One of the narratives emerging from the lockdowns that have taken place around the world this year is that the human cost of the coronavirus is nature’s gain, as we have traveled less and consumed less, and more of us have reacquainted ourselves with our natural habitat.
In India, we saw a large improvement in air quality, especially in urban areas, as industries, transportation, and tourism stalled. Remarkably, the Himalayas were visible from Punjab for the first time in 30 years.
Sadly, though, the drops in carbon emissions had little impact on the health of the planet. According to the UN, the climate is changing much faster than anticipated as unsustainable consumption and production patterns persist. Despite the temporary decline in emissions, the world is not on track to meet the targets in the 2015 Paris agreement to keep the global temperature increase well below 2 degrees Celsius. If we don’t act now, the harm that we are doing to the planet will be irreversible.
But despite the scale of the challenge ahead in a short space of time, I still have cause for hope.
This year, as the pandemic exposed the fragility of our societies, it was the private sector that often provided innovative solutions. For example, private firms across the U.S. clothing industry reorganized supply chains to switch production from T-shirts to masks for emergency workers, and Danish shipping giant Maersk altered its operations to supply PPE for Denmark and Sweden.
Companies that stepped up and challenged their own status quo won praise and loyalty. This has resulted in a dramatic shift in the expectation people have of the role of business and its leaders.
As CEO of PepsiCo in 2006, I decided that we needed to change our entire business model to be more sustainable, and to deliver positive financial performance by finding innovative ways to minimize our impact on the environment. Our Performance with Purpose initiative was introduced with three main focus areas—people, performance, and planet—ensuring that sustainability was informing all of our activity across our operations, value chain, and the food and beverage industry at large.
It wasn’t easy, and I faced significant resistance. But gradually, over time, as the public increasingly clamored for businesses to play their part in protecting our precious resources, that resistance changed to enthusiastic support.
Businesses have a crucial role to play in changing consumer behavior: the push factor. If companies like PepsiCo change their model to use less water and more recyclable packaging, then by purchasing these products, consumers are helping to protect the environment.
But businesses also need the pull factor to help incentivize that change. They need consumers to purposefully not buy things that damage the environment. Our goals at PepsiCo would have been far easier to achieve if our consumers had voted with their wallets and forced us to change. Consumers are exercising this pull factor more vocally than before, but they also have some way to go.
Innovation must be at the heart of this change. It is not just about putting climate responsibility at the heart of business models; it’s also about companies being braver, fostering new innovations, and championing new ideas.
But the private sector cannot do this unilaterally. Businesses need to work with individuals and organizations across the board, harnessing the talents of a new generation of thinkers, leaders, and dreamers to help repair the Earth.
The reason I’m an optimist is that never before has the world been so aware of a problem and businesses so aware that they are part of the solution. Consumers have found their voice, and businesses—from JPMorgan Chase to Microsoft to BlackRock—are acting. Board members have to embrace change if they are to keep their customers loyal. We’re at a tipping point, and I’m hopeful that massive, global change is possible—as long as we keep pushing and pulling!
I have the honor of serving as a member of the Earthshot Prize Council, a new 50-million-pound-sterling global prize for the environment led by Prince William and a team of leaders from different parts of the world, which aims to incentivize change and drive a new wave of creative solutions that will save the planet.
By awarding five 1-million-pound prizes each year for the next 10 years, it will help provide at least 50 potential solutions to the world’s greatest environmental problems by 2030. These can be new technologies, systems, policies, or solutions and can come from anywhere in the world.
I believe that this prize has the potential to create real impetus and to provide a global platform for a newly galvanized private sector that will play an essential role in repairing the planet, by fostering new ideas, nurturing talent, maximizing impact, and taking solutions to scale.
We are at a crossroads. The time for platitudes and promises is over. We must create a better planet for future generations, and business must be at the vanguard, partnering with projects like the Earthshot Prize to create a movement rooted in optimism and achievement.
Indra K. Nooyi is the former chairman and CEO of PepsiCo.