Ed Freeman, a well-respected University Professor at Darden, helped to kick-off CllimateCAP 2020 with a speech about “Finding Purpose and Managing Stakeholders” in business.
Freeman spoke about how the success of business as it relates to the world comes down to five key relationships:
1. Purpose and Profits
2. Stakeholders and Shareholders
3. Society and Markets
4. Humanity and Economics
5. Ethics and Business
He explained that because of the happenings in today’s world, such as climate change, business now requires its participants to take into account both how it can be profitable and successful for the long term, but also how it can rally behind a purpose beyond profits. Freeman used the example of red blood cells: saying that the purpose of business is to make profits is akin to stating that the purpose of life is to make red blood cells. Yes, red blood cells are essential, just as profit is essential. He proposes that “the purpose of business is usually determined by a passionate entrepreneur who is chasing a dream to change the world”.
Similarly, he went on to explain how business leaders today must think beyond shareholders and consider the stakeholders that rely on a company’s product or service. We must think beyond the stock markets and towards bettering society. We cannot throw aside humanity and ethics for the benefit of economics and business. This perspective is essential. More often today, companies are considering climate as a problem that not only affects their stakeholders and society, but one that affects business and profits. Action is ignited from both ends – from entrepreneurs who see purpose in climate action and business leaders who see economic risk in climate inaction.
Towards the end of the ClimateCAP Summit, I sat in a room with 50 other students asking five thought leaders* in sustainable agriculture where the opportunities still lie for young entrepreneurs who want to find that greater purpose. The white spaces they described were inspiring: increasing digital access to farmers, intensification of agriculture productivity abroad, soil and microbiome research, innovation for cow feed or methane produced by cows, cellular agriculture, food waste, and water usage. The more we asked and the more this panel spoke, the more it became clear that technology was indispensable in driving this change. When asked whether business had a place in agriculture alongside technological developments, all panelists were clear on one common theme:
Technology is certainly part of the answer, but the success of that answer is in the business solution. It is key to have business leaders work towards climate change solutions to successfully implement, market and progress technological solutions. Incorporating climate action purpose with profits is step one.
*Panelists were Amanda Bushell of The Context Network, Amy Hughes from the Environmental Defense Fund, Jack Ross from Beanstock, Kyle Teameyfrom Breakthrough Energy Ventures, and Annie Osborne from the Good Food Institute.