A leading executive-turned-lecturer has told Budapest business leaders a new, sustainable business model is an inevitable consequence if companies want to thrive in the future.
“Leaders have a primary responsibility to ensure sustainable value creation in an era of major change,” Doreswamy Nandkishore (Nandu) said at a Business Council for Sustainable Development in Hungary business lunch that focused on sustainable lifestyles.
A former executive vice president for Nestlé SA, and currently executive fellow of strategy and entrepreneurship at London Business School, he was making his first business visit to Budapest at the invitation of the BCSDH.
We are living in an era of huge changes, where the survival of organizations depends on their capability to adapt, unlike the former giants Kodak and Sears, said Nandu. Where the average lifespan of an S&P 500 company was 90 years in 1920, today it is 15 years; companies must adapt, he insisted.
“But one thing cannot change: commitment to principles and values, as this is the basis of trust, and is not concrete, but is still the permanent and everlasting basis of the value of companies. Thus, creating sustainable value and building trust are the primary responsibilities of leaders,” he said.
Nandu argued that it is increasingly urgent for businesses and companies to act, and responsible managers need to prepare their companies for wider changes in business models. Recalling his childhood in India, or the way grandparents have always reused things, he said the answers for business are right in front of us, they just need to be applied differently.
“I am bemused by the concept that the circular economy is new. It is not new. We have known about it for a billion years,” he said, siting traditional farming as an example. “We are moving beyond CSR to sustainable value creation with a total life cycle approach that covers end of life issues [for products produced].”
Asked by the Budapest Business Journal if this means an end to the traditional Anglo-Saxon profit-driven model, Nando said sensible business leaders had to follow where society was heading.
“Consumers and therefore customers are more and more making choices based on the company behind the brands they buy. They demand better accountability, and commitment to sustainability, in addition to healthy offerings. This is already forcing companies to change the way they behave and operate. A commitment to sustainability now becomes as much a ‘basic rule of business’ as ‘following the law’. So, yes, managers and boards will have to question, reevaluate and understand the purpose of business and their role.”
Do new business models such as the circular and sharing economies offer particular opportunities to emerging economies such as Hungary? “This will be the way of doing business in all economies, going forward. The world is heavily interlinked, and unless we ALL change, the eco habitat seems unlikely to sustain given the loads we place on it.”
The BCSDH’s “For a Sustainable Future” prize was also presented at the lunch for the second time in three categories (Change Leader, Leading Women, and Business Solutions), and there was an introduction to the two-point recommendation for the business sector to promote sustainable lifestyles.
“According to a report by the United Nations, we only have 12 years left to stop climate change and step onto a path of sustainability. For this to happen, it is essential that sustainable lifestyles become more general. In promoting their uptake, companies have a clear role and responsibility. Fortunately, the commitment of companies to this goal is increasing both globally and on the domestic level too,” said Attila Chikán Jr., president of the BCSDH. The two-point recommendation which was put together by the council and the leaders of its member companies to help the business sector take the steps necessary for promoting the uptake of sustainable lifestyles.
The first suggestion is to change business models to make sustainable products and services competitive, while the second is to shift consumer demand towards sustainability through brands
More than 80 senior executives, civil and scientific experts took part in the preparation and wording of the recommendation. As a result, solutions for both the business sector and its stakeholders have been identified that can positively impact the sustainable lifestyles.
The BCSDH is the national partner organization of World Business Council for Sustainable Development. It was founded in 2007 and now has 82 corporate members. The council is a coalition of CEOs of companies that account for around 30% of Hungarian GDP. Its mission is to promote sustainable development among its members and other actors from the Hungarian economy, thereby generating new and innovative thinking that will improve their competitiveness and should ultimately contribute to promoting the sustainable development of the economy, quality of life and the preservation of environmental and natural resources. Its Action 2020 Hungary program is a platform that business can use to put forward their solutions to environmental and social challenges, as well as the business challenges facing our country. The Future Leaders Talent Program, another BCSDH program, aims to introduce the leaders of the future to the complex conceptual system of sustainability, and help them to integrate these considerations into their decision-making processes throughout their careers. More information, see: www.bcsdh.hu; www.action2020.hu
Irén Márta, managing director of BCSDH and member of the professional jury for the “For a Sustainable Future 2018” prize explained: “We established this complex prize with the purpose of recognizing and disseminating to a wide audience the activities of leaders and companies in the field of sustainability. The goal of the prize is to set an example, and moreover, to promote and increase the contribution of business to meeting the Sustainable Development Goals.” The winner of the Change Leader prize was Ferenc Molnár (of Ilcsi Szépítő Füvek), while the winners of the Leading Woman Prize were: Zdravka Demeter Bubalo, HR director, MOL Group; Anita Urbán, HR director, Grundfos; and Barbara Verő, Head of HR, Nestlé.The best Business Solution prize-winners were: Biofilter, for its circular approach in its digital switchover office program; Heineken, for its Plastic-free May compostable cup program; and MOL for its Limo car-sharing program.