Professor Ioannis Ioannou joins Purposely to share his thoughts on ESG, sustainability and how he is positive about the future, ‘good people of the world will eventually dominate the bad things of the world and get us to that more sustainable future that we all deserve’.
Professor Ioannou is respected and renowned strategy scholar whose research focuses on sustainability and corporate social responsibility (CSR) globally. His work focuses on how modern business contributes towards building a sustainable future and his academic work evolves around two main themes, including; understanding how the broader investment community perceives, evaluates and reacts to corporate engagement with, and integration of, environmental and social issues into strategy. Also, understanding the multiple and multilevel factors that may affect the corporate decision to adopt environmentally and socially responsible strategies.
Ioannis regularly publishes in top-tier peer-reviewed academic journals regularly winning awards for his leading and thought provoking work. In 2016 he was awarded the ARCS Emerging Sustainability Scholar Award; an award that recognises a scholar in the area of corporate sustainability.
Purposely caught up with Professor Ioannis while he was in on sabbatical in Miami and we covered a wide range of topics including professional and personal.
Tell us about your role?
‘I have been at London Business School for about 13 years now I do research in the domain of corporate sustainability and responsible business. I teach a MBAs master students, executives, senior executives. The last component is that I try to engage as much as possible with the world of practice with the world of managers, so I can keep my research fresh and relevant. I also to be on top of big issues that concern the world of business.’
Has your work become more popular, and does your phone ring more often?
‘Yes, over the last five to seven years issues of sustainability and corporate responsibility are increasingly at centre stage and this will continue to be the case moving forward. You see that across multiple perspectives, first, in terms of what companies are looking for when they are looking at executive education programmes, what MBA students are looking for when they choose courses or even when selecting the business schools. The world has changed dramatically and the issues that I happen to study are becoming more and more centre stage.’
What the main drivers behind the focus on sustainability for businesses?
‘The mega trends that are driving this change in the competitive landscape are here to stay. So for instance if we look at the negative effects on the environment such as climate change, environmental degradation, deforestation and the loss of biodiversity. As well as social issues where there is a drive for equity and more diversity. These mega trends are here to stay and they are not a passing fad. Even if you ignore the ethical and moral issues, which we shouldn't. But let's ignore them for a minute, if you're a good manager or business leader, you're realising that the competitive landscape is changing and the demands of your customers are changing, the demands of your investors are changing, regulation is changing and civil society is changing. This translates into different types of civil activism that also puts pressure on companies. So if you're a good business leader and you look around at what's happening in the world you realise that these broadly defined environmental and social issues are becoming not only pressures on the business but they are fundamentally shifting the competitive landscape.’
‘If you want to have a business that survives and thrives within this context you have to adapt, you have to move towards a business model, that, of course, remains financially viable and financially thriving. However it needs to account for these challenges, you need to integrate them in the core of your business and hopefully, in so doing, you're able to also have a positive impact on society
Have many companies successfully embedded sustainability into their DNA?
‘There's still a long way to go and even the best of companies are still in a period of experimentation. I will say that there's a lot to learn from insurance companies currently, for example some are hiring climate scientists in order to understand weather patterns in order to price risk. Insurance companies were never working with climate scientists before. I've gone into businesses who are now hiring biodiversity experts to understand the implications of biodiversity loss for their ability to produce and to remain viable.
What would you say to leaders wanting to embed sustainability?
‘No company became a leader by doing what someone else has already done. Unilever, for instance, are referred to leaders in this space, however, they did not become leaders because they followed of someone else, instead it set the example. Similarly, Tesla when they rethought the whole idea of what the car is, they didn't follow the example of someone else. They innovated and found their own unique way to do things which has changed the industry as whole. That is what I always tell students, executives, practitioners out there that we can learn from general trends but imitation is not the right answer. What worked for Unilever and what worked for Tesla, it's unlikely to work for you, you have to discover your own unique way of contributing to these problems or resolving these problems through your business model.’
Looking back to you school years could anyone have predicted that you would become a Professor?
‘My primary school teachers would have thought that I would be an actor of sorts or some kind of performer. I guess, teaching an MBA classroom or giving talks has an element of performance to it. Sustainability and a move towards academic inclination came later in life, perhaps in high school and during my undergraduate studies. A real interest in sustainability grew during my doctoral studies. So it was more of an evolution.’
Have your family been supportive of your career choices?
‘Oh, absolutely, there was a strong support and encouragement and appreciation for the value of education. It was a big deal for them particularly because no one else in my extended family had left Cyprus to go all the way to the United States in order to study. Cyprus is closer to Europe so a lot of people from Cyprus go to the United Kingdom or to Greece, or to other European countries to study. So it was a bit of a risk, and a bit harder to go all the way to the to the US but I was able to do this because I had their support and encouragement.’
Ioannis graduated from Yale University, majoring in Economics and Mathematics and holds a Ph.D. in Business Economics from Harvard University and the Harvard Business School. He joined London Business School in 2009 as an Assistant Professor and he is currently an Associate Professor with tenure.
Do you feel inspired by young people who are willing to take on these issues?
‘Yes, they absolutely do. Younger generations have realised that this is fundamental for their futures. It is an existential issue and challenge for them because of the negative impacts that they are going to experience. So in other words, we're not talking about negative impacts of environmental and social issues to some unknown future generations 100 years down the line, we're talking about negative impacts that are already here. Issues that are only going to get worse in their lifetime. So certainly, over the years, whether I look at my MBA students or actually undergrads that I had the chance to teach these issues are inherently important. I don't have to argue the case. Whereas if you asked me in 2009, yeah, for some audiences I had to argue the case about why climate change is important and to know why loss of biodiversity is important. That's why we are seeing the rise in youth activism across the world, for example; extinction rebellion movement or Greta Thunberg. I think that it reflects the zeitgeist and these issues are not just scientific issues or just business issues the for the younger generations, these are profoundly personal issues. I have certainly seen that shift over the last 10 to 13 years.’
Is there an element of ESG that should take priority in your mind?
‘I have studied the ESG from a business perspective for many years and it is more than clear to me that there's no way you can see any one of these issues in isolation. Climate change has profound implications on inequality and inequality has profound implications on who is going to suffer most, for example; the gap between developed and emerging economies and social issues are so intrinsically linked to climate issue. The whole idea of the ‘just climate transition’, for instance, and how we're going to go to a low carbon economy and who is going to pay for the transition is inherently a social and environmental issue. I wouldn't choose between environmental, social or governance issues but rather I would encourage everyone to see these as hugely independent system level problems. We cannot pick and choose to our liking which one we're going to solve and which one we're not and we need to attack if you like all of them at the same time and attack the root causes of the system that has essentially generated all of these challenges’
Has sustainability focused changed your own behaviour?
‘Absolutely, I do my best. So I'll give you a couple of examples, right? I don't own a car and I've never owned a car. You know, I don't think you need one in London and I always look to use public transportation, even in Miami that practically there is no public transportation, I still tried to either walk or, or use the Metro whenever I can. I have switched my diet to more of the plant based alternatives. I'm very conscious about my use of electricity, my use of water. That said… while I think what a person is doing to change behaviours is important and I am a big fan of the approach we shouldn't confuse personal responsibility with system level change or responsibility of the system to solve the issues.’
What is the best way for an individual to contribute to a sustainable world?
‘First and foremost I would tell you to vote, because we need the right people to vote for the right rules and regulations and this defines the rules of the game that allow us to bring system level change. It wouldn't be me telling you to turn off the lights at night or drive an electric vehicle, I would prioritise system level change. That doesn't mean that what you do as an individual should be neglected or is unnecessary. However it is by no means sufficient to bring about the whole system change that is needed. We also vote in terms of which companies we choose to buy products for and the companies we decide to work for and do they align with our personal values and our personal norms. We also vote with how we choose to invest our pensions, and where we choose to invest our savings, and therefore we act as investors. So we have multiple hats to wear and we can leverage our power to do what is right. We have a choice about how to devote our time whether that is joining an NGO or becoming an activist contribute to civil society kind of discourse on sustainability issues. There is many ways I think on an individual level. Of course, one person cannot do everything, but different people can have different types of impact, and all of them are necessary if we're ever going to move towards this more sustainable future that we all desire.’
Do you feel optimistic about the future?
‘I do, although there are days when I wake up optimistic and there are days where I wake up and I become pessimistic. I do see the hope, drive and motivation that exists to really build a better world. On the other hand I do see corruption, political failure including what's happening in the world right now with the invasion of Russia into Ukraine devastating impacts might actually turn the clock back on climate change given the energy crisis that is going to cause and it’s causing already. I try to remain optimistic and instead focus on the considerable progress we can still make towards the sustainable development goals and build a world in which we all want to live. My hope, therefore, is that the good things in the world and the good people of the world will eventually dominate the bad things of the world and get us to that more sustainable future that we all deserve. I believe that on most days, but not all of them.’
