Staying put or drifting is not an option. The IPCC have said we need “rapid, far-reaching and unprecedented change”. But, in the face of significant uncertainty, deciding which “port” to sail to and which course to chart requires bravery and “lifting of the sights” to get a better picture of interdependencies, priorities and the sequence/pace of change needed.
Roosevelt’s 1930s New Deal revolved around “3 Rs”: relief; recovery; and reform. Just as this involved a series of programmes with fairness at their heart, so for utilities today a package of change is needed, but one focused on fairness – within and between generations.
Key to this is a utilities roadmap to 2030 to help chart the choppy waters ahead and realign public expectations about the roles/responsibilities of government, regulators and companies in delivering public interest outcomes. This should start with a high level vision for regulation in the twenty-first century and more clearly show how it is linked to government plans and the advice of bodies such as the Committee on Climate Change/National Infrastructure Commission.
There are many proposals for radical regulatory redesign. However, it may be premature to introduce these now. Implementing a series of “low” regrets evolutionary changes (such as a collaboration duty and strategic cross-regulator arrangements) is a necessary first step – but on its own will not be sufficient.
Developing criteria to assess more fundamental options for policy and regulatory redesign is vital. These need to be publicly agreed and people centred.
Companies can’t sit by and wait for this to play out. Many are already exploring how they can develop “sustainable licences to operate” to proactively address disruption and demonstrate their trustworthiness. This requires turning talk on social and environmental commitments into action, shaping corporate culture, governance and board agendas.
Sustainability First’s Fair for the Future Project “Sustainable Licence to Operate” strawman proposes this is built on: public purpose and values; making the best use of capital through competition and collaboration; step changes in engagement to realign roles and responsibilities around fairness; and company and sector strategy and narratives. We are currently testing our proposals with stakeholders. This iterative process should highlight where more radical redesign is needed.
Leadership is crucial. The architect of the New Deal also reflected: “A smooth sea never made a skilled sailor.” All our nautical abilities are about to be well and truly tested.