In episode three of Clarasys presents: Simply Sustainability, Dr Sarah Ivory joins Sam Maguire to discuss why sustainable business is important for a thriving society. Listen here or read on for an edited transcript.
Sam Maguire: Hi everyone. I’m delighted to say that I’m here with Dr. Sarah Ivory who is a lecturer at the University of Edinburgh Business School and Director of their Centre for Business, Climate Change and Sustainability. Sarah, it’s great to have you on the podcast today, I was hoping you could tell us a little bit about yourself and how you got into this field of Academia?
Dr Sarah Ivory: Absolutely. Well, I am the Director of our Centre for Business, Climate Change and Sustainability. I’m a lecturer at the business school.
Dr Sarah Ivory: But for the first 10 years of my career, I was actually in the private sector. I was in the biotech sector. I’m not a scientist, but as a business person in that sector. And I went off to do an MBA and I expected to go back into the biotech sector or perhaps finance in the biotech sector. But as part of my MBA, I did a course called strategic corporate social responsibility.
Dr Sarah Ivory: So strategic CSR, and I only really did it because it was being run over a weekend. So it meant I could get a whole course out of the way and have less courses that semester. But doing the course blew my mind and it actually made me really see that business could be very different in the world.
Dr Sarah Ivory: I always assumed business exists to make profit, that’s what they do, that’s why they exist. And this course just opened my eyes to a whole different position of business in society. And I really started to see how I could help contribute to that. And to that message. And so I segwayed into an academic career straight after my MBA and went on to do numerous other degrees and teaching, et cetera.
Sam Maguire: Fantastic. And was there anything particular in that course, which was the trigger or make you think differently and solve business in that different light?
Dr Sarah Ivory: I’d heard of CSR obviously before that course, but I thought CSR was tree planting and businesses being nice just because why not, and, it makes them look good.
Dr Sarah Ivory: Strategic CSR, as professor McElhaney taught that this was about good business and about good long-term business. So she made us see that this was not a nice tree planting exercise, et cetera, this is really integrated into the strategic core of business. And that’s what I study now: how we integrate these ideas into the strategic core. And when I started that, that was a very unusual thing to be studying. Now, of course, it is incredibly mainstream as we’ll talk about in this podcast.
Sam Maguire: Fantastic. And then as you mentioned, your lecturer on that course must be incredibly proud because you’ve gone on to propose that your own research around business existing support thriving society.
Sam Maguire: Could you talk us through that research, what you’ve done and what you think the main benefits would be if every business adopted a more purposeful mindset?
Why does business exist?
Dr Sarah Ivory: Yes. Sure. So when I’m teaching students, executives anyone really, I put forward two propositions, the first one is a business exists to make a profit and does so by producing goods and services. Or, business exists to produce goods and services. And in doing so makes a profit.
Dr Sarah Ivory: And I asked people to vote on which they agree with most and what I find and what is so interesting is that people sit in one, in one of the two camps. I get about 50% in both camps, but notably many people can’t imagine that the other camp exists. Some can’t imagine that their primary purpose could possibly not be making a profit and others can’t imagine that that could possibly be the only primary purpose of business. And so we have this disconnect, we have this problem with how people see things.
Dr Sarah Ivory: And then my final proposition to people is that I propose that actually, and this is my own view – business exists to support a thriving society. That’s what it’s there for. That’s what it does. It does that by producing goods and services and in doing that, it makes a profit. So none of these things have to be at odds with each other.
Dr Sarah Ivory: It’s not like I’m, anti-business, I’m not, anticapitalist, I’m not anti-profit. I’m a business school lecturer. But the reason and the way in which business interacts with society is the thing that I’m questioning.
Sam Maguire: Got it. That makes sense. And what are the main challenges that you have in terms of bringing people around to your way of thinking? Are there anything that stops people from adopting your approach, your mindset?
Critical thinking is important
Dr Sarah Ivory: It’s funny. I don’t see my job necessarily as preaching or bringing people around to my way of thinking. I see my job as bringing people to thinking.
Dr Sarah Ivory: I think one of the things we’ve lost in society a little bit is that critical thinking that ability to think for ourselves, we just take as read something that someone gives us.
Dr Sarah Ivory: So I don’t want to become part of that machine. I don’t want to say here’s what I believe. And therefore you have to believe it. I want to say here’s my view. Here are my reasons for it, here’s my evidence to support it. And I’d like you to make up your mind. And I would rather that than me being dogmatic and saying “you must believe that business exists for this reason”.
Dr Sarah Ivory: So I think that I see that as my role of kind of eliciting thinking, but I will say that 10 years ago, my job was to introduce people to this idea. And that was a hard job. Not with everyone, but with a big segment of my students and my executives. I’ll say that five years ago, my job was to not introduce it because people had been introduced. But my next job was to explain what it meant and what the implications were and why it was important. And I would say today, my job is to explain how to get it done. And in, a decades career that is a big shift from people saying, I don’t even know what you’re talking about to people saying, but why do we need to do it?
Dr Sarah Ivory: And now those two things being accepted and people saying, okay, but how. And so that is an amazing shift in such a short amount of time.
Sam Maguire: Absolutely. And we’ve seen the same when we work with clients at Clarasys the pace at which people are, one, understanding the nuances of sustainability, but also the rate that their ambition is accelerating is one both heartening, but also means that there’s a lot of space for, consultants to help with taking that ambition and making it happen.
Sam Maguire: In terms of making it happen, what do you think the major changes for businesses might be to adopt kind of a more purposeful way of operation, where they will just exist to aid society?
Leadership is key to sustainable business
Dr Sarah Ivory: Well, first of all, it’s tricky to make a broad statement and it depends on the business. And as a consultant, you’ll know that that’s true. The first thing you do as a consultant is you go in and you’d get to know the business. So it depends on the business. I don’t just mean what they do. I mean, who they are, how they act, what they believe.
Dr Sarah Ivory: So that is a very important aspect. So any comments I make now are very difficult to generalize. First of all, some of my actual research on scaling sustainability to the strategic core shows that leadership is key for two very important reasons. One is, leaders were key to ensuring that things didn’t get in the way of the sustainability professionals. So it wasn’t that the leader had to drive it themselves. They just had to clear obstacles out of the way. And the second thing that leaders were important for was to not put obstacles in the way themselves.
Dr Sarah Ivory: And so the first thing people look for when they are looking at whether to commit to a sustainability lead, your head of sustainability comes and says, we’re doing this. The first thing people look for to see if they’ll commit is whether the leader of the organization seems to be genuinely, authentically behind the initiative and not just behind it, because it’s a buzzword, but authentically behind it. And the second thing you look for is whether people understand the complexity because this is not an easy thing. If this was an easy thing, we would have solved it already. There are real complexities to how we make this happen.
Dr Sarah Ivory: We can’t change businesses in a way that means they fail and then go out of business, because actually, that would be the worst thing for sustainability. If we made changes that meant people went out of business then others won’t make changes. We don’t need to worry about that as much anymore because so much of the world is moving in this direction.
Dr Sarah Ivory: But it’s really important to think about that and about that transition. Equally, if we’re trying to engender what one of my executive clients calls a carbon army within his organization and they come with all these ideas and then they don’t see that the organization is acting on the ideas the organization has asked for.
Dr Sarah Ivory: Well, either they’ll get disenfranchised and just won’t bother, or they’ll leave to find an organization who is, so there’s that issue of pace. You don’t want to go fast enough that change leads us to failure of the organisation, but you also have to go fast enough to keep in line with those of whom are part of your organization.
Sam Maguire: Got it. That makes sense. And so you’ve talked about some of the risks of doing kind of the transition in the wrong way. What do you think are the risks are of not switching at all? So not moving to a more purposeful way of operating?
Encouragements to become a sustainable business
Dr Sarah Ivory: I’ll answer that in two ways. I don’t think that organizations should be thinking about the shift as “we have to do this, or it’s a risk to our business”. I would rather organizations think about the shift as in, we have to do this because we are part of society. So that’s this issue of our organization exists to contribute to a thriving society.
Dr Sarah Ivory: And that can mean a lot of different things and it really should mean a lot of different things. But if your organization is detracting from a thriving society, then that should be a very big warning bell. And either require an incredible shift or potentially the organization deciding to segway what they do entirely.
Dr Sarah Ivory: It’s very easy to forget that people like Nokia who at one point was a very dominant mobile phone brand started as a forestry company. Nokia was a forestry company.
Dr Sarah Ivory: Companies segway all the time, change, completely transform what they do. So those in the most damaging businesses and industries I would expect will be starting to think about that, that real serious, radical transformation. Most others are really looking at how they do the business they do. Because the business they do is contributing at least in some way to a thriving society. And then it’s important also that we think about what we mean by that because there are environmental issues absolutely. There are also social issues, geopolitical issues, digital equality issues and things like that. So it’s very easy to get stuck in “what are my greenhouse gas emissions” as if that’s solving the problem. But I will say that there are risks to not acting. It’s not that I don’t want people to think that and the risks are interesting actually, because again, it depends on the company, but one of the risks that really will go across all organizations is losing your staff. Losing your employees.
Dr Sarah Ivory: We are seeing more and more young people coming through our universities saying I want to contribute to an organization that actually means something to me, it aligns with my values. And increasingly organizations, companies that we work for a huge part of who we are as a person, we don’t leave at 5:00 PM anymore. We are still part of that organization.
Dr Sarah Ivory: I remember I did some executive education for a large organization that had had a very, I’m trying to be anonymous here, a very difficult time, legally and financially in the public eye a number of years ago, and anyone who worked for that organization felt the taint of that on them, even though they weren’t personally responsible, they felt the taint and we were running this climate change program for them.
Dr Sarah Ivory: And this staff member said it’s the first time I felt proud of working for this company in a very long time. And that sense of pride in being part of a thriving society, part of a solution to a crisis. I think that that is the greatest risk companies need to think about. Either not tapping into it or losing it as people find other organizations to work for.
Sam Maguire: Got it. That makes sense. And the business leaders that you have worked with for your research, do they tend to be more driven by the need to change from an opportunity perspective or from that personal drive to be proud of what they do, that legacy element?
What drives leaders
Dr Sarah Ivory: Personal drive, mostly the ones I work with. The difficulty is that that gets very trying. I mean, it’s only been in the last, what would we say, year, 18 months, maybe two years that this has really become kind of a mainstream approach to business. Before that, we’ve had some heads of sustainability who I remember, one of them described it as I’m banging my head up against the wall every day.
Dr Sarah Ivory: And he said every time I came up against a new CEO, because CEO’s change cycles happen, he’s like, I had to explain why again, and I just got sick of doing it. So I think that there is a huge personal drive, but it comes at a huge personal cost. And it is very difficult. I mean, even just anyone who’s been following any of the COP 26 things this year, it can get very demoralizing to be reading about all the things that could and probably will happen to the world and to how we live in the world.
Dr Sarah Ivory: And sort of imagine working with that day in day out, it can be a very difficult thing to do. So I think there is a lot of personal drive there, but we need to be careful and, protect our people who are working at the front line.
Sam Maguire: Absolutely. That makes perfect sense. You mentioned COP 26 there. We’re in the immediate aftermath of COP 26. I was wondering if you had any perspectives on the major priorities that businesses should have, and obviously, it depends on the type of business and the nature of their work, but any broad perspectives on the priorities that businesses should have following COP 26.
Priorities for business post COP26
Dr Sarah Ivory: Yeah, I mean, so I’ve just been working on and sent out a tweet today with my summary of COP 26:
Dr Sarah Ivory: COP 26 has been really interesting. And one of the problems is someone described it as an inkblot – how you see it depends on how you expected to have seen it, whether you see it as a success or a failure depends on your perspective on it.
Dr Sarah Ivory: I think that’s a really nice explanation. It was never going to be an amazing success. It was never going to be an amazing failure. The media kind of try and characterize things like that. It’s always good to be able to point to a success or a failure. It was always going to sit in the middle of that.
Dr Sarah Ivory: So I think we should be really proud and the negotiators themselves should be really proud of where we got to. We got an agreement and it’s very easy to critique the agreement, but we could be sitting here today saying we actually didn’t get to an agreement at all. And that would have been a real failure of COP.
Dr Sarah Ivory: So we got to an agreement. All the countries were willing to sign up to. The agreement, mentions the word, coal, it mentions the words fossil fuels, and that may seem obvious, but that is the first time it has ever done that. And that is remarkable that we really are honing in as we all knew, but the words saying that we all know where the culprits lie. You know, the fossil fuel subsidies, coal. So that’s exciting as well. But also the week before the real negotiations we had, the methane pledge, we had the deforestation pledge. We had the coal pledge with nations agreeing to phase out coal. So all these things are real positives in the move forward.
Dr Sarah Ivory: But for business, nothing much changed in the trajectory of what was happening anyway. And that’s fine. That’s a good thing. So business should continue to expect that there’ll be much more demand to see and transparency, to see their own contribution to the crisis. What are your own emissions? What are your own carbon emissions, methane emissions? What lobbying are you doing that may be detracting from a solution? and also businesses are always ready for, and many are leveraging, the opportunities that are coming from that and their contribution to the solution as well. So nothing’s really changed in that.
Dr Sarah Ivory: There is maybe a little bit more certainty, I would say for business and business loves certainty. It doesn’t matter what the certainty is. Businesses just want to be certain about what it’s gonna look like, what life can look like, and then they can plan around that. So I would say there’s a bit more certainty that we know fossil fuels are on their way out.
Dr Sarah Ivory: We’re not quite sure when, we’re not quite sure exactly where, and we’re not quite sure how, but there’s more certainty there. And I think there is a little bit more confidence now that governments will continue to get tighter measures. Will they get us to 1.5 degrees? I’m not sure, but the businesses themselves just should be happy and gratified, I guess, with the sense that we know that the policies will continue to support any businesses who are making strides in this area. So I think that’s an important thing for business to think about as well.
Sam Maguire: Got it. You mentioned there that greater policy changes are likely to come. We’re likely to see greater support for organizations that are making strides in this area. Is there anything that would be on your wishlist? That would help organizations that are trying to be more purposeful. Who are trying to move towards society in terms of policy change, either in the UK or your home country of Australia or on an international scale?
From a business perspective, things must change
Dr Sarah Ivory: The UK is in some ways and not always, but in some ways really far ahead on the issue. We’ve had the climate change committee for nearly a decade now, maybe more than a decade.
Dr Sarah Ivory: We’ve got the amazing climate change committees, reports and plans. We have really detailed plans about what needs to happen and when and how so that in itself is really world-leading and that’s something to be proud of. The UK is still investing in fossil fuels. It’s still investing in new fossil fuels, fossil fuels exploration, which is absolute madness.
Dr Sarah Ivory: So those sorts of things would be my wishlist to change from a business perspective. I don’t think businesses need that much government support on this, they’ll have consumer support. They’ll have other businesses support. Most of the banks and financial institutions will be demanding this if not proactively supporting those doing it.
Dr Sarah Ivory: So I don’t think that’s the issue. For me, we really need to look, and one of the things – the biggest failure, if you would like to call it that from COP 26 is probably the lack of discussion and interaction with the global south. And with the ways in which we need to channel financial flows to enable countries to leapfrog the technologies and the mistakes we’ve made in the west.
Dr Sarah Ivory: So not build the coal-fired power stations. Not have centralized electricity networks that rely on fossil fuels et cetera, et cetera. So, yeah, I can’t see that policy changes are going to be huge for business. There’ll be a lot of little ones don’t get me wrong. But I think that COP 26 was more of a kind of a country level.
Sam Maguire: What was really interesting that you mentioned there around the global south – I think, have you thought of much about, in your research, how you can kind of enable businesses to see society, not just in terms of their local area, but also in terms of the impact that their work has on the global society. So on citizens across the world, not just those that they can see and interact with on a daily basis.
Businesses need to consider their circle of influence
Dr Sarah Ivory: Yeah, look, it’s a really interesting question. And it goes to that issue of influence. So who do we influence? So I often draw three circles on a piece of paper. In the middle, you’ve got your circle of control. That’s the things you are in complete control of. The next circle is your circle of influence. That’s the things you can influence. And the final is your circle of concern. We spend a lot of our time in our circles of concern. There’s not much we can do about it, but we’re worried about it.
Dr Sarah Ivory: I’m worried about poverty, I’m worried about childhood numeracy, I’m worried about domestic violence. I’m worried about all these things. There’s not much I can do about them, but I choose two things in my circles of concern that I’m going to focus my profession on. And those are climate change and critical thinking at university education level. And so then I look at my circle of control and I see what I can control in relation to those things. Well, I can control what I eat. I’ve moved to a more plant-based diet. I can control what I drive and when I drive and whether I drive, I can control those things. That’s great.
Dr Sarah Ivory: And I do those things. The bigger impact I can have is always going to be in my circle of influence the middle one. I would encourage businesses to really think about their circle of influence. Who can they influence and how? They can’t control them.
Dr Sarah Ivory: But they can influence them. Who in their supply chain can they influence to change, to, to think, to help them understand and down their value chain, who, which customers, consumers can they influence. So I’m often on BBC and I’m asked this question, , what should individuals do to help with the climate crisis?
Dr Sarah Ivory: And I always answer. I don’t want to say eat less meat because if you’re running a Fortune 500 company, I kind of don’t care how much meat you eat. I care whether you’re using the influence you have in running this massive company to change the direction of climate change. Equally, if meat is a big part of your diet and you don’t have natural influence in other places – yes, I would like you to eat less meat. So actually looking at where you can influence the change most is really important. And I think we can get stuck in numbers and exact movements. A fantastic woman at the bank of England who ran a seminar made a really interesting point. And she said, imagine we are like the Titanic and we are heading towards the iceberg and we are debating how far right to turn or how far left to turn and exactly where we should end up, and because we’re debating that, we’re not turning at all and that’s what we’re doing. So we just need to shift away from the iceberg that is climate change and then as we start doing that, which we’re seeing, then we’ll get a better sense of exactly whether we need to shift more and more and more.
Dr Sarah Ivory: So I would encourage businesses to think about that influence that they can have in what they do in their main operations.
Sam Maguire: Perfect. That is a really great framework that we can finish on Sarah. And I just want to say, Dr. Ivory, thank you so much for your time today. It’s been hugely enlightening and we will hopefully be seeing a lot more of your work in the future as we start to tackle the climate crisis in earnest. Thank you.
Dr Sarah Ivory: Great! Thank you so much.
Sam Maguire: Thank you for listening to our Simply Sustainability podcast. We hope, you enjoyed it. For more information, please contact us at sustainability@clarasys.com.
To find out how our sustainability consulting can help you, get in touch. For more from Dr Sarah Ivory, check out her website or follow her on LinkedIn or Twitter,
