The last two years have made predictions seem to be exercises in futility. In fact, the dynamics reshaping our world are largely the product of underlying changes we already were fully aware of; none of this was entirely unexpected.
Looking ahead to 2022 then, we need not only to have a healthy dose of humility, but we need to also keep in mind what we know to be true and focus on the important ways those things will shape the year ahead, no matter what surprises might happen.
- Net zero needs to get real. The rise of net-zero commitments is one of the good news stories of the past two years. Every company that is remotely realistic knows that getting there requires some hard work, and tradeoffs. Progress on Scope 3, including logistics, represents one of the best opportunities for achieving the needed. Every company also should know that the risk of greenwashing claims is growing. A world increasingly disrupted by extreme weather, economic loss, and unequal impact today is impatient and on edge, and it will not accept net-zero commitments that don’t pay off until tomorrow.
- Climate action without social justice simply won’t work. It was clear at COP26 in Glasgow that climate action without climate justice is no longer credible—or strategic. Whether it is about a just transition, addressing loss and damage, or ensuring that the clean energy economy offers economic opportunities to all and protects human rights, companies cannot claim to have a comprehensive climate strategy without a climate justice strategy. In the year ahead, we will be working with more companies to help them develop climate action strategies that reduce emissions while enabling social progress.
- ESG has the attention of investors and regulators: let’s make the best use of that. 2020 saw the rise of ESG investing, 2021 saw signs of a backlash and claims of greenwashing. But the shift is real, and it is making an impact: any CFO would confirm this. And the rules of the game are changing, with both the EU Taxonomy and SEC climate disclosure rules, along with the ISSB Framework, to emerge with greater clarity in 2022. These mechanisms are of signal importance, but their credibility and ambition are not yet secure. Whether they advance is not in question; how they advance is crucial. In 2022, BSR will continue to advocate for comprehensive models that address a full range of issues material both to investors and wider society.
- Boards are redefining their roles. Survey after survey show that directors understand the business relevance of ESG and the need to steward companies in a socially useful way. Unfortunately, these surveys also typically reveal that many directors don’t feel equipped to make good on this aspect of their mandate. 2022 should be the year when this changes in a decisive manner. This involves three main points: diversifying boards, reorienting their mandates, and bolstering their knowledge base. BSR will be launching a new offering for boards and directors in the year ahead to enable faster progress.
- Business will continue to use its voice amidst “the great fragmentation” pulling our world apart. Any CEO wishing for times when the business voice on social issues is not needed will be sorely disappointed by what is to come. All signs point to continuing debates over contentious issues that are driving society apart: generational differences in mindset and priorities, tensions between China and the West, populist movements on the left and the right, and socially divisive information bubbles. All this is leading to “the great fragmentation,” which leaves business in a bind when other elements of society cannot function effectively. Business has a strong stake in social cohesion based on democratic values for shared human progress.
There are many more examples of this roiling turbulence, including many tech solutions, innovation, changing consumer preferences, democratic decline, and catalytic philanthropy. We will no doubt have more to say about this over the next 12 months.
We enter 2022 with more uncertainty than any of us would like to see. Omicron, let alone other variants to come, are bedeviling us. The perilous state of the Thwaites Glacier in the Antarctic threatens to accelerate sea level rise and reminds us that climate change has unleashed unprecedented volatility and risk. The drive for social justice remains very much unfinished, at a time when local and global divisions are plain to see. And there can be no doubt that this year also will produce its share of unexpected shocks and surprises.
BSR is celebrating our 30th anniversary in 2022. We are proud to be growing in many ways. First and foremost, we are here to advance the efforts of our member companies—now numbering more than 300 for the first time—who are seeking to transform their business models, operations, products, and global supply chains in truly innovative ways, working also with funders and civil society actors. Our team is also growing, and we will surpass 200 staff for the first time in 2022. And building on a more flexible staffing model, we now have “hubs” in Singapore, the UK, and Washington, DC, adding to the eight locations where we maintain offices. We are also expanding our expertise, with new offerings on Social Justice, Nature, and Governance, amongst others.
We are both excited by what lies ahead and aware that we are on the clock, with the need to act urgently, with purpose, clarity, and precision, to make this decisive decade one in which real achievements are delivered.