Increasing impact through partnerships

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By Francesco Starace, Chief Executive Officer and General Manager of ENEL SpA


Learn more about this timely topic at the upcoming
Global Forum on Development on 5 April 2017
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CHILE-OLLAGUE
A view from the community of Ollagüe

Planet Earth is changing, evolving, with such speed and disruption that humans have been forced to question many of the things that used to be taken for granted. This is due in great part to the digitalisation of a world that is ever more interconnected, and therefore increasingly complex.

Whilst this complexity and change might bring about some discomfort initially, it is important not to fight it. It is inevitable, and it must happen. It is much better that humankind embraces it. Doing so means being willing to open up to new ideas, to the potential of new technology, and to listen to what people want and need.

The latter point – the importance of listening – is fundamental to success in this new environment. To maximise the ability to listen, it is vital to partner with like-minded peers such as businesses, governments, municipalities, universities, centres of research, institutions, start-ups, individual innovative projects, and consumers themselves. Leveraging the synergy of all of these combined antennae can give businesses a huge advantage; and today more than at any time in the past, we are well-positioned to capitalise on this phenomenon.

Consider the Sustainable Development Goals of the Global 2030 Agenda. These 17 objectives respond to the biggest and most pressing challenges facing us today. What single organisation is able to effectively tackle any one of these goals on its own? Beyond single organisations, even a single approach from multiple parties will be insufficient. The SDGs – which provide us with a roadmap to future social and economic success globally – absolutely demand partnership across sectors, across geographies and across disciplines.

One form of partnership that businesses should better explore and exploit is the inextricable link between the concepts of innovation and sustainability. It is important to recognise that this is not just an ethos. This is a tangible way of doing business. From an industrial point of view, innovation is unlikely to be successful if not built upon a foundation of sustainability. Furthermore, for corporate sustainability to have a meaningful impact, it needs to deliver real progress for people, and technology innovation offers us the most efficient way of doing that.

Increasing impact by creating shared value

Keeping a watchful eye on, and responding proactively to, society’s priorities allows businesses to overcome new challenges. It also allows companies to refine their business model into an ever more competitive, innovative one. Creating shared value for a company and all its stakeholders is an opportunity to combine competitiveness with the creation of social value in the long run.

Take the generation of energy. Until not long ago, the energy sector lacked direction on the question of sustainability. Decision-making did not factor in questions of community engagement or climate change, for example. So when innovation came along, some of its value was left on the table because the sustainability questions had not been properly considered. In a long-term business like the energy industry, investments must generate value for shareholders over 30 years or more. A long-term, sustainable, perspective is therefore crucial.

Unifying innovation and sustainability would allow businesses to create shared value with their stakeholders that guarantees long-term protection of shareholder value.

Innovation needs to be focused on what customers want and need, and what will create value for them. In the energy industry, investments in grid digitalisation, as well as the growing efficiency of storage systems and distributed generation, enables a more active and participatory role for customers, providing them with efficient solutions for the production, storage and management of their energy requirements.

Think back to what has been achieved with the community of Ollagüe, high in the Andes Mountains on the border between Chile and Bolivia. The installation of an innovative off-grid solution there was the response to a rural electrification challenge: a hybrid power plant, combining storage, solar and wind power with 1 538 photovoltaic panels and a small wind turbine, provide electricity all day long.

The entire project was executed involving local authorities, communities and the Chile and Antofagasta universities from the early stages. They helped with analysis, engineering and project management. The maintenance and management of the plant was assigned to the community, rendering this innovative solution fully sustainable, in all senses of the word.

What we see here is that by identifying all relevant stakeholders in a project and mapping their needs (like new growth opportunities), businesses can anticipate issues and pre-emptively identify possible solutions. Local needs are thus met in conjunction with business objectives through a specific materiality matrix for a given site, so as to identify the projects and initiatives that correspond to all shared priorities.

Innovation and sustainability come together as a replicable model

The concept of delivering through partnership by combining innovation and sustainability has the potential to redefine the shape of global business. In working towards this goal, there are two important considerations to bear in mind. The first is that businesses need to be ready to upset a pre-existing corporate culture, which can only really become possible through an open approach. The second is that partnerships can be simple networks, but it is the people involved – with their commitment, diverse experiences and common vision – who are the key to unlocking potentially enormous shared value. Ensuring the conditions are right, with the appropriate culture and the best people in position to deliver the project, is a considerable challenge for a CEO.

For this CEO, and for his team, listening remains crucial, because it will be people who will ultimately lead us down the path to the social and economic success of the SDGs. The truth is that we still do not know exactly what heights technology will reach, or even whether it will allow us to surpass these goals, but people are going to be surprised by how quickly these technologies arrive. In the blink of an eye, the world continues to change. It is necessary to be open to that, and to embrace it, because this set of unknowns will be the key to enable us to unlock the solutions to some of the world’s greatest challenges. As Nelson Mandela said: “It always seems impossible until it’s done.”