Today, following the momentous election of yesterday, the WSJ published an op-ed piece by Al Gore and David Blood, identified by their roles in their investment management firm, Generation Investment Management. The last few paragraphs carries the main message.
Sustainability and long-term value creation are closely linked. Business and markets cannot operate in isolation from society or the environment.
Today, the sustainability challenges the planet faces are extraordinary and completely unprecedented. Business and the capital markets are best positioned to address these issues. And there are clearly higher expectations for businesses, and more serious consequences for running afoul of the boundaries of corporate responsibility. We need to return to first principles. We need a more long-term and responsible form of capitalism. We must develop sustainable capitalism.
They are absolutely correct in pointing to the critical linkages between “businesses and markets and society and the environment.” But as long as we start from the fundamental concept of a world apart and separate from us, we are inexorably drawn towards a world-view that ignores the interconnectedness.
They are right on with a call for more responsibility and a long-term outlook. But they offer no suggestions as to how to exchange these values for exactly the opposite set that has gotten us into this trouble. And the phrasing of sustainable capitalism is identical with sustainable development. The focus is on the noun, and suggests that sustainability can be attained simply by tinkering with either capitalism or development.
Without arguing against capitalism, we need to design a new form of capitalism that starts with a vision of sustainability, far beyond replacing dirty, finite energy resources with renewable, clean technology. This suggests that we must go beyond criticizing cultural issues like responsibility or short-sightedness, and get serious about restructuring the capitalist political economy to reflect exactly what Robert Kennedy was talking about, as quoted in the article.
Forty years ago, Robert F. Kennedy reminded Americans that the Dow Jones Industrial Average and Gross National Product measure neither our national spirit nor our national achievement. Both metrics fail to consider the integrity of our environment, the health of our families and the quality of our education. As he put it, “the Gross National Product measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to country. It measures everything, in short, except that which makes life worthwhile.”
Investment in innovation is an essential part of turning back the tide of unsustainability. But unless we focus also on the innovation of a new set of beliefs and values as well as of technology, we are going to find the search for sustainability will lead us down many blind alleys.