Enter the Chief Stretch Officer

Get ready for the RATIO framework - 5 things that a truly sustainable business needs to track. John Elkington shares what this is about.

stretch officer
Reality, Ambition, Target, Incentives and Outcomes: ways to track a company's actual and ideal levels of environmental, social and governance performance. Image: Shutterstock

As my body hit the icy Norwegian water, my brain instantly switched into survival mode. It was late May and I was out on a small island with several leading sustainable business experts. The sea into which I had just dived was a scalp-splitting 10 degrees C and alive with jellyfish of various hues and sizes. Still, with former Greenpeace head Paul Gilding filming me from the dock, I felt I had to take the plunge.

Later, as I thawed, it struck me that members of the Global C-Suite, the top teams of the world’s 1,000 most powerful businesses, must also now take a similar plunge, adopting what we call tomorrow’s Stretch Agenda.

This is the title of what began life as a short report, flowing from a research program backed by the Generation Foundation, linked to Al Gore and David Blood’s firm Generation Investment Management. Later it showed strong inclinations to become a White Paper, complementing Generation’s new White Paper, Allocating Capital for Long-term Returns.

But then one of our team proposed attempting something totally new for us. Why not write a play, she challenged, a dramatization of an extraordinary (in several senses) board meeting?

So, in the spirit of adventure, we did.

Favorably reviewed by GreenBiz Executive Editor Joel Makower on May 20, the result is called The Stretch Agenda: Breakthrough in the Boardroom. And the response has been tremendous.

When we explained the approach to a senior vice president of one telecoms giant, for example, she promptly wondered if we could stage an adapted version of the play for her top team?

To begin with, however, we had no idea what the response would be. Our first launch event was the Bonn Summit on Global Transformation, where I did one of two TED-style kick-off presentations. The second was in Seoul, where I keynoted the UN Global Compact’s Leaders Summit on the post-2015 agenda. Both were encouraging, but then the third saw that icy dip.

A long-standing hero of mine has been Norwegian Jørgen Randers, co-author of 1972’s Limits to Growth study—which began to provide a statistical base for modern environmentalism. So imagine my delight when he invited me to contribute to his book, 2052, subtitled ‘A Global Forecast for the Next 40 Years,’ pitched at global leaders, where I wrote an essay on a stretch future for the military.

That led to an invitation from Per Espen Stoknes to contribute an essay to what Germans call a Festschift book, celebrating Jørgen’s seventieth birthday—and his decades of work on the sustainability front. This is titled Science-based Activism, with my contribution considering how scientists can strike a better balance between the rigorous protocols of science and the growing need to speak up on critical issues like climate change. This is a growing dilemma for people like James Hanson.

A copy of the Festschrift book was handed to Jørgen at a conference on Green Economics and Science-based Activism held at BI, the Oslo-based business school. Happily, the Volans concept of the Breakthrough Decade, from 2016 through to 2025, took center stage.

My theme, the need for the Global C-Suite to engage in new ways, resurfaced a week later when I took part in webinar hosted by the UN Global Compact, designed to help launch its new Board engagement program. Their aim is perfectly aligned: to encourage a growing number of corporate boards to stretch their horizons and ambitions toward long-term sustainability.

To capture our sense of what this will involve, we conjured Indra Mistry, a former investment banker who is a central figure in The Stretch Agenda. She is joining the company as a CSO—originally billed as a Chief Sustainability Officer, though she prefers ‘Chief Stretch Officer.’

After the Chair and CEO have spoken, she presents a 5-point framework which assumes that a truly sustainable business must track and improve the ratios between its actual and sustainable levels of environmental, social and governance performance.

The R stands for Reality, acknowledging that many boards and C-suites are insulated from critical aspects of emergent market realities. She recalls the film Matrix, where one pill keeps you in the world of illusion, another exposes the true reality. Once a top team has a better grip on what tomorrow’s bottom line demands of them, they must move to A, deciding on their level of Ambition. Greed may not be good, Mistry acknowledges, but ambition can be—and she points to Google X as an interesting example.

This, in turn, leads to the T, for Target setting. How can top teams set science-based targets that truly stretch the business over time? “Remarkably,” she notes, “few companies currently set their goals and targets in the context of global goals and planetary boundaries.” She spotlights the Future-Fit Business Benchmark as one possible tool.

Next comes I, for Incentives, both financial and non-financial, internal and external. She recalls that a 2013 UN Global Compact study found that only 8 per cent of 2,000 companies surveyed had linked executive remuneration to sustainability performance.

In relation to external incentives, a company may try to influence the policy and tax environments in which it operates to ensure more sustainable Outcomes, which is where the O comes in. Mistry notes that there are hugely valuable lessons to be learned from the new breed of impact investors about how to define, prioritize, track, measure and reward desired outcomes.

Finally—spoiler alert!—two Millennials invited into the meeting end up blowing a collective fuse. They throw the proverbial bucket of icy water. For them, the global pressure cooker pictured during the board meeting is the future they must live in. They want less talk, more action. We can’t wait to read the sequel.

John Elkington is co-founder and Executive Chairman of Volans. He also co-founded SustainAbility (where he is Honorary Chairman) and Environmental Data Services (ENDS). His latest book, The Breakthrough Challenge: 10 Ways to Connect Today’s Profits With Tomorrow’s Bottom Line, is co-authored with Jochen Zeitz and published by Jossey-Bass. May sees the launch of his latest report, The Stretch Agenda and a new online resource, The Breakthrough Forecast. He tweets as @volansjohn. 

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