What’s at Stake for Sustainable Business in 2024

Transcription

David Stearns:
Welcome to BSR Insights, a series of conversations on emerging and cross-cutting business, economic and social issues. Drawing on BSR's expertise from more than three decades of leadership and sustainable business will help practitioners and decision-makers to navigate today's increasingly complex world. I'm your host, David Stearns.

We're joined today by Aron Cramer, President and CEO of BSR, who's just back from a week at the World Economic Forum in Davos. Aron's here today to share with us some of his insights and thoughts on some of the critical issues facing business in 2024. Well, thanks for joining us today, Aron.

Aron Cramer, President and CEO, BSR:
Great to be with you.

David Stearns:
In your opening blog of 2024, you outlined three important primary goals for the sustainable business community. You talked about the need to accelerate the shift to an inclusive, clean energy economy, the importance of ensuring that revolutionary new technologies are designed and deployed in the service of society, and creating more equitable societies and economies more broadly. With that in mind, you then explored a number of really important questions, which will impact the ability, and in some cases, the willingness of business to orient their strategies and activities in ways that will enable us to achieve these goals. So I'd like to explore some of those with you today. Starting with, you noted how nearly 2/3 of the world in 2024 will vote in a national election; more than ever before in history. You've observed that it's in the best interest of business to stand up for fair elections and the rule of law. I think most people would agree with that, but can you tell us what specifically can and should business be doing on that front?

Aron Cramer, President and CEO, BSR:
Yeah, so 2024 is an unprecedented year in human history in terms of the number of people who are voting. I think it's actually about half the world's population is living in places where elections are taking place. Most of them national, though the European Parliament elections are also very significant and the EU covers half a billion people.

First, I would say, what are the stakes? Well, the stakes are really high and a lot of people are paying attention. Just the other day, The Economist wrote this, "In the long run, the idea that corporate profits can be insulated from societal upheaval is a fantasy." That was written in the context of the United States, but I think it applies in a lot of other places as well, whether it's Mexico or Indonesia, European Union, India, et cetera. And so, the stakes are high for business. The stakes are also high for all of us as citizens to be sure.

What can business do? And first, I think it's important to recognize that for a lot of companies, and I heard this quite a lot from people in Davos, there's a high degree of caution. Companies are afraid of getting on the wrong side of a winner in an election, including in places where some candidates are making clear that they will not look kindly on people who don't support them. This is something that is true in many different parts of the world. But that said, there is a lot that business can be doing. Some things apply the same to all companies; you know support, whether it's vocal or more practical, support for simple voting rights. A lot of American companies are encouraging their employees to vote, giving people time off to be able to vote, reinforcing the importance of it, providing information about elections and so on. There are also legislative and regulatory questions having to do with the right to vote, and business ought to be able to support some of those things without taking a partisan position.

So, for companies that are skittish about that, there's still lots that can be done. There are lots of things that also are very industry-specific and particularly the tech sector because this is going to be a year where disinformation, misinformation, deepfakes have the potential to significantly disrupt elections. And the tech companies, many of the large tech companies are actively working on this. This was a topic that I was able to participate in many discussions on in Davos, in fact. And so there are other examples as well, but there are both cross-industry opportunities and industry specific opportunities.

David Stearns:
So you mentioned your participation recently at Davos with some of the business leaders from around the world and I guess I'm curious to hear; A re they aware of the stakes? What's at risk with these elections? And do you get any sense from your conversations in Switzerland that the companies are actually taking some of the steps that you've mentioned to prepare for this?

Aron Cramer, President and CEO, BSR:
There is a lot of awareness. There's very broad awareness. I'm not sure that action is following in a commensurate way, and there are multiple reasons for that. One is that, indeed companies are concerned about partisan politics and either taking a side or being seen to take a side. That's an issue. There's an issue around bandwidth. Companies are dealing with a lot of really fundamental questions right now. And so there's that. And then I think, you know, business leaders have a lot of different opinions about things. Sometimes they see the importance and the value of taking action here. Sometimes not so much. Based on what I know, this is a topic that has not yet gotten into the boardroom in as significant a way as it might. And so, I would say awareness, I would probably give a B+ or an A-. Action, I think, lags significantly behind and we're going to be taking some steps this year at BSR to try and create various forums where companies can come together to talk about what's at stake, what they can do, and how they might be able to collaborate.

David Stearns:
So related to that, if things were to go sideways and elections take place that don't seem to reflect a respect for the rule of law or the elections, the outcomes themselves are cast in a doubt, there are issues around the perceived fairness of the outcomes. Do you think that that can have impacts on other sustainability issues that we work on? Is it possible that there would be any spillover on international efforts around climate change, for example?

Aron Cramer, President and CEO, BSR:
Yeah, I mean, I think there are three ways the answer is yes. So, first of all, as I mentioned earlier, societal division is not good for business. I don't think anyone would say that January 6th was good for business by companies, whether headquartered in the United States or elsewhere. So, the type of disputed elections you're speaking to just create a lot of volatility, a lot of uncertainty, and a lot of social division. That is not very good.

The second is, even if elections do have where they have a clear outcome, the reality is that there are populist movements in many parts of the world. Take Argentina as one example, that are being elected and they do not believe that action on climate change, action on diversity are things that companies should focus on. So I think, it's important to call out, there is a political dimension to this where some political movements which are getting more traction are neutral at best and hostile at worst to important aspects of the just and sustainable business agenda.

The third way things get difficult is international cooperation is needed certainly on climate. And so if we have an environment where populism and nationalism take hold, where divided governments lead to indecisive governments, the kind of international cooperation that's needed to address climate change, to address nature, to figure out the common questions that all of us face with respect to migration, that focus on international governance, let alone the kinds of geopolitical challenges that the world is facing, we'll have division on a global scale and addressing global challenges by definition become significantly more difficult. These are all things that are bad for business and certainly bad for businesses that want to see progress on important sustainability questions.

David Stearns:
Certainly a lot for our members to chew on as we start to approach this important year and a lot to think about there. I want to come back to another item that was I'm sure hot on the agenda when you're in Davos, which is artificial intelligence and the impact of the rapid expansion of AI and other emerging technologies, which has really reignited the discussion and some of the debate around these emerging technologies and how they could potentially impact society, both positively and negatively. Can you share some of the highlights from your discussions that were taking place at Davos, whether it's on AI or other emerging technologies that were on the agenda?

Aron Cramer, President and CEO, BSR:
Yeah, I mean, if you walk down the promenade, which is the main drag in Davos, virtually every shop, every cafe, every restaurant is taken over during Davos week and heavily branded. You could easily conclude from seeing all these storefronts that this was an AI conference and not the World Economic Forum. It is, it was pretty dominant, frankly, on the agenda. And I have to say, it pushed things like climate change, like diversity, like economic equity, either off the agenda or down the agenda in Davos. And I think as important as AI and other new technologies are, that was extremely unfortunate.

What you see at Davos is what you see in a lot of places. There are Utopians who will say this is going to radically benefit us through great leaps forward on healthcare, on education, removing friction from commercial relationships and there is certainly truth to that. Equally so, there's the dystopian discussion and there is a decline in trust in large institutions in part because there's a lot of information floating around which happens in greater volume, at greater speed, and with a greater degree of being lifelike, for example, coming from artificial intelligence.

And then I think there's also a sense, which I share, that the commercial imperative to make AI a part of one's business is so strong that companies are maybe, again, moving fast and breaking things, and that is troubling. So, like any other technology, Brad Smith of Microsoft wrote a book a few years ago called Tools and Weapons. His basic argument, which is that all of our technological advances are both tools and weapons. You can say that about the automobile, about the airplane, et cetera, et cetera. And it's true with all of this.

David Stearns:
That's really insightful. And I think we've seen a lot of questions being posed around the need for smart regulations around artificial intelligence, along with the ways that business can exercise some self-restraint on its development and deployment. I'm wondering if you could offer a few thoughts on the ways that just as we would offer justice-sustainable business approaches to companies on topics like reducing emissions, how can a similar mindset, a similar approach on topics like artificial intelligence, other emerging technologies, help to encourage the development of AI in a way that is both positive and ameliorating some of the more negative potential impacts?

Aron Cramer, President and CEO, BSR:
Yeah, I mean, governance of these new technologies is a really complicated topic, and I think the technologies do not respect local or national jurisdictions. And so the question of who ought to be setting the rules is a structural question that's not easy to answer. We're already seeing divergence in different jurisdictions. There are people who believe that there will be a Western approach to AI and a Chinese approach to AI that could divide the world even though the technologies are developing globally. So that's a question. I think there is a pace of change question.

One of my favorite quotes is from Mark Twain, who apparently said, "A lie makes its way around the world before the truth puts on its pants." You can certainly say that AI is making its way around the world before regulation puts on its pants. Maybe that's torturing the analogy, but it's not clear that governments move at the pace of the technologies. And that's a real challenge, a lot of people are trying to deal with it. The Biden administration, the US is, the European Union certainly is, other jurisdictions as well.

And then I think the third question is, where does the expertise lie? There are people who argue that the world needs to think about AI the way it thought about nuclear weapons and try to come up with global agreements. And fair enough, the difference though is there's a very small number of nation states that can deploy nuclear weapons. You and I can deploy AI any day, and we're seeing the social media platforms where this is playing out and where disinformation is coming from and misinformation and deepfakes. They're fragmenting all the time. So, you can have the biggest players agree to a certain set of principles, and that is happening. There is a lot of progress on that, but there's probably someone creating a new platform today that could be a problem.

One of the things I learned in Davos that I frankly had not been fully aware of, is how much misinformation has infiltrated gaming platforms. We know that people under 30 get, and even younger, are on gaming platforms all the time. And there are apparently very concerted efforts to radicalize people inside those communities, inside those virtual communities. So, the point is that it's not only how do the regulations come, but to whom do they apply? Because we're not dealing with a small number of players. We're dealing with a large and continually mutating set of players. So, it's no small trick. I think we do need formal governmental regulation. We need collaboration between major jurisdictions, and we are also going to need some nimble collaborative platforms, many of which have been developed and continue to grow and try to get at it through those multiple sets of modalities.

David Stearns:
Well, thanks for that. And I would just say that I'd hate to leave this conversation feeling like I just emerged from an episode of Black Mirror in this sort of dystopian potential picture that you've painted, but let's change that. And before we say goodbye, let's try to go out on a more positive note. So, a final question for you. What's keeping you optimistic and giving you some sense of hope that we can emerge from 2024 on the other end in a better place than some of the, I don't want to say doomsday scenarios, but some of the more daunting challenges that you've laid out for us today? What gives you hope?

Aron Cramer, President and CEO, BSR:
Look, the reality is we are undeniably making progress in a lot of areas. I think with the benefit of a couple of months reflection, I think the agreement that came out of COP was probably as good as we could get. Is it fully sufficient? No, but it's probably as good as we could have gotten from 195 different countries. That's really positive.

Also on climate, the march of clean energy technologies, whether it's wind and solar or even things like direct air capture, they continue to advance. The costs are coming down. There's a lot of progress there.

I think the information ecosystem, we just talked about some of the problems, but I do think that increased transparency gives more people agency. It really both reflects and enables a more diverse and respect for diversity in all of our communities. I think that's very, very positive. And so, I think there are many reasons to be optimistic, and we need to think about the sweep of history and not just the daily headlines, because I think the daily headlines tend to drag us down when in fact, we can see a real progress that is expanding over time in a number of areas that are really, really important.

David Stearns:
Well, thank you for that, Aron. We appreciate it. We certainly look forward to hearing more of your insights as the year goes on and appreciate your time.

Aron Cramer, President and CEO, BSR:
Great to talk with you, David, as always.

David Stearns:
Thanks for listening. For more in-depth insights and guidance from BSR, please check out our website at bsr.org and be sure to follow us on LinkedIn.