Rewiring the Future
PART 1: NETWORKS AND SUSTAINABLE GROWTH
10-12 MINUTE READ. PUBLISHED 2 JUNE 2023. UPDATED 25 JUL 2024.
CREATIVE COMMONS CC BY ELECTRO STRATEGY STUDIO. WRITTEN BY ADRIAN JARVIS.
TL;DR There is a new generation of enterprises that recognise the importance of networks and collaboration to achieve more sustainable growth. Their journey starts with recognising the need for change, which encourages shared ways to create value, with the ultimate goal of building a Net Zero Society by 2050.
COLLABORATION AND NETWORK PARTICIPATION.
In part 1, we explore ‘why’ an enterprise should increase its participation in networks, and the stages of their journey as we approach 2030/50.
The key imperatives aim to be relevant to any category and size of business; from consumer goods to engineering, and from start-ups to multinationals:
COLLABORATION AND OPEN CULTURES that encourage new value creation and positive progress to be more sustainable.
PARTICIPATION IN NETWORKS where groups and organisations share knowledge, explore new ideas, and build capabilities.
SUSTAINABLE GROWTH by lowering costs, reducing impact, transforming value chains, and realising a regenerative future.
In part 2, we look at ‘how’ to rewire the enterprise; from rethinking goals and designing connected brands, to circular products and smarter technologies.
Jump to a list of resources for sustainability platforms and initiatives.
BUSINESS AS USUAL?
Visions of our future have long played out like a dystopian thriller — global warming, rising sea levels, extreme weather, displacement. Images of oceans filled with plastic, and millions of acres of rainforest cleared. Newsreels of economic shocks, war, black swan events. End of times.
And we’ve decided our position on climate change: who are the heroes, naive dreamers, and bad actors. At each end of the spectrum, it’s a conspiracy to take away our jobs and freedom — or beyond a tipping point, where only dismantling capitalism will save us.
In boardrooms, there’s a legacy of ambivalence and climate-incompetence: from an agenda that we really don’t have to do anything. Certainly, not right now, because sustainability targets are flexible, especially against more pressing issues.
Anyway, we will have the miracle technology to build a beautiful, bionic planet: renewables, carbon capture, reforestation, sustainable materials, hydrogen-powered vehicles, vertical farming, smart cities in the desert…
So let’s kick the ball from 2030 to 2040. There will still be a decade to sort it out. Until then, we only need to pretend to be paying attention.
NETWORKS OF OPPORTUNITY.
From this chaos and uncertainty, there is a positive alternative to degrowth and greenwashing; the next generation of enterprises that put connectivity and collaboration at the heart of business model innovation.
Collaborative networks and sustainable practices are not only crucial for addressing global challenges but also present enormous opportunities for innovation and market development. Paul Polman, WEF Davos 2015.
The race to Net Zero and the associated potential of sustainable growth require new ways of doing business; building networks of partners that can help provide the thinking, business case and capabilities to reshape value chains.
Growth in demand for the new green goods and services create an opportunity worth $10.3 trillion to 2050 global GDP — equivalent to 5.2% of global GDP in that year. Oxford Economics, 2022
The UN’s Sustainable Development Goal SDG 17: Partnerships For The Goals highlights the importance of action networks to achieve sustainable development. Promoting partnerships that help different groups and organisations to collaborate, share resources, and learn from each other.
By working with credible partners to embrace sustainability, consumer brands can increase their intangible value, create superior circular design and open up opportunities with new business models. Forbes Business Development Council, 2023
ECOSYSTEMS AND NETWORKS.
The terms ‘ecosystems’ and ‘networks’ are borrowed from nature and hunting, and are often used interchangeably. However, business ecosystems define all the parties that create a market; from customers, competitors, and suppliers to communities, governments and NGOs. Ecosystems are undergoing constant change because of global dynamics.
Networks are the connections and interactions within an ecosystem; such as value chains, trading platforms, collaborations, and consortiums. Networks tend to have common goals and provide a range of benefits; from practical needs such as capacity and specialist knowledge, to performance drivers such as agility and resilience.
As companies around the world remake their business models to advance their sustainability and boost their business advantage, many are finding that they need to drive change beyond the boundaries of their business. Creating changes in the wider system in which a company operates demands collective action. BCG, 2022
When a major company does change, such as Walmart or Unilever, it can influence what other companies are doing — because companies’ leaders copy how their competitors respond to the pressures posed by partners and relevant supply chains. Cambridge Press, 2020
WHAT DEFINES AN ENTERPRISE AS ‘NETWORKED’?
Networked Enterprises are commercial organisations that leverage networks and technology to achieve their goals; creating value, while adopting sustainable practices.
Networked Enterprises recognise that the solutions to our biggest challenges are distributed and interconnected. They become ‘networked’ when they create connections and partnerships that improve both their sustainability and longer-term commercial viability.
CASE STUDY: LEGO Group actively participates in networks to establish them as a global leader in sustainable transformation. Their partnership with the Ellen MacArthur Foundation has promoted circularity across the business.
Collaborations with WWF’s Bioplastic Feedstock Alliance have helped ensure choices effectively reduce carbon. Successful pilots led to the licensing of thermoplastics like AirCarbon. In March 2024, LEGO signed a long-term deal for Climeworks’ direct air capture carbon removal technology in an effort to reach net-zero emissions by 2050.
Platforms like LEGO Ideas and open-innovation programs actively reward community involvement. And a commitment to sustainable design has led to LEGO campuses and factories getting Gold-level LEED certification.
WHAT ARE THE BRAND ‘SHIFTS’ FROM NETWORK PARTICIPATION?
To kickstart the journey, there will need to be a recognition of the strategic role of networks and a clear vision for collaboration; which is often challenged by leaders who are competitive by nature, with a historic refusal to act on shareholder ESG proposals.
How we organise has always been interwoven with how we perceive ourselves. Our prevalent models of organisation are heavily designed with a bias to self-reinforcing ideas of humans as separate and self-interested individuals, and our systems designed with an emphasis to stratify and control. Dark Matter Labs, 2020
Collaboration through active participation in networks aims to drive sustainable transformation, and improve the resilience of the wider ecosystems. There are three key ‘shifts’, each advancing the role of networks in sustainable growth.
You may also like to read BRAND SHIFT 2050 — A Manifesto For a Net Zero Society (opens in a new window) which is a call to action for brands to be more sustainable, breaking these shifts down into more specific substages and initiatives.
Impacting now.
SHIFT 1: Sustainable CHANGE and Renewables.
Enterprises recognise the need for transformation, joining schemes that actively focus on renewable energy and reducing carbon, GHG and pollution.
Membership pervasive by 2030.
SHIFT 2: Collective Action for new value Ecosystems.
Enterprises join forces to collaborate across sectors and industries. Supporting a global culture of collective responsibility.
The Circular Economy 100 (CE100)
Accelerating between 2040 and 2050.
SHIFT 3: TRANSFORM to BUILD A Net Zero Society.
Collective action starts to transcend borders and industries. Widespread adoption of sustainable practices, technologies, and policies.
SHIFT 1: SUSTAINABLE CHANGE AND RENEWABLES.
Network participation is likely to start from a narrow focus; setting science-based targets to reduce greenhouse gases and the transition to renewable energy. This is often driven by cost-reduction, risk management and regulation on carbon; providing the essential foundations for sustainable growth.
CASE STUDY: The Global Lighthouse Network (GLN) is a collaboration between the World Economic Forum (WEF), McKinsey and the C-Level of leading industrial enterprises. GLN’s goal is to drive the adoption of Industry 4.0 technologies to transform factories, value chains and business models.
The network recognises organisations that serve as "lighthouses" (153 by Oct 2023) for successfully improving their competitiveness, sustainability, and resilience. In September 2021, the network introduced a new designation of Sustainability Lighthouse.
CASE STUDY: Apple partnered with nine companies, among them Fujitsu, IKEA, Microsoft, Patagonia and Sony, to formally encourage the Japanese government to promote corporate renewable energy. In addition, Apple promotes the creation of a renewable energy credit market in China, as part of the Green Electricity Consumption Cooperative (GECCO).
SHIFT 2: COLLECTIVE ACTION FOR NEW VALUE ECOSYSTEMS.
Networks are starting to be built across industries and categories to establish more sustainable enterprise; from certified practices to transparent supply-chains. As enterprises build their network participation, there will need to an associated investment in sustainable transformation.
CASE STUDY: Networks have enabled IKEA Group to create new sustainable value chains, and achieve double-digit annual growth. Engaging stakeholders through the People and Planet strategy which addresses social, environmental and workplace practices.
With goals to be 100% circular with zero waste by 2030, a range of industrial partnerships enable more reuse and recycling. Collaboration with The Forest Stewardship Council promotes responsible sourcing. Working with multimodal transport buyers has decreased the use of fossil fuels. Space10 provides a hub for open innovation to explore a range of ‘regenerative futures’ beyond new products.
To build trust and accountability between network participants, certification like B Corp and ISO 14001 go beyond commitments to track progress on carbon, into a range of business functions from product development to post-distribution. While Fairtrade International and the Rainforest Alliance have driven preference in food & beverage, other sectors such as apparel or consumer electronics have significant potential for progress.
The biggest problem here is that 95% of our emissions come from our supply chain, and we are a minor player on this stage. We produce in shared factories, often alongside much larger brands. So, we’ve had to innovate. We are developing an “insetting” approach in our supply chain by setting up a joint funding mechanism where other smaller brands can partner with us to invest in “greening” the factories in exchange for carbon credits. Patagonia, 2021
SHIFT 3: TRANSFORMATION TO BUILD A NET ZERO SOCIETY.
Although 'Net Zero Society' has yet to be precisely defined, it could be a world committed to regenerative practices, that builds sustainability and resilience into industrial activity. And despite a positive shift towards limiting climate change, we will still face the challenge of bad actors and intransigent holdouts.
The path to net zero will be affected by a wide range of societal factors that could be tracked as part of planning for net zero, including income distribution, sectoral mix in the economy, adoption of digital technologies, the level of urban versus rural living, and levels of cohesion between different social groups. Foresight Project, 2022
So as we look towards 2050, our path to a Net Zero society will be shaped by networks-of-networks. Driving the systemic change required to effectively transform our carbon economy — connections, capabilities and collective effort.
RESOURCES.
Sustainability platforms and initiatives
The last decade has seen the rise of technology-driven sustainability platforms that connect people — to share knowledge, collaborate, and take collective action.
Here is a selection, as a starting point for finding networks that are driving change:
GLOBAL POLICY NETWORKS: United Nations Global Compact, World Economic Forum, Intergovernmental Panel on Climate Change (IPCC), Enterprise Europe Network, C40 Cities, CircuLaw
GLOBAL KNOWLEDGE PLATFORMS: TED Talks, AI for Good Global Summit, IDEO U For Teams, The School of Social Justice
INDUSTRY SPECIFIC: TechZero, Design Declares, Stop Killer Robots, Sustainable Agriculture Initiative, Consumer Goods Forum (SSCI), Sustainable Development Solutions Network, Abillion and Green Queen Media
OPEN SOURCE COMMUNITIES: Open Sustainability Technology, Climate Action Tech, Green Software Engineering
SOCIAL IMPACT NETWORKS: Catalyst 2030, Change.org, B Corp Lab, Social Venture Circle, The International Alumni Center (IAC Berlin)
PRACTICE COMMUNITIES: LinkedIn; The Ocean Clean-Up, ESG Investing, IoT Professionals
CAMPAIGNING: Extinction Rebellion, The Climate Coalition, Friends of the Earth Business Partnerships
Jump back to the start of this article?
NEXT, How TO REWIRE THE ENTERPRISE…
In Part 2, we look at ‘how’ to rewire the enterprise; exploring the features and challenges that will drive change, and win in markets facing an uncertain future.
This article was written by Adrian Jarvis, who founded Electro, an independent strategy studio based in London. He has 25 years experience of working with enterprises of all sizes. The concepts discussed here are highly scalable from start-ups to multinationals, across a range of categories.