Episode 11: Are companies ready for the polycrisis?

Sustainability in Motion Podcast - Episode 11: Are companies ready for the polycrisis?

In this episode of the Sustainability in Motion Podcast, Matt Orsagh and Maria Maisuradze of ED4S talks with Alice Krogh, founder of arkH3, about corporate systemic leadership, ecological overshoot, and the role of businesses in driving sustainability. arkH3 advocates for a model where companies lead systemic change and embed sustainability into strategy, rather than treating it as a side project.

Key Takeaways:

1. Corporate Systemic Leadership: Alice introduces corporate systemic leadership, a form of action where companies take the lead in addressing complex global challenges. This approach goes beyond traditional systems thinking and emphasizes a strategic alignment with sustainability at the core of business.

2. Understanding Ecological Overshoot & Social Undershoot: Alice discusses ecological overshoot as the point where humanity exceeds Earth’s capacity, much like an “overdrawn” bank account, while social undershoot highlights unmet basic needs and rights globally. Both issues stem from a business model prioritizing GDP growth over planetary health.

3. Current State of Business Preparedness: Many companies are underprepared for a sustainable future, often focusing narrowly on climate change rather than broader systemic risks. True readiness requires systemic foresight, holistic strategies, and adaptation to ecological limits.

4. Business as the World Needs: Moving from "business as usual" to "business as the world needs" involves prioritizing essential needs, ecosystem health, and systemic interventions over profit growth. This shift is essential to secure a livable future within planetary boundaries.

5. The Role of Policy and Big Business: Significant systemic change requires both policy reform and corporate leadership. Given limitations in policy implementation, Alice argues that business leaders and investors should advocate for transformative policies and lead by example in driving systemic change.

Conclusion: This episode emphasizes the urgent need for corporate systemic leadership and transformative change. It calls on businesses to redefine their roles within society, adapt to ecological realities, and contribute proactively to a sustainable future.

For more insights, visit ED4S at ed4s.org.

 

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Transcript:

Welcome to the Sustainability in Motion Podcast!

Matt Orsagh:
Hey, everyone! Welcome to the Sustainability in Motion podcast, brought to you by ED4S. We focus on the fast-moving world of sustainability to help the business community better understand and address the environmental challenges we face. I’m Matt Orsagh, Chief Content Officer at ED4S.

Today, I’m pleased to welcome Alice Kroh, founder of ARK3, a corporate systemic leadership platform. We’ll be discussing the state of sustainability, how prepared companies and investors are for the world ahead, and topics like ecological overshoot, social undershoot, and more. Welcome to the podcast, Alice!

Alice Kroh:
Thank you, Matt. It’s a pleasure to be here.

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Corporate Systemic Leadership

Matt:
To start, some listeners might be unfamiliar with the term. What is corporate systemic leadership?

Alice:
That’s a great question, Matt. Corporate systemic leadership may sound abstract, but I’ll break it down. Many of our listeners are likely familiar with systems thinking, which has been identified as a critical skill for navigating today’s volatile, uncertain, complex, and ambiguous (VUCA) world. It’s also considered essential for sustainability officers and leaders.

When you take systems thinking and put it into practice, you get what’s known as systemic action.

Now, you may have heard the phrase, “The polycrisis is a leadership crisis,” highlighting the lack of relevant leadership to address today’s complex challenges. In the absence of expected leadership from national governments or supranational bodies, individuals and organizations often self-nominate to initiate and lead systemic action. These are systemic leaders, and what they do is systemic leadership.

Corporate systemic leadership, then, is when corporations take on this role of driving systemic change. It’s not just a corporate strategy—it’s about fulfilling fiduciary duties and adapting sustainability to the realities of the 21st-century VUCA world.

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About ARK3

Matt:
That’s a great explanation. Tell us more about what ARK3 does.

Alice:
At ARK3, everything we do is rooted in our theory of change. Our starting point is that business leaders are uniquely positioned to drive systemic change and lead large-scale sustainability transformations. We also believe it’s not just an opportunity but a business imperative and fiduciary responsibility.

Our work is organized into four key verticals:

1. Awareness and Foresight:
   We act as a think tank, developing thought leadership, tools, and methodologies to drive necessary change.

2. Competence and Capability Building:
   Through training programs and capacity building, we help leaders and companies create business strategies, models, and value chains that are relevant in a VUCA world.

3. Transformation Consulting:
   Our consultancy combines sustainability and strategy as a unified discipline, helping clients achieve systemic business transformation.

4. Coalitions and Communities of Practice:
   We facilitate collaboration among business leaders to model a new role for business in society.

Two things set us apart:

• Systemic Foresight: The ability to see the broader planetary context, anticipate future challenges, and backcast necessary actions.
• Business Imperative Framing: We communicate the importance of systemic leadership in the language of business, focusing on business imperatives rather than moral appeals.

This approach has gained significant traction in the short time we’ve been operating, and we’re optimistic about its potential to contribute meaningfully to a sustainable future.

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Understanding the Polycrisis

Matt:
You mentioned the polycrisis earlier. For those unfamiliar, this refers to interconnected crises, including climate change and others identified in the planetary boundaries framework. Can you elaborate on ecological overshoot and social undershoot, and how they’re connected?

Alice:
Absolutely. Let’s start with ecological overshoot.

One way to think about it is like a bank account overdraft. Imagine you’re constantly withdrawing more than you deposit. Eventually, you hit a limit, leading to financial collapse. Similarly, humanity has been exceeding Earth’s carrying capacity since the 1970s, depleting natural resources faster than they can regenerate. This has led to accumulated damage in natural systems, which will eventually result in ecosystem collapse and diminished quality of life.

Social undershoot, on the other hand, refers to our failure to meet essential human needs and rights on a global scale. It’s the counterpart to overshoot in Kate Raworth’s Doughnut Economics framework, where the inner ring represents social foundations. Falling below this means unmet basic needs, while exceeding the outer ring (ecological boundaries) represents overshoot.

The two are interconnected because they stem from the same economic system, which prioritizes GDP and profit growth over environmental and social well-being. Addressing either requires systemic change.

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Preparedness for the Future

Matt:
In light of these challenges, how prepared are companies and investors for the world ahead?

Alice:
In short, they’re not prepared. Many are aware of their lack of preparedness but don’t know how to address it.

A key issue is the absence of systemic foresight. Most corporate strategies fail to consider the broader planetary context. Disruptions are often viewed narrowly—through competition, technology, or regulation—ignoring the looming effects of ecological collapse.

Even progressive companies with advanced ESG practices struggle to operationalize frameworks like the planetary boundaries meaningfully. Without systemic foresight, corporate strategies are destined to fail, and sustainability agendas become inconsequential.

Investors are similarly under-informed, which is reflected in their lack of demand for meaningful metrics and actions.

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Defining Business as the World Needs

Matt:
You advocate for moving from “business as usual” to “business as the world needs.” What does that look like?

Alice:
“Business as the world needs” involves two main criteria:

1. Delivering What the World Needs:
   Businesses must address essential needs or solve real-world problems while causing minimal harm. They should operate within planetary boundaries and adapt to a diminished planetary budget by 2030.

2. Driving Systemic Change:
   Companies must actively lead systemic change, either individually or in collaboration with others, to address root causes of ecological overshoot and social undershoot.

This departs from traditional sustainability approaches, which often emphasize incremental improvements or fair-share contributions.

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The Role of Policy

Matt:
What policy changes are needed to support this transition?

Alice:
Many necessary policies, such as financial reforms, debt cancellation, and phasing out non-essential industries, have been proposed but remain unimplemented.

However, relying on democratic processes to enact these changes in time is unrealistic. Corporate interests heavily influence policy agendas, which makes systemic change unlikely without a shift in business priorities.

Big business has a unique capability to drive systemic change. If a significant cohort of business leaders advocates for these policies, they could become a reality.

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The Path Forward

Matt:
How do we transition to a society with lower consumption and energy use, and how do we address the cultural changes required?

Alice:
The exact path is uncertain, given the complexity of global systems. However, the most realistic starting point is a cohort of business leaders and investors leveraging their influence to drive systemic change.

This requires enlightened self-interest, systemic foresight, and collaboration. At ARK3, we’ve developed tools and methodologies to support businesses in this transition. We invite others to engage with our work and join us in creating a sustainable future.

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Matt:
Alice, thank you for such an insightful conversation. Your work is inspiring, and I hope more companies take the necessary steps to lead systemic change.

Alice:
Thank you, Matt. It’s been a pleasure.

Matt:
To our listeners, if you’d like to connect with us, we’re on LinkedIn and social media. For more on ED4S, visit ed4s.org. Thanks for tuning in, and we’ll see you next time!