Interview: “To be considered educated in the 21st century, sustainability is a basic requirement. If you’re the CEO of a company, you should be getting at least the very basic facts” says Connie Hedegaard, who was recently on the front line of sustainability’s fiercest battle.
Connie Hedegaard helped win the greatest battle for sustainability, first as a politician in Denmark and later as EU commissioner, representing Brussels at the UN Climate change talks. According to Hedegaard, knowing your Sustainable Development Goals (SDGs) is key for successful business leaders; she speaks from more than 20 years’ domestic and international policy experience. Watch Hedegaard’s best tips for investing in Global Goals in this interview for The Sustainian.
Leader of the Week,
Episode 04 – Connie Hedegaard
Hedegaard’s 5 Tips for SDG Profits
1. Learn your SDGs
Start by learning the 17 SDGs – once you know them, you’ll never want to go back to business as usual.
2. Set Targets and Timescales
See where you are when it comes to sustainability: set targets and timetables to align your business with SDGs.
3. Tackle Barriers Together
Work with political and business leaders to identify barriers and find solutions.
4. Don’t Be Late to the Game
The sooner you build sustainability in your business model, the more competitive you will be.
5. Get the Pricing Right
Price in the environmental and social cost of doing business to avoid being hit with negative profit margins.
What do an award-winning columnist, a legendary explorer and a leading CEO have in common? Connie Hedegaard: a politician who shares their vision for a market solution to the 2030 Global Goals.
Sustainia talked to three visionaries in earlier editions who all want politicians to spur corporate action for sustainability with the right incentives. Alarmed by the lagging UN Global Goals New York Times columnist Thomas Friedman wants new policy that leverages the profit motive; Unilever CEO Paul Polman needs rewards for social responsibility; while explorer Bertrand Piccard seeks actions that foster pioneering innovation. So we asked prominent politician, former EU Climate Action Commissioner, Connie Hedegaard what would she do? She shared her best advice for both policymakers and CEOs.
If you are treated as an economic fool for doing the right thing, you just won’t invest in the right thing!
Surveys show that over half of the private sector thinks responsibility for sustainability lies with government. But Hedegaard believes that achieving the Global Goals is impossible without corporate capital and know-how. The Danish visionary wants policymakers to boost investments with bigger rewards for sustainable solutions and higher costs for harmful practices. “If you are treated as an economic fool for doing the right thing, you just won’t invest in the right thing!” the former EU commissioner points out. The right incentives will help businesses choose the sustainable path to set targets and goals. Though many companies are overwhelmed by its seeming complexity, Hedegaard insists sustainability is not rocket science if you take some simple steps.
Learn your SDGs
Hedegaard believes you have to begin by learning your SDGs. She finds this practice an eye-opening experience for most companies. Once businesses begin to understand the Global Goals, they quickly realize there’s no going back to the old, harmful ways. She says, “To be considered educated in the 21st century, sustainability is a basic requirement. If you’re the CEO of a company, you should be getting at least the very basic facts. Once you have understood that… then you say, wow, we have to deviate from business as usual, we have to become faster at finding new solutions.”
Set targets and timescales
Hedegaard insists that sustainability belongs only in the C-suite. To get the ball rolling, CEOs should take stock of where they stand in relation to sustainability, then decide where they want to be against specific timescales. She says, “It’s crucial to set the direction with targets and clear timetables – when do we need to be at which point.” And, she adds, the right targets change business culture, get employees on board and turn the corporate ship around.
Tackle barriers together
Hedegaard believes sustainability works best when the right policy is bolstered by corporate partnerships. The former EU Commissioner gives Norway as an example. Their policy shift to move the oil and gas nation away from fossil fuels triggered a joint response from 17 sectors who wanted to stay competitive in a clean energy future. She explains that together they asked, “where are the barriers, which ones should be removed by policymakers… which ones should we remove ourselves? Where is there a need for new technologies, how can we create them?” From here, they came up with solutions. This year, Norway’s US$ 1 trillion sovereign wealth fund cut investments in major greenhouse gas emitters following a 2015 ban on holdings that are more than 30% dependent on coal.
Don’t be late to the game
Hedegaard warns that the risks of doing nothing are greater than the cost of business as usual. Though a growing number of shareholders are realizing that it makes business sense to do the right thing, she worries there are still many who are only interested in next quarter’s profits.
“I think more and more shareholders understand that it’s good for business to do the right thing; it’s not philanthropy. And honestly, for the shareholders who do not get this in time, I think they will understand that there is a huge reputational risk in continuing business as usual.” Her warning is supported by the 2017 Better Business, Better World report lays bare the growing risks as more and more governments price in the harmful cost with regulations. When social and environmental costs are considered, the study shows negative profit margins for the world’s raw materials industry.
Get the pricing right
Hedegaard’s top tip for companies’ long term success is to price in social and environmental costs before it’s too late. “Start to get the pricing right. From the very top to the very bottom, it is absolutely key, because you will not make that change through moralistic thinking… We will do it when it pays off. And the sooner we understand this, the better.” True cost is a win-win for both business and the environment, she points out.
Connie Hedegaard’s formula for CEO success in the 21st century: start learning your SDGs today, figure out where you stand, get the pricing right and work with others to find solutions. But whatever you do, don’t be late to the game!
Biography
Connie Hedegaard has been at the forefront of climate strategy on the international stage and in her native Denmark. She represented the EU at the UN Climate change talks as Commissioner for Climate Action (2010-2014). Prior to that, Hedegaard served as Danish Environmental Minister in 2004-2007 and then as Minister for Climate and Energy (2007-2009). She became the youngest MP in 1984, but left politics in 1990 to pursue a 14 year journalism career. Hedegaard remains a climate champion as leader of various organizations and a member on major corporate Boards.