Dr Victoria Hurth was in Jersey last week to speak at the first Channel Islands Sustainable Business Conference. She told Emily Moore why the world needed a new approach to decision-making.
If the objective of the economy is long-term wellbeing for all (sustainability), where did we go so wrong, and how do we fix it… fast?
This was one of the questions with which Dr Victoria Hurth challenged the 200 or so delegates who attended the inaugural Channel Islands Sustainable Business Conference which took place last week.
Speaking before the Jersey event, the independent pracademic and fellow of the University of Cambridge Institute of Sustainable Leadership explained that her quest to “make sense of purpose, sustainability, ESG and governance” stemmed from a childhood realisation that “living a good life did not mean that you needed to have lots of money”.
“I was always very analytical and as I grew up, I started to realise that most of the decisions adults made were based around achieving materialistic ambitions, such as buying bigger houses or cars,” she reflected. “As I saw more of this, and saw the problems in the world, I realised that the decision-making wasn’t working.”
This conviction grew stronger when she undertook some voluntary work in South Africa at the same time that the Rio 10 World Summit on Sustainable Development was taking place in the country.
“That was when I realised just how bad the decisions adults were making were,” she said. “I then spent a long time in practice and academia, engaging with a wide variety of people to try to work out how we solve the problem that our decision-making is not in our own best interests.”
Acknowledging that there are a “lot of well-meaning people and people waking up every day wanting to act”, Dr Hurth argued that, although their intentions may be good, without a clear focus and “uniting of energy”, their actions could have “little or even negative impact”.
“The fundamental theory of change is that we have the solution, the energy and the people who want, or could be persuaded, to act,” she said. “What we don’t have are the confident individuals to lead, to embody a future that doesn’t yet exist and to inspire others to live in that future.
“And that confidence will only come from unity and clarity. We cannot unify around nothing. What we are missing is something broad enough that we can buy into which gives us the framework to unite our energy behind. We’ve spent a lot of time focusing on individual problems and coming up with micro solutions but by the time we’ve designed the solutions, the context has changed.”
Determined to create this framework, Dr Hurth co-led the five-year development of the first global ISO standard in Governance of Organisations (ISO 37000:2021).
“While a lot of people can talk about governance in abstract terms, ISO 37000 is a powerful catalyst for change,” she said. “Now there is a framework which enables organisations to look at what governance behaviours ensure that the organisation exists to do something useful with the resources it is given and ensure that it is not destroying the basis of long-term wellbeing for all.”
This premise feeds into one of the key takeaways which Dr Hurth urged delegates to remember.
“Unsustainability is one massive governance failure at all levels, based around a failed assumption that financial income is a good proxy for wellbeing outcomes and that financial capital is the main resource to protect and enhance,” she said.
“This leads to the second key message, which is that we will not achieve sustainability without fixing the failed governance system. ESG is an imperfect ‘do no harm’ agenda but it is not enough. We need hyper innovation.”
This, she argues, requires a “transformation of governance to create a wellbeing economy and purpose-driven organisations, driven by meaningful work and lives, as failure to do this will lead to a loss of the benefits of a market economy”.
“The problem with our current systems is that organisations are governed in a way which causes the problems which are damaging long-term wellbeing for all,” she continued. “Sustainability and the economy both have the same goal of creating long-term wellbeing but while both have the same basket of assumptions, they are moving in opposite directions and therefore undermining that goal.”
Contributing to this problem, Dr Hurth believes, is a widespread misunderstanding of what sustainability is.
“There is so much confusion and so many powerful novices talking authoritatively on the wrong subjects,” she said. “Sustainability is about supporting the wellbeing of everyone, but we haven’t been able to say that clearly enough, which is why we’re getting deadlocked in debates and arguments about strategy. But how can you talk about strategy unless you know the goals and parameters? That is what forms the basis of the governance.
“We can have lots of nice ideas but unless those conversations are anchored in governance – the system that shapes our cultures, what is done and what is rewarded – then we are just having nice conversations. That is why we will only achieve change by focusing on governance, and that is why ISO 37000 is so important, as it provides that practical framework against which you can judge behaviours and drive accountability, as well as looking at what our legal and financial systems need to look like in order for that governance behaviour to be true.”
Understanding which governance systems “drive behaviours which are unsustainable” is also vital, says Dr Hurth, if Jersey is to achieve its ambition of being the leading sustainable international finance centre in the markets it serves by 2030.
“To achieve that ambition, the Island needs to have its eyes wide open and understand what it looks like to drive sustainable behaviour,” she said. “There is a real opportunity for Jersey to clearly lay out the spectrum between the old-school ESG agenda – finance which filtered out a couple of the most harmful things but carried on as normal – and fully governed and managed organisations, which are not just mitigating harms but are having a positive impact.”
Returning to the question posed at the beginning of her presentation, Dr Hurth said that a relatively quick fix was possible but that leaders needed to “start embodying that transformation”.
“We have to remember that we create the economy; it is a social construct, intended to take resources and allocate them to transform the wellbeing of society as a whole,” she said.
“We can therefore turn the tide on this and the people in this room are the ones who can make the change and start the move from a GDP economy to a wellbeing economy. It is the people in this room who have the power to change the system.”
