Interview with Oslo panelists Cilia Holmes Indahl. Cilia participated in the Global Opportunity Panel in Oslo on 5th June 2015 and works as advisor on climate change and sustainability services for KPMG Norway.
What do you like about the Global Opportunity Network? What makes the project different from other initiatives?
There has been a lot of mapping of risks before and some have also vaguely identified business opportunities related to them. What is unique about this project is the survey in the Global Opportunity Report. In my mind, it creates a valuable set of data giving companies more knowledge on exactly where people believe in the different opportunities. The report states that it is a GPS for change makers – I really like that. It says: If you want to make a change and this is your cause, this is the place you should start the change.
The survey data makes the difference?
Exactly! My take-away from the Global Opportunity panel in Oslo was also that we were aligned in terms of which opportunities we considered as the most important. I think it is a common exercise to identify opportunities, but we do not know how businesses around the world will respond to it. The survey adds such insights and that is why I think that it is a unique element of the Global Opportunity report.
What inspires you to think in terms of opportunities instead of risks?
I am very motivated by the potential to create a better world. I think that all opportuneurs look to opportunities because we see that there is a potential to do things better.
What is opportunity leadership to you? What are the characteristics of a person that is able to identify opportunities and lead this change?
For me, an opportunity leader is a person that challenges the established realities of how we organize our society. That person works to build better systems and find sustainable solutions. It is difficult not to take for granted the reality that we live in and not to accept the status quo. Opportuneurs are able to design options for the future. They acknowledge the society, but are able to look beyond it. They ask: How can we get from now to where we need to be? How can we design what’s next into what’s now?
What was your best experience at the Oslo panel?
It was a moment when we shared our ideas. Everybody were determined to see the bigger picture. Instead of digging into one specific solution, everyone searched for answers to systemic problems. For example, when we talked about the global food crisis, we decided that the opportunity would have to be systemic, it had to be linked to agriculture, to distribution systems and help the consumer make better choices. We asked ourselves: How could we create an opportunity that affects the entire food system in a positive way?
I am very fond of designing for better default solutions. In the recently launched Sustainia 100 a new trend in business models is presented – incentivized circularity. It includes circular models that let their customers benefit from their return on investments. A company can become the preferred choice because it is producing a product cheaper by reusing materials for example, and then passing on a lower cost to the consumer. If we could design models that would make the preferred choice the sustainable one, then the choice could both be the best for society and the cheapest one. Change would happen much faster!
At the Oslo panel there was a consensus that a true global opportunity needs to include a business case. Do you think that business can change the world for the better?
Of course! Let me phrase it differently: I would not be working in business if I did not think that business could help us shift towards a more sustainable future. The reason why I chose to work with business rather than start in a NGO or go into politics is that I think that the momentum for sustainable societal change lies in the business sector. The more corporations we get onboard, the easier it will be for politicians to enforce regulations that support a sustainable future. I believe that a true opportunity for society is also an opportunity for business, because society is run by consumers. Consumers are becoming more and more aware of the challenges and they want to live according to their values.
Do you relate the risks that you worked with at the panel to your daily work?
Yes. Most businesses that work with sustainability are struggling to move from risk to opportunity. Our job as business consultants on sustainability is to help companies see the added benefits of looking to the opportunity side of sustainability.
Do you see a trend that sustainability should be connected to the core activities of a company?
I do. For my thesis I analyzed 400 business models for sustainability one of the success criteria I found was having a sustainable purpose that closely links to a company’s core business activities. It should make strategic sense for the company to solve the sustainable challenge it has its eyes on. This is the most effective way to succeed with sustainability, because it helps align sustainability with profitability. (For more information on the findings from Cilia’s thesis watch this video)
Can you name three best practices of companies that successfully work with sustainability opportunities?
The way we have looked at business up to this point is that there has to be winners and losers. That is why we focus on the risks – we deal with the risk of losing. But in the sustainable business models I identified a best practice that allowed companies to build business models where everybody wins. Those companies know the motives of their buyers, and all their stakeholders who are relevant for making their business model work. And they are able to give everybody a sense of understanding that they are winning by being part of the model. In other words, designing business models where everybody wins and therefore stay loyal to the company in the long term.
Another best practice is having a sustainable purpose, as we have already discussed. Successful companies are making their business model more robust by making their value proposition more aligned with the values and causes of their client. This often increase the interpreted value amongst clients of what they are receiving, and therefor makes it possible in some cases to take a higher price. But looking at sustainability as an opportunity and embedding it into one’s business model through a purpose can also save a company costs. At KPMG we work with a methodology called “True value”. We help companies take into account (internalize) the cost of externalities. Even though companies do not have to pay for their CO2 emissions right now we know that at one point in the future this is a very likely scenario. Internalizing it now to lower their emissions and change to more renewable energy sources will strengthening their earnings, and make them fit for the future. (See the tool explained here)
Last but not least, I would like to highlight the best practice of aligning sustainability with the profitability of the company. I think that one of the ways good business can conquer bad business is by making a profit. Sustainable business models should attract capital away from business models that are not good for society. Additionally, having a sustainable purpose is wasted if the company is not functioning financially and have the prospect of making a positive impact. For the same reason sustainability should also strengthen profits, because it would result in more money being allocated to the challenge the company aims to solve, and more profits as the company make progress in solving the sustainability problem they are targeting. Ultimately an upward positive spiral effect that both the company and society would benefit from.