Using Systems Thinking For Sustainable Business Model Governance Dr Nazia M Habib Mr Richard Jones Contact: nazia.habib@csip.com 1 Contact: Richard.jones@csip.com nazia.research@gmail.com (preferred)
Our Objective to Communicating Sustainability What are the opportunities to apply systems thinking to corporate governance of ESG? How can corporations generate and implement plans for change? What do investors want to know about these actions? How can corporate incentives be aligned? Make intangibles tangible assets? (Sunk, Scalable, Stranded, Synergy, but difficult to define and assess) Cambridge 2 Sustainable Investment Partners
Sustainability - a Wicked problem – high risk! Sustainability is the ability to continue a defined Characteristics of Wicked Problem behaviour indefinitely. 1. A wicked problem has no definitive formulation. 2. Wicked problems have no stopping rules (How do we know For more practical detail the behaviour you wish to when design is enough?) continue indefinitely must be defined. 3. Solutions to wicked problems are not true-or-false, but better or worse. 4. There is no immediate or ultimate test of a solution. For example: 5. • Every solution to a wicked problem is a one-shot trial. Every Environmental sustainability is the ability to maintain attempt counts significantly. rates of renewable resource harvest, pollution 6. You cannot identify a finite set of potential solutions. creation, and non-renewable resource depletion that 7. Every wicked problem is essentially unique. can be continued indefinitely. 8. Each can be considered to be a symptom of another problem. 9. The discrepancies (and causes themselves) can be explained • Economic sustainability is the ability to support a in numerous ways. 10. The planner has no right to be wrong. defined level of economic production indefinitely. (Rittel & Webber, 1973) • Social sustainability is the ability of a social system, such as a country, to function at a defined level of social well being indefinitely. Cambridge 3 Sustainable Investment Partners
Agenda 21: MDG funding to SDG funding and ++ Simply put- funding is needed to "internalize externalities SDGs USD 5-7T and adjust risk MDGs USD$50B perceptions” Cambridge 4 Sustainable Investment Partners
Leveraging networks …potential unlocked Sources to unlock potential investments in inter-connectivity: 1. Materials ( reduce Waste and Toxicity) 2. Transportation ( improve access) 3. Food and Energy ( increase affordability) Cambridge 5 Sustainable Investment Partners
… but only some issues are significant Cambridge Sustainable 6 Investment Partners
Systems Thinking is about Finding Opportunities Cambridge 8 Sustainable Investment Partners
Seeds of Change starts by asking right governance questions Understand the Need Sustainable investment Mutually Inclusivity “Sustainable development….vagueness is no longer a basis for consensus but a breeding ground for disagreement.’ Daly ( 1996) NEED to OWN Cambridge SUSTAINABILITY 10 Sustainable Investment Partners
Sustainable Investment Markers (SIMs) Cambridge Sustainable 11 Investment Icons made by monkik and vectors market from www.flaticon.com Partners
Reporting - Levels and Decision Outputs • Authentic (8-12) 1. Performance • Advanced (4-8) • Lagging (0-4) • Certain (8-12) 2. Confidence • Cautious (4-8) • Uncertain (0-4) • Positive (8-12) 3. Decision • Ponder (4-8) • Pause (0-4) Cambridge Sustainable 12 Investment Partners
Visualisation of Prioritisation - Decision Tool Analytical Aspects Revealed: Thresholds Colour = ESG ● Circle size = importance ● Trend analysis Intertemporal ● Intergenerational ● Red: Zone of concern - Pause, will further analysis really help? Green: Zone of opportunity - Proceed and secure sustainability White: Zone of Thinking - Ponder, what evidence is missing? Cambridge Sustainable 13 Investment Partners
Let’s explore We can host Interactive sessions for your team with our tool.. ☺ …just contact us! nazia.research@gmail.com Cambridge 14 Sustainable Investment Partners
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