Part 2: Professor Concepción Galdón, Director of the IE Center for Social Innovation and Sustainability, rounds off the interview with José Luis Blasco, Global Head of Sustainability at Acciona,with a focus onthe need for employees and firms to see how sustainability is essential and how it can positively transform their business, society, and the Planet.
Sustainability Transition: Getting to the essentials: an interview with José Luis Blasco by Concepción Galdón. With kind acknowledgements to IE Insights. Scroll down to watch the full interview in Spanish – with subtitles available in English – on the IE Insights website, or click here.
The need to see clearly
Concepción Galdón: You were talking before about the role of the consumer, but also, about the role of all these people who share their generation with older people, but who share this idea, this objective of participating in transforming the world so that one can be successful, while generating success for others and for the environment.
And what happens is that these customers and these employees, because they were born into a world where technology already exists, so that products and services are sustainable from a social and environmental point of view, cannot understand why companies do not ensure they are sustainable. This is also what often happens with some executives when they suddenly understand that they too can do things differently.
José Luis Blasco: Sustainability, the word cannot stop us from taking action. The word is nothing more than a term and a beautiful concept, which we have subverted to a certain extent. To some extent we have popularized it, we have trivialized it. But really, those executives need a new, different term, so they can make that click that you’re talking about and put on those glasses that will enable them to see where the real waste is occurring, where there is real efficiency not only from an economic point of view, but from other income sources.
How their employees are part of that project, how those people that are working in their teams can have that same objective to work in businesses that improve, that transform the way we are moving forward. That’s where I think our really big challenge is. Our big challenge is that we’re very, shall we say, very good at asking questions. What’s going to happen with our water? What’s going to happen with climate change? What about inclusion? What about sustainability transition? But now it’s time to give answers.
CG: We have to move out of the core of sustainability experts, because the answers are not going to come from sustainability experts, they are going to come from professionals. The one who is best able to think of a new way of making a production line is the one responsible for that production line. The person who can best rethink a factory is the person who works in the factory. The one who can best think of a new material or the one who can best think of a new way to create a business model, is the person who has the Excel, the owner of the financial part of that business model.
What I think we need is to step away from the mainstream discourse, from basic discourse, let’s say, and more towards raising awareness. I think it has played its role and that it was important, but it ended up being very restricted to a number of people who felt that it was their conversation. But we have to come around to understanding that this is everybody’s conversation.
So, no one can be the best professional without taking a sustainable look at what they do, because at the end of the day, being sustainable means that what you do can last over time and that it can be successful over time. And to do that we need to protect the environment where everything is manufactured.
And this is an invitation to all the people, to all the engineers and all the technical people. To what? Not to become sustainability experts but to be the best engineers possible.
JLB: We are confronted with the fact that the professions of the future, which are going to need these new skills, still don’t exist. Not even the educational system responds properly in training financial experts, or sustainable financial experts or sustainable engineers. The main problem is that, for this to actually happen, we need a basic ingredient which is authenticity.
For a long time, we have been taught that to reinforce the economic variable, the social and environmental variable had to be taken into account. What we call ESG, to a certain extent, Environmental, Social and Governance, and this made better companies. Of course, this is totally right, totally right. And those key criteria were found in most companies, but especially in European companies, where in any of the conventional sustainability ratings they were generally right at the top, in tier one.
But we’re not talking about that. We are talking about companies that transform, not just what they are, but how they do it, and we are also talking about what they do. To change the direction of the companies it is not enough to ask good questions, it is the strategists, the financial experts, the engineers, the sales force, the human resource people, the people who actually drive the key four or five processes in the company, who take on board and work together to deliver that change. And that change requires conviction, but I insist again, it requires authenticity.
CG: It’s something so big, it’s something so complex that it takes on so many different forms in different industries, in different areas that it’s impossible.
When somebody comes to me and says, I know about sustainability, but what about sustainability? Because, for example, I personally know about sustainability in general, more than any person walking down the street nowadays, but mostly I know about the social side because that’s what I’ve worked in the most. But the man or woman, all the home, let’s say, it gets to a certain point, but there comes a time when the real solutions have to have owners who are technically competent, not in sustainability, but in their industry and in their specific field of knowledge.
JLB: I believe that the same thing happens in all companies. There are some key competencies that make the difference, the ones that really make for a successful business project, which must be the drivers of sustainability transition. Okay, our company uses a lot of diesel and we need to replace these 30-tonne machines which move tons of land to build large infrastructures and they have to be built differently.
The need for every employee to embrace sustainability transition
CG: A Board of Directors today that does not know enough about sustainability-related issues is neglecting its duty to the company’s owners, because it is not able to support the company in a matter that is fundamental in terms of the transition that is taking place. Today, any company should be very apprehensive about having employees who are illiterate in sustainability.
JLB: At the very least, they are not rounded professionals in changing and making decisions in a different context. Because, ultimately, we decide which products we put on the market, where we put the production plants, which customer segments we target, which employees, what talent we are using. To a certain extent all of those signs give rise to, appeal to a certain, let’s say, type of investor.
If one makes short-term decisions with quick returns, you put out signs that you want short-term investors as your shareholders who demand very short-term returns. But if you make long-term decisions which are healthy for the company, taking into account that new context, the company will attract a new, more numerous investor profile.
CG: We were talking about the fact that we really need to draw up a new social contract. And we were talking about the fact that, in this transition, there are going to be winners and losers, both at industry level, you were saying a while ago, and at people level, and a lot of people are rejecting this change, and this world that’s going to change. Because they are very aware there are going to be many losers.
And I don’t think we need to gloss over this. We have to be aware that this is going to be the new norm. So, I often ask myself how can we manage this? It’s ridiculous to think that a man who today works in a coal mine, is going to be an artificial intelligence systems architect tomorrow.
JLB: It’s much more complex. We have witnessed a transformation, the digital transformation, and we’ve seen that divide, that fracture. But, the decarbonization divide is going to be much more complex to manage than the digital one.
The skills, as you rightly say, to be able to make that transformation sustainable, are quite different from the ones required before. I would like to analyze two issues. The first issue is, we already know what’s going on. For example, right now, an engineer coming out of college, who graduates from university, or a person who is going to look for a job, knows the industry perfectly well and the future of the industry and the capacity for transformation of the company they are applying to. Asking questions inside and outside the company, helps those changes to take place.
And for me it’s important that as soon one talks to the company’s management and asks questions about this, it helps to adapt and to mitigate let’s call it the potential or the potential risk. And the other part, or the second important issue here is we shouldn’t settle for half-baked solutions. And the temptation is that those transformations that we need, for example, to decarbonize the economy, lie in intermediate technologies that are going to make us go back through the transition stages of those people in the future.
And I’m going to give you a very clear example, gas, for example. I mean, gas emits CO2. Sorry. Moving from a coal and mining industry to a gas industry and then to a renewable industry, wastes precious time. I mean, let’s be practical, let’s take the plunge, let’s build that momentum, let’s put the resources in place and let’s do it once and for all.
Sustainability Transition: Getting to the essential
CG: But we have to design that sustainability transition. It is not going to happen on its own, which means that is not reasonable, or it doesn’t seem reasonable to me, to say no. Because climate change is so important, nothing else matters. And then we’re going to move forward quickly on climate change. And we need to make the man who works in a mine today see this. Because if not, as the planet is going to die, it doesn’t matter. Hey, it does matter because there are many families, a lot of people and because if you only care about climate change, you should be worried about inequality and you should be concerned that for that transition to be effective, these people need to find their space in this solution.
And I think this is something that we are missing at country level as well as at individual company level, and that is to devise strategies to support people in the sustainability transition, who, by the very nature of the transition, if they are not proactively helped along, they are probably going to be left behind.
JLB: Yes, but Conchita, you need to remember something we are currently investing almost the same in fossil fuels as in renewable energies, and we mustn’t be under any delusions. The budgets of the EU Member States which have decided to be carbon neutral, cannot be used to build infrastructure or equipment that are going to produce CO2 in the future. Because we are sentencing all these activities to stop being useful, to being obsolete assets in the short term.
CG: What all of this means in the end is that people need training and everyone needs an education at all levels, starting with the youngest children, I think, but also, top executives and CEOs. I believe that the role of education to move towards that decarbonized, sustainable future requires different skills.
JLB: I believe, and to be more specific, let’s say skills that are going to be needed in the next three, four years, and that everybody who wants to have a successful career should know. The first, and I think essential point, is coal. The great disruption, Europe, basically, has decided to reindustrialize via decarbonized industries. By law we need to be carbon neutral by 2050. This is a key challenge. But do we know where the emissions of our products are generated?
Upstream, in our suppliers and raw materials? In our manufacturing processes? At the customer? CO2 or methane or any of the other greenhouse gases need to be understood. A second skill needed, also with the planet in mind, is whether products and services are circular.
How can we reduce our consumption of natural resources across the board? But if we move to the social side, we would be talking on the one hand, about the usefulness of products so that they are accessible to large parts of the population. We were talking to a certain extent, that democratizing access, so that progress reaches everybody, is a very important variable in product design.
CG: I would say two things. On the one hand, ensuring your product or your service is materially accessible to everyone. That message to the bank. Many people want to pay your commissions, why do you stop them? But also, how we understand the social dynamics that we create through the way we pay wages, through the way we accept or do not accept the new social contract we need to draw up and how the future of our companies affects the social and, therefore, political context.
And that, when we complain about political polarization and the problems that this creates, how we, as a company, how we educate or don’t educate our employees, how we help or don’t help our employees, how we educate or don’t educate society, our environment, and how we reduce inequality by lifting, by lifting people up from the bottom, we affect that context, how we protect the middle classes.
JLB: Each one of us in our positions of responsibility, we have to be truly, or we have to strive more and more to become agents of change. I think there are many things to change and the core competency at the end of the day in a professional is to be able to transform, to lead those changes or to participate in them. You don’t have to lead but you can always participate. And I think the sustainable part requires cross-functional, cross-disciplinary consensus in many parts of the company.
CG: How can I continue to be very competent in the specific area I’m in, but also know how to link it? How this has an impact on the level of all the communicating vessels with the rest of society, the environment, the operational context, etc. And in the end, I think it’s realizing that the world is going to change and it’s going to change with or without you, and you need to train yourself and be competent to participate in that change.
- Watch the full interview in Spanish – with subtitles available in English – on the IE Insights website
- Read Part 1 of this interview
- Link up with José Luis Blasco and Concepción Galdón on LinkedIn
- Read a related article: Corporate Sustainability – far from just plain green
- Discover IE Business School
- Apply for the IE online MBA or EMBA.
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