Business and Sustainability: Still Not Getting It

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Deloitte recently published a survey of business sustainability aspirations and practices. Titled, "Sustainability in business today: A cross-industry view," the report showcases the responses from businesses in a wide range of sectors. Deloitte's header highlighted the following arguments for paying attention to sustainability: "Increasing regulation, investor activism and changing consumer behavior have increased the importance of “going green.” Not a whisper about the state of the world. I get from this that business lives in a corporate cocoon with its sensors tuned only to those that affect its bottom line or stockholder value (or more likely, the salary of its CEO). What about the world outside? Environment health and justice are more than mere words. They are observable things, just like investor satisfaction. Business will do little of serious impact toward sustainability until it sheds its security blanket and connects to the real, hurting world out there.

One part that I found particularly interesting was this list of various definitions being used by business.

Q: How would you define sustainability as it relates to business? Respondents told us:

“We have used the Brundtland definition at times and a triple-bottom-line type of thing, but we talk about sustainability in terms of resources - financial resources, human resources, and natural resources. Because we are a user of natural resources and wood and fiber, most of our focus is in that area.” (Respondent from a process and industrial company)

“We term it as having the minimum impact on the environment. There is a social component to that as well, but we are currently focusing on environmental sustainability.” (Respondent from a consumer products company)

“For us, sustainability is just doing business right. We believe that it is a foundation that contributes across the entire value chain. We believe that it gives us a competitive advantage by applying it in acquisition, in branding, and in marketing and development.” (Respondent from an automotive company)

“We have been careful to define it as environmental sustainability for the purposes of our team’s existence.” (Respondent from a consumer products company) “The long-term health of the business requires that we consider things beyond financial return - such as environmental performance and social responsibility and community relations.” (Respondent from a consumer products company)

“We go to the Brundtland Commission report of 1987 to start the conversation, and then take it down a level to make it more operational in nature, and then down one more level [to] land, air, water, and people.” (Respondent from a consumer products company)

“Continuous reduction of our environmental footprint throughout our own facilities and our value or supply chain. We also define it from a social perspective as making sure that the community in general, and certainly communities where we sell products, are viable and healthy and that their needs are met.” (Respondent from a consumer products company)

I start with a heavily prejudiced position about the failure of business as a whole to grasp what sustainability is fundamentally about, so it's no surprise that I find these "definitions" largely empty statements, even to the point of banality. What a shame. The best that these definitions promise is that the world will not get any worse than it is, but even that is unlikely, given the reference to the Brundtland formulation and its roots in eco-efficiency. Doing less bad through eco-efficiency is little more than a race against economic growth. Growth is certain to win.

All this begs the question of what if we are already overusing the Earth's capacity to support our species. Notwithstanding the various deniers of global warming and other current and impending system failures, students of the global ecology have ample evidence that we are already exceeding one earth's worth of capacity, and are heading for as many as four as China and India ramp up their economies. Inequality and injustice are all too prevalent in many parts of the world. The tacit argument I would expect to get in an extended discussion with any of the people quoted above is that we are just following Adam Smith's (pictured above) model of the most efficient economy, serving the self-interest of our customers and stockholders.

I doubt that that is really true in any case, but it simply doesn't work when things absolutely needed like fish or water or clean air or health or safety and so on by all these "interests" are physically scarce, not merely scarce in economic terms. Ironically the award of the latest Nobel for Economics to Elinor Ostrom was a begrudging acceptance of the need to develop different governance mechanisms for the finite life-supporting resources we rely on for sustaining ourselves. The simplistic, Smithian governance model lying underneath everyone of the definitions above simply doesn't work any more. But by mouthing these platitude without any sign of reflection or vision beyond the bottom line, business remains part of the problem, not the solution.

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