Sustainability is Proven Better Business

February 21, 2014

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Hunter Lovins in Natural Capitalism Solutions:

It’s become weirdly fashionable to criticise companies cutting their impact on the environment and implementing more sustainable practices as insufficient.

A recent piece by Charles Eisenstein claimed: “Let’s be honest: real sustainability may not make business sense.”

That’s just wrong. More than 50 studies (PDF) from the likes of those wild-eyed environmentalists at Goldman Sachs show that the companies that are the leaders in environment, social and good governance policies are financially outperforming their less sustainable peers. Sustainability is better business –and we can prove it.

Richard Smith in “Green Capitalism: The God That Failed”, gets it even more wrong. He asserts: “The results are in: no amount of ‘green capitalism’ will be able to ensure the profound changes we must urgently make to prevent the collapse of civilisation from the catastrophic impacts of global warming.” He calls for “abolition of capitalist private property in the means of production and the institution of collective bottom-up democratic control over the economy and society.”

Eisenstein’s critique stems from not believing corporate masters are sufficiently spiritual for his taste. I’d argue he’d be surprised at the deep sense of stewardship with which many approach their sustainability commitments. Smith’s Marxist aversion to any form of capitalism makes his assertions silly. It’s easy to pick outrageous corporate behaviour and allege that no form of capitalism can deliver a world that, in Bucky Fuller’s words, “works for 100% of humanity”. Conversely, it would be equally easy to cite decades of environmental and human rights travesties perpetrated by communist governments.

Verbal ping-pong like this reminds me of David Brower’s observation that when the environmental movement is in trouble it circles the wagons and shoots in.

The interesting question that neither critic tackles is that without serious corporate action to implement more sustainable practices, what is it going to take to solve the challenges threatening life (PDF) as we know it?

Rick Ridgeway of Patagonia eloquently describes the temptation to despair, noting that, despite the world’s largest companies implementing more sustainable practices, “every global indicator of the health of our planet has continued to trend in the wrong direction”.

We’ve often asked each other: what is a strategy of change that can tackle the gnarly challenges fast enough to make a difference? That said, Rick’s sticking with Patagonia, and serves with me on the sustainability advisory board of Unilever North America.

Are companies doing enough? Of course not. Do we need government involvement? Of course, and it would be nice if we had functional governments. None of us are doing enough. But, without the sustainability commitments of companies, we’d be in far worse shape.

Smith challenges business advocates to come up with a plan. OK, here’s one.

In my book, The Way Out: Kickstarting Capitalism to Save Our Economic Ass, I argue that we should assume climate chaos is a hoax. Because we know how to solve it at a profit, doing it will make you a lot of money. If it turns out to be the most serious problem facing humanity, solving it will still make a lot of money. Either way, let’s go. We can argue over the science later. WWF and CDP showed that, if businesses cut carbon emissions by an average of 3% annually, they’d save up to $190bn in 2020 alone, or $780bn over 10 years. McKinsey agrees, but puts the number to be saved eliminating carbon waste at $2.9tn annually.

Let’s entrepreneur our way out. Some of my graduates created a company,Eos Climate, to turn refrigerant gasses from particularly nasty greenhouse drivers to corporate assets, worth tracking in a chain of custody, recycling and ultimately destroying. Every step saves or makes money. Doing it would cut 17 giga-tons of carbon equivalent per year from the US economy, precisely the amount we need to get back to 350 parts per million CO2 concentration.

Or Jigar Shah‘s call to entrepreneur 100 businesses of $100m in renewable energy for a $10tn economy, displacing that 17 giga-tons.

All this buys time to enable us to implement what my investor friend John Fullerton calls the regenerative economy. His Capital Institute’s Field Guide to Investing in a Regenerative Economy profiles better businesses that are truly regenerative.

I’ll stake a wager that over the next decade companies will do more to cut carbon emissions than advocates for enhanced consciousness or collective governance. It’s irresponsible to reject opportunities to cut environmental impact and enhance human wellbeing simply because they boost business metrics. It’s fine to argue for alternative politics or greater compassion, but, for those of us in the trenches, I’ll take my spirituality in a more applied form and a good capitalist over a bureaucrat any day.

39 Responses to “Sustainability is Proven Better Business”

  1. adelady Says:

    rayduray
    “However, I am well aware that such a statement is considered entirely politically incorrect as well as racist.”

    It’s not so much un-PC or racist as straightforwardly wrong.

    Start with Hans Rosling http://www.ted.com/talks/hans_rosling_religions_and_babies.html

    … and from there you have your introduction to Gapminder. All UN statistics gathered into a very user friendly package.

  2. rayduray Says:

    Hi adelady,

    Re: It’s not so much un-PC or racist as straightforwardly wrong.

    Hmmm, I’m not exactly sure what you are getting at. Certainly Hans Rosling is a very clever statistician and one of the most charismatic of the breed. But showing 10 billion people in ten shoe boxes is a bit disingenuous, do you agree? His presentation trivializes the fact that less than 2 billion of the current 7.2 billion persons on this planet have first world standards of food security, sanitation and personal safety. When we add 3 billion more mouths to feed on this planet, Hans Rosling is not going to tell you about the impact this will have on hellish traffic jams in Lagos, Jakarta or Bangkok making it less and less possible for any but the elites to make a decent living.

    Or how about the situation in Mumbai where tens of millions cannot enter the local river because it is an open sewer?

    Sure, the population can grow. But my point is that the only thing to be achieved with a drastic increase in human population is a drastic increase in human misery. And what, may I ask you, is the point of that?

    In passing, I would like to point out that while I admire Hans Rosling for his skills at explaining things, I also consider him something of a shill for the “business as usual” way of viewing the world. I would tend to believe that Rosling sees 3 billion new mouths to feed as an asset for the corporations. I tend to see these 3 billion new garbage-creators as a liability to the living planet. For example, Lagos currently creates 10,000 tons more waste per day than it can process/recycle/landfill. The result is a population drowning in waste. And yet Lagos is one of the major growth centers of the future population explosion. How’s that going to work out for them?

    I find Rosling quite disingenuous by means of omission. For example, one of the most dramatic impacts on human population in the past 40 years was the imposition of the “one child” rule in China in 1979. http://en.wikipedia.org/wiki/One_Child_Rule If we were a wise and sensible species, we would impose something like this across the planet, universally. The alternative is to continue to generate such dysfunctional developments as worldwide slums where subsistence is extremely tenuous, security is almost unheard of, black markets create massive prison populations, vast numbers of people become urban refugees while bribed authorities create sport venues such as occurred in Beijing, London and currently across Brazil due to catering to rich sports leagues such as FIFA and the Olympics Committee. The millions of displaced are never provided for. They are just shoved out of desirable urban settings.

    If your point is that 10 billion of us struggling to survive is inevitable, you have not stated that case very convincingly. My position is that a better world is possible. And where it starts is with rationally attending to the grotesque over-population (over-poop-ulation?) of this planet by our species to the detriment of every other species as well as to the detriment of our own well-being and happiness.

    YMMV, as they say.

  3. climatebob Says:

    We can save the World but it requires a lot of cooperation and at the moment that is sadly lacking. Not many people think we have a crises. We have put a huge pulse of CO2 into the atmosphere and have know real idea what that is doing to do to us. We know the big numbers http://globalwarmingsimplified.weebly.com/ but the detail is still uncertain.
    We could feed eight billion if were are careful but I suspect that it will be more like Syria.

  4. adelady Says:

    “For example, one of the most dramatic impacts on human population in the past 40 years was the imposition of the “one child” rule in China in 1979.”

    And finished up with a grotesque sex and age balance as a result. Why? Because the same people who could impose one child per family rules across a huge country couldn’t think of modifying social conditions and expectations in a sensible way that would become a lasting change. The biggest issues, apart from favouring boys over girls, are that they did absolutely nothing about the social preference, bragging rights, or whatever you want to call it that goes with 4 generation families in China at the same time as doing absolutely nothing about the overt discrimination and mistreatment that women experience in education and the workplace – including the professions – as well as in private life.

    So women got educated enough to “marry well” if they were in that social class, or to get a job with a reasonable income otherwise. They would then marry as soon as legally possible (depending on the age and other restrictions in their area) and set about producing their one and only child as soon as possible after that marriage so that their grandparent/s could have a great-grandchild photo opportunity.

    “His presentation trivializes the fact that less than 2 billion of the current 7.2 billion persons on this planet have first world standards of food security, sanitation and personal safety.”

    I take it you’ve not seen his best known talk then. http://www.ted.com/talks/hans_rosling_and_the_magic_washing_machine.html

    I have a very different view of his approach. He tries to be entertaining – because it helps to soften the pretty grim underlying messages. Firstly, if you watch a few of his videos you’ll see that he’s waaaay too far on the socialist side to be palatable to more than a few Americans. And he is absolutely unrelenting in his advocacy for education generally and for education of women and girls in particular – which is not regarded very favourably in many of the countries where he spent most of his career.

    He’s basically telling the rich of the world, us, that we’re lucky and that we shouldn’t be so greedy and selfish. At the same time, he’s telling the poor countries of the world that they’re on the road to nowhere if they don’t educate themselves and treat their womenfolk better.

    How do you think he’d get on if he said that it was now the adult men of the world’s turn to carry the water? Or even that they should take turn and turn about with the women and children in carrying water?

    No. He describes societies as they are and circumstances and attitudes as they are. He leaves it to the rest of us to work out the inferences and implications. He’d never get a repeat invitation to most of his client countries and organisations if he told them what to think rather than giving them food for thought – food of his choice and his preferred flavours.

    • rayduray Says:

      Thanks adelady,

      For one of the most thoughtful and articulate comments I’ve seen on the Internet, not just at Crocks-R-Us. 🙂

      Everything you say is something I can basically agree with. Yes, the sexual imbalance in China is a problem. Yes, Rosling is better than Stalin at getting people to feel comfortable with a message. Though I dare say the Stalin approach also got jobs done. {wink}

      ***
      Re: The Magic Washing Machine —

      Yes, you assumed correctly. I had not seen that TED presentation. Though I would have to wonder if this truly is his most popular video. Here’s another that seems to have attracted a much larger audience, and is another wonderful testimonial to human progress:

      Not to quibble about whether or not washing machines have universal appeal to men who have no interest in laundry because they have wives, let me say that I’ve found something that intends to go head-to-head with TED curator Chris Anderson and his vision of 15 minute enlightentainments. The Onion Talks people have decided to evolve/push into the head-space and see what they can get to stick to the magic (heads-up-display) screen:

      http://www.newyorker.com/online/blogs/culture/2012/10/the-onion-tees-up-ted-talks.html

      Thanks again for a lovely tête-à-tête. 🙂


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