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SUSTAINABILITY 2030 ECONOMIC MODEL
There are dangers as well as opportunities...
of greenwashing...of misaligned tax and
incentive regimes
Building sustainable markets requires change
in three main areas: a shift in corporate business
models, a reoriented and mobilized financial
system and an enabling environment that promotes
regulation and incentivizes action. Already, we see
change. Today, global estimates suggest the market
for sustainable household appliances, reflecting
consumer demand, is $546 billion and growing.
As another example, Boston Consulting Group
estimates $23 trillion of assets under management
worldwide are in funds focused on environmental,
social and governance criteria.
But there are dangers as well as opportunities—
dangers of greenwashing, dangers of misaligned
tax and incentive regimes, danger the plethora
of sustainability initiatives fail to deliver scale or
critical mass.
As companies, we must move beyond corporate
social responsibility as a business add-on (and
to be fair an increasing number are doing this)
to mainstream, transforming businesses to align
strategy, structure and other activities to ensure
long-term stakeholder value in addition to
financial returns. The lack of universal measures
to transparently define goals and assess progress is
a concrete challenge. Global standards, backed by
regulators, will be game changers.
We also need a financial system fit for purpose.
We must address flawed pricing systems in capital
markets that result in relentless allocation of capital
to short-term, unsustainable uses. We need financial
regulation and reporting that integrates sustainability
with global standards and mandatory disclosure.
Finally, we must recognize that what
governments do and don’t do is critical. Incentives
can attract or repel investment, taxes can favour or
Caroline Anstey, Senior
Adviser, Sustainable Markets,
World Economic Forum
suppress energy choices, and information, such as in
food or product labelling, can win or lose customers.
We need to steer towards sustainable stakeholder
capitalism. A good first step would be to end perverse
subsidies in agricultural, fisheries and fossil fuels.
Consumers have power, too, to persuade
boardrooms and cabinets to rethink policies and reexamine
bottom lines. Controlling an estimated 60%
of global GDP, citizens and consumers can change the
market. We see it happening already.
The time is right. But we will only seize it if we
recognize the choice we face: to continue on our
current path or to shift to a more sustainable one.
This choice brings immense opportunity. To put
people and planet at the heart of global value
creation. To create new markets and technologies.
To explore moonshot innovation and disruptive
solutions for our most intractable challenges. To
develop new partnership models that deliver more
rapid and sustainable results. And to ensure human
aspiration can be sustained for millennia to come. We
need to make that choice now.
About the author: Caroline Anstey is a Senior Advisor
at the World Economic Forum and the Inter‐American
Development Bank. She is a Senior Fellow at
the Results for Development Institute. She was
previously Chief Operating Officer at the Open Society
Foundations; Group Managing Director at UBS AG;
and Managing Director at the World Bank.
The views expressed in this article are those of the
author alone and not the World Economic Forum.
This article appears courtesy of the World Economic
Forum, and was first published online at www.
weforum.org/agenda/2019/09/how-to-make-marketsmore-sustainable/
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