How the public sector could help drive sustainable and resilient growth

We are living through unprecedented disruption. The recent Total Enterprise Reinvention report from Accenture found that disruption increased by 200% between 2017 and 2022 from relative stability in the previous five years.

The factors driving this are complex, but increases in the frequency and severity of climate related disasters, like hurricane Ida in the US or extreme monsoon flooding in Pakistan, and geopolitical instability, like the ongoing war in Ukraine and its impact on energy prices and the cost of living, ranked highly. As a result, one impact is clear: progress on sustainability has plateaued.

In fact, the 2022 UN Sustainable Development Goals Report found that, in many areas, progress has gone backwards. The working poverty rate increased for the first time in twenty years. Energy related carbon emissions rose to their highest ever level. And inequality between countries grew for the first time in a generation.

It is not hard to see why. As leaders of all kinds have focused on the immediate challenges that instability has created, longer-term objectives have been pushed down the priority list. Whilst 98% of respondents to the United Nations Global Compact (UNGC)-Accenture CEO Study agreed that sustainability was core to their role, 87% felt that current levels of instability limited the world’s ability to meet the SDGs. For example, spiking energy demand has caused many energy producers to turn to coal.

However, we are presented with a crucial window to refocus on sustainability as a way of addressing both immediate and long-term priorities by reinventing how organisations operate. And public service agencies could be uniquely placed to take the lead.

The demand for government leadership

It is no longer a case of convincing business leaders to take sustainability seriously. They need leadership and many are looking to governments to help provide it. The UNGC-Accenture CEO Study  found that 52% of CEOs viewed government as a key stakeholder in how they become more sustainable over the next 5 years. This is a clear message that the private sector cannot do this alone. So, how can public sector leaders step up to this opportunity and put a renewed emphasis on sustainability at this critical time?

Legislation, like the recent EU Corporate Sustainability Reporting Directive (CRSD), is helping standardise sustainability reporting frameworks and align incentive and regulatory systems more directly. COP27 saw more than $230 million pledged towards the goal of doubling adaptation financing from 2019 levels by 2025. And at COP15, the convention on biological diversity advanced a framework and investment for tackling biodiversity loss.

These policies are complimented by programmes that are investing in sustainable infrastructure as part of responses to wider disruption. The US Inflation Reduction Act 2022 earmarks roughly $370 billion in energy and climate funding. In Europe, complementing the EU Green Deal, the REPowerEU programme aims to accelerate de-carbonisation investments, reducing dependency on fragile oil and gas supply chains. The recently announced Green Deal Industrial Plan seeks to enhance the competitiveness of Europe's net zero industry by diversifying and scaling up manufacturing capacity for clean-tech. Both the above programmes hold significant potential in creating tipping points for net zero solutions.

There could also be opportunities for government agencies to play a more direct role in meeting sustainability targets in innovative ways. Accenture’s Total Enterprise Reinvention research suggests that by 2030 US$3 trillion could be unlocked through transitioning to decarbonised and sustainable products and services in eight markets alone. This is an opportunity for businesses and governments to transform how they operate together, but it is going to mean approaching these challenges in new ways. 

Leading collaboration across organisations and industries

First and foremost, government agencies could play a unique role in convening other ecosystem players to tackle challenges collectively and embed ongoing reinvention at the heart of these strategies. We’re already seeing examples of this in action.

The Net Zero Carbon Cities initiative is part of an Accenture partnership with the World Economic Forum. It supports city level government agencies to convene business and government leaders to identify and jump-start initiatives to reduce emissions and meet wider social goals. And, through the Net Zero Industrial Super Cluster programme, the Basque Regional Government and Business Development Agency helps foster collaboration on decarbonisation between the region’s two main energy companies and others.

In both instances, government agencies are going beyond regulation and policy to play a more direct role in orchestrating green economy transition with partners. Initiatives like these are examples of the more active role the public sector can play in nurturing collaboration and innovation. Scaled up, they could go beyond specific regions to tackle sustainability at a national, regional and international level.

Developing the digital foundations for sustainable transformation

The second key opportunity, is for government agencies to lead by example in establishing the digital and data core, including ESG reporting, to meet sustainability targets directly. This can happen at two levels; by conducting existing operations more sustainably and by identifying new ways to contribute through their remit.

For the former, there are examples like the electrification of police vehicle fleets in the UK or city leaders in Singapore exploring digital twin technology to aid strategic decision-making around sustainability initiatives. As well as the immediate impact these initiatives are having, government agencies should also explore how the underlying technologies and processes could support others. Helping to establish this digital core could be particularly impactful since the UNGC-Accenture CEO Study found that nine in ten CEOs (91%) reported that insufficient technology solutions are a barrier to building resilience in their businesses.

Not only could this help meet the demand and create tools for due-diligence of green financing and investment in sustainable infrastructure, it could also help organisations of all sizes to reinvent themselves, by accessing the green transition funding available. This could be particularly impactful for small and medium enterprises, who might otherwise struggle to fund riskier projects and innovative solutions, without some support in underwriting the investments.

Building a greener future

These steps could help kick-start wider initiatives. New business models and ambitious science-based ESG targets could help embed changes in long-term plans. Helping people build in-demand green skills and supporting them through the changes to come could improve participation. And developing more transparent supply chains and collaborative relationships with new ecosystem partners could help deliver shared success. In all areas government agencies should embrace the opportunity to take a leading role. In my upcoming blogs, I'll dive deeper into some of these areas.

Meanwhile, I would welcome the opportunity to discuss the role your national, regional government or agency could play, so please don’t hesitate to get in touch to discuss the latest UNGC-Accenture CEO Study.