Talking about... unlocking leadership with Halla Tomasdottir

Nik Gowing

Welcome to Talking About Thinking the Unthinkable, our latest leadership conversation and webcast. I’m Nik Gowing. I’m delighted to welcome from New York Halla Tomasdottir, who is chief executive of The B Team.

The B Team brings together corporates, major corporates and their leaders to redefine the culture of accountability in business, as they put it, for our companies, communities and future generations, by creating and cascading new norms of corporate leadership that in The B Team’s words, can build a better world.

Well, obviously, all of us are consumed by the horrors since late February of the Russian invasion of Ukraine. The issues are existential for security right around the world. But in parallel remains another huge existential threat, sustainability, the climate emergency, nature and achieving Net Zero emissions.

Put bluntly, it’s the survival of us on our planet.

We expected the latest UN Scientific IPCC report would make a dire assessment that we are running out of time and reaching planetary boundaries. It was published on the last day of February. We were right. It laid out terrifying unthinkables. There are enormous implications for corporate leaders.

So Halla, in these 20 minutes, help us understand, are global leaders really adapting in the ways and at the speed that are necessary? You appealed after COP26 in Glasgow in November for “business and governments to take ownership of a crisis we collectively created and step up in more and meaningful ways”. Have they?

Halla Tomasdottir

Good question. Thanks for having me, Nik. I think the short answer is no. Because we’re not doing enough. And the IPCC report shows that very clearly. And now we’re also facing a war that risks taking resources and attention away from this existential crisis, because it’s another existential crisis.

So to be honest, I think business leaders, as well as global government leaders, and citizens alike, are all sort of overwhelmed by this moment on the back of COVID. We’re now at war. We’re facing the sustainability, climate and nature crises. And we’re also facing unsustainable levels of inequality and division and polarizations in our societies. So none of us are doing enough is the short answer.

For a little bit of, you know, optimistic evidence, the WEF (World Economic Forum) does a survey every year about the risks facing business. This year, the number one, two and three were about the sustainability and nature crisis we’re facing. So I think the recognition of the risk is certainly there. We also know that ESG is becoming an investment strategy that is going mainstream. So a new definition of success is being ushered in. And we have a new standards board that is going to put expectations through law and policies and regulations pretty soon.

And we have a lot of businesses, including The B Team leaders who really own this, and we have some governments that are really owning it. But it’s just not widespread at the speed and scale that we need yet.

Nik Gowing

You used very tough language after Glasgow. You talked about there needing to be a commitment to tear down silos, as you put it, and break from what you called the perverse incentives of the past to build and invest in the future. What you’re saying is, even if that’s what’s necessary, that’s not the way most corporate leaders are seeing it.

Halla Tomasdottir

Well, so here’s the fact Nick, we meet in Glasgow - governments, business leaders and citizens and activists alike. We make old commitments, nationally determined contribution commitments are negotiated. Businesses showed up in force like never before in Glasgow, and made bold and brave commitments, and some action collaborators were really put in place.

But we go back. And the fact of the matter is that $1.8 trillion is annually invested by our governments collectively, into what we would say is environmentally harmful subsidies. And so we’re investing 1.8 trillion US dollars into our past? Into our demise? And at the same time trying to meet up to set goals to prevent our demise. Because Nik it’s not the planet that is at risk. It is humanity’s ability to live and coexist on that planet that is. And so bottom line is, the incentives are not aligned with the future we need.

Nik Gowing

You say that that $1.8 trillion every year is subsidising the destruction of nature. It’s that bad - the destruction of nature.

Halla Tomasdottir

It is that bad. And about $500 billion of it or so, give or take, is invested into fossil fuel industries. So essentially, subsidising profitable industries that are funding a war.

I think this is insane, Nik. I don’t have another word for it, but insanity. And it is high time that we take some serious conversations between business, many of them who are recipients of these kind of funds, and governments and civil society alike, to realign and repurpose those incentives to actually give us the future that we need and our children deserve.

Nik Gowing

Why don’t they really get it? Or are they paying lip service? I don’t like that phrase greenwashing. But are they paying lip service? In other words, saying they understand it, but don’t really want to commit? Because there has been a remarkable change in some ways, which is that the understanding that nature is being abused literally in the last 12 months? That it’s an externality, which has got to be costed?

Are you saying that that’s all superficial rubbish, that most of them think, “well we can get away with it, we can, we can do an audit, we can put it in our annual reports”. But we don’t need to take any notice of it.

Halla Tomasdottir

I would actually say that for at least the businesses I work with, and maybe as much as 20% of businesses, it is not lip service. They are dead serious about this. The future of business depends on us tackling this. And they are begging and asking governments to rise to the challenge to write the rules of the economy so that we put a price on our externalities and so that we have reporting requirements that actually give us a global baseline standard.

So I wouldn’t go there. What I think is happening is we have a crisis of conformity and leadership. You’ve said so yourselves. And the systems we live within, they are sort of not fit for purpose anymore for our reality. And the whole shareholder primacy era that we grew up in, and business schools and running our businesses, has come to an end.

I would even go as far as maybe globalisation era is facing some existential moments right now with the geopolitical risks we are facing. So there is a new playbook in business that is needed. And I don’t meet many business leaders who ask “why do we need to change our ways” anymore? Most of them ask “tell me how”.

And so I think one of the things we’re dealing with is human capacity to lead in the face of so many intersectional and complicated challenges. And so I don’t think it’s lack of will but I do think it is maybe partly lack of capacity, partly lack of having righted the rules and, and really have governments lean into it. And I think, to be honest, we need to disrupt the conformity of leadership to truly innovate. And right now, you know, we have most CEOs, boardrooms, they don’t reflect the world we live in, nor do they fully understand it.

So one of the goals we always say from The B Team, is we need to change who so we can change how we lead and do business. A world that is male, pale and, you know what comes after that, isn’t innovative enough. Isn’t fit for this context. We need a new leadership playbook and part of that is bringing leaders who see and can help us solve these challenges more powerfully to the table.

Nik Gowing

Well, as you know, that’s exactly what we at Thinking the Unthinkable, Chris and I, have been writing and warning about the same must be done. And that’s why I wanted to talk to you because here we are, at the time of recording six months on from Glasgow and one of the things you said right after Glasgow, that leaders everywhere must accelerate action. Demonstrate accountability. Now even allowing for the massive disruption being created by the war in Ukraine, what you’re saying is there are some who are doing it, but many others are kind of finding ways of skirting around it, or parking it when there’s an absolute central necessity.

Halla Tomasdottir

Yes. Or they’re looking. I’m not trying to feel particularly compassionate towards business leaders, but I have some compassion about the complexity of this moment. And I think many are struggling with how to navigate this moment. What standard should they be measuring themselves and their executives against? And so the companies I happen to work with on The B Team, they’ve been at the forefront of the Net Zero transition, and they are now at the forefront of the nature-based solution conversation. And they have been at the forefront of seeing these problems as something we need to approach with a just transition lens.

So it’s not just about the technical solutions to reduce carbon or to bring in nature based solutions. It’s also about the humane dimension of this because we have a lot of opposition in many societies and in politics against this agenda. Because we are not really bringing the people most impacted into these conversations. So I don’t want to say that people are purposefully trying to skirt this conversation or their responsibility.

I think this is complex. I don’t think governments have adequately leaned into their role of writing the rules for business. And I think we have to align the incentives. And I don’t think we’re having the radical collaborative conversations, and the radical inclusion, that is needed to be able to deal with such complicated, unthinkable times.

So we need to rethink everything we’re doing, and really have the courage right now to rethink even the definition of leadership. It’s no longer just given to those in power, it is essential that each of us no matter where we serve, leans into this moment and figures out what we can do.

Nik Gowing

How much do you think leaders and those at every level need to be almost scared or frightened into it? I’m thinking about the don’t look up moment, really, which is: there’s a meteorite approaching the earth, it’s going to hit in six months. You can either ignore it, but it’s still going to happen. And I’m just conscious of the some of the language, but when you talk about warning of a catastrophic disruption - I’ll say that, again, catastrophic destruction - of biodiversity, and phrases like “we’re financing our own extinction”.

Does that sort of apocalyptic scenario, encourage people to change?Encourage leaders to think differently? Or do they just write it off as saying, that’s more extreme than I can cope with?

Halla Tomasdottir

That is a good question, Nik. And I’ll humbly admit that I, like many people in our movement that believe sustainability, nature based solutions and people need to be put on the agenda more powerfully than ever before, we fall into this fear based narrative. And all of us are in quite a fearful moment. Right now, I don’t think we’ve been in as fearful a moment in the world before.

So the tendency is for each of us to go there. But to be honest, I think our greatest failure has been that we use that narrative way too much, including myself. I think we would be far better served to help paint a picture of the opportunity that the current moment presents. And so, one of the language I tried to use, in particular, when speaking to people, is the fact that we actually none of us really love where we live anymore. If you think about it, that’s the reality.

So how do we envision together a future where we can love where we live? Where we don’t have weather events threatening our very existence, our very homes, everyday where we can continue to enjoy nature? Where food security and energy security is actually possible and understood through the lens of climate change? Because I think that’s the power of this moment.

I’ll give you my optimistic pitch, we’re at a terrible time but it is at the deep bottom of crisis that we have often risen up as humanity. And I think maybe we’ve now been given that opportunity to come out of these terrible times with, with a collective quest to actually create a future that is going to be good for all of us. But in order to do that, we have to get out of where business speaks to business. Only governments speak to governments only and civil society tries to hold us to account and understand that each of us have a role.

Business can unlock the enterprising, innovative muscle to come up with accelerated action. And by that give government’s ambition and cover to do what they need to do to write the rules to be aligned with the future we need. And citizens need to hold, and should hold, us to account as they are doing. Employees are holding most employers to account like I have never seen before.

Nik Gowing

You’re seeing it. Do you have very clear evidence of that?

Halla Tomasdottir

Absolutely. And I would say the great resignation is one example of the evidence we have in the corporate world that people are increasingly not only choosing with their words, but with their feet, where they want to work. And companies that are not placing planetary and personal sustainability at the heart of their agenda, they’re struggling to attract and hold on to people right now. So we see great evidence there.

We’re also seeing evidence that before we used to see surveys that said something like 70% of consumers want to play sustainability, you know kind of think sustainability really matters, and thinks these challenges are real, but only about six or seven percent were taking concrete actions. Well, now we’re seeing something like doubling and tripling of that action being taken particularly from 30 years old and younger. So there’s a generational shift that is happening here that is making every business leader who wants talent think really hard about how to place planetary and personal sustainability at the heart of everything they do.

So I’ve actually never seen more of that than in the past couple of years and even more accelerated in just the past few weeks.

Nik Gowing

Halla, we’ve got five minutes left. And let’s try and end on a positive note, despite the fact that we’re facing, still, COVID - six million deaths so far. We’re still facing the climate emergency - deepening, according to the IPCC. And now we have the unconscionable horrors of what Russia is doing in Ukraine. A leader seeing this, looking at the Thinking the Unthinkable website and so on, will be saying, I’m looking for light. I’m looking for a way forward, I’m looking for inspiration at a time when I’m trying to balance the books, maintain liquidity of the company, whether I’m an SME, or whether I’m a giant corporate.

What are the kinds of hints or tips that you can give, which will say to a leader, try things in a different way. Be prepared to experiment. Be prepared to fail, if necessary, but keep trying? Let me hear what your thinking is on that.

Halla Tomasdottir

I think my first call to action would be that this is a moment where true leaders show themselves. Because it is in the face of great challenges that we can rise and ought to rise.

So let me just say, I think the first question each of you listening should be asking yourself is: “Who do we choose to be at a moment like this?” And the greatest encouragement I would give to everyone is that we have seen great unity between governments and business alike in the face of this aggression we saw from Russia and invasion into Ukraine. So we know that we can come together for the principles that matter. Democracy, peace, progress. And so why not use this moment to come together for people and planet?

So what are the concrete things to do? First thing, rethink leadership as something that comes only from you. Even if you’re called CEO or board director or senior leader, invite more of your people to the table on the discussion on the co-creation that is needed. Unlock leadership in everyone, in the face of this, and that will help bridge divides, which are significant in all of our societies, and actually unlock innovation and transformation.

So invite people who don’t look and feel and think the same way as you do to be part of co-creating the paths forward, I am a huge believer in innovation. This is the greatest leapfrog moment you will ever face. And if you don’t take it by unlocking leadership more broadly, and your entire ecosystem, not just your employees, but even your customers, your shareholders, your communities, your local communities, if you don’t size it, I actually don’t think you’re a future fit.

So it is an existential crisis for you as a business leader. If you’re not really thinking about how to unlock leadership and service other people on a planet positive future, there is no business in a broken world.

Nik Gowing

Do you think most of the leaders are tuned in to the uncertainty, the disruption that’s going on, and therefore, the new skills, the new reservoir, the new depths they have to go to to actually find new ability to be innovative, and guarantee the survival of their business and the flourishing nature of their business?

Halla Tomasdottir

Most business leaders are tuned in to the horror we are seeing. And look at the humanity that this current and most recent crisis we are facing, on top of many crises that existed before, is unlocking.

So we as human beings need to unlock our humanity in service of this moment. And the only way to do that is to not think you have all the answers. So some of the key leadership skills right now are humility. And knowing that you need to be bringing people together to work on this vulnerability to actually just openly admit this as hard.

And it’s a journey. Share your journey and call on others and be willing to learn from others. Courage - and that sits in our heart, not in our head. And actually, this fundamental belief that people have a leader inside of themselves - each person. And if you are able to speak to people’s hearts and humanity at this moment, you will unlock the courage and innovation to navigate these times.

That is the opportunity we are presented with. That is the opportunity we must take because everything is at risk.

When we live in a world where peace is challenged, where our ability to live on this planet is challenged, and more people are at the very end of the rope because we are actually in a well-being crisis of not just the planet, but also people. So giving people that sort of collective purpose to work on this new leadership playbook to co-create a future that resonates more with who we are as human beings is probably the greatest unlocker of progress, growth and innovation that you as a business leader can do.

Nik Gowing

What would you say, finally, is there a danger of you sounding too idealistic about what you’ve just said, even though practically it’s so important to achieve?

Halla Tomasdottir

Absolutely. But I am a prisoner of hope and a stubborn optimist. And I think that’s the only choice we have. Because the alternative is basically to agree that we are going to see this moment as some kind of an apocalyptic unfolding, and look back at it and say, why didn’t I do more? Or what did I do?

And so I think we have to ask ourselves, how am I choosing to lead? We all have enormous power. We’ve now given it to fossil fuels and autocrats and people who maybe don’t place the ability for humans to co-exist on this very own planet of ours, that we collectively own, the power. And now it’s time for us as humans to take back that power, share it more broadly, and work together to do this.

I don’t see another alternative, Nik, I just don’t.

Nik Gowing

Well Halla, thank you very much indeed for joining me. And I hope you can continue on this business of tearing down silos, because it is so critical and, as you put it, breaking from the perverse incentives that have got us to this position. So thanks very much indeed. Halla Tomasdottir, who is chief executive of The B Team and joining me from New York.

Keep thinking unthinkable more than ever. It’s both possible and necessary.