political systems were developed from a reductionistic perspective that ignores much of reality. These systems unintentionally place business in conflict with society. Companies usually are required to put profits and shareholder returns ahead of the environment, customers, employees and all other aspects of society. Very generally speaking, businesses only can mitigate about 20 percent of tangible and intangible, short-term and long-term, negative environmental and social impacts in a profit-neutral or profit-enhancing manner. Beyond this point, costs usually go up. If companies continue down this path of voluntary corporate responsibility, they will put themselves out of business.
Flawed systems compel all companies, without exception, to degrade the environment and society. System change is about 80 percent of the sustainability problem and solution. But it gets relatively little attention compared to company change. Nearly all corporate sustainability strategies are focused on unilateral efforts to mitigate negative environmental and social impacts.