There are many discussions these days in the business community on LinkedIn, facebook, and other places around the question: what will it take for business to change the way it operates and become a driver for change for sustainability? For those interested in participating in these discussions the ‘Sustainability Professionals’ LinkedIn group is a great starting place. In the upcoming Corporate Sustainability training with the Mauritius Institute of Directors taking place on 10 February 2014 we will discuss this as well.
The purpose of this article is to provide a brief overview and useful resources for raising awareness about our current sustainability challenge and the leading role that business can play to drive change for sustainability. We have noted that many people are skeptical that businesses will make the deeper changes required for sustainability, unless forced to do so through regulations and penalties. Results from the recent Sustainability’s Next Frontier- MIT Sloan Management Review shows that while close to 90 percent of respondents believe that sustainability-oriented strategies are essential, only 40 percent reported their companies were “largely” addressing them. This survey also revealed that despite a growing understanding about sustainability issues, including for instance climate change issues, only a very small minority of 9% of the respondents believed that their companies are prepared for climate change risks.
BUSINESS AS USUAL – WHERE ARE WE HEADING?
According to the recent 2012 UNEP report – GEO5 Global Environment Outlook: “The currently observed changes to the Earth System are unprecedented in human history. Efforts to slow the rate or extent of change – including enhanced resource efficiency and mitigation measures – have resulted in moderate successes but have not succeeded in reversing adverse environmental changes. Neither the scope of these nor their speed has abated in the past five years. As human pressures on the Earth System accelerate, several critical global, regional and local thresholds are close or have been exceeded. Once these have been passed, abrupt and possibly irreversible changes to the life-support functions of the planet are likely to occur, with significant adverse implications for human well-being. An example of an abrupt change at a regional scale is the collapse of freshwater lake and estuary ecosystems due to eutrophication; an abrupt and irreversible example is the accelerated melting of the Arctic ice-sheet, as well as glacial melt, due to an amplification of global warming Outlook.” (p.6)
For those who are interested to learn more about the relationship between eco-system services and human wellbeing, and climate change impacts we recommend the following resources:
- The Millennium Ecosystem Assessment assessed the consequences of ecosystem change for human wellbeing. From 2001 to 2005, the MA involved the work of more than 1,360 experts worldwide, read more here.
- Business Industry Sector Perspectives on the Findings of the Millennium Ecosystem Assessment.
- The 2012 World Bank Report – Turn down the heat; why a 4 degree warmer world must be avoided.
- Climate Communication Science & Outreach.
With regards to Climate Change, we have already committed ourselves to a two degree rise in temperature by 2050 and we are currently heading for four degrees rise in temperature by the end of the century with the ‘business as usual’ scenario. What can we expect to happen if we continue emissions unabated? What are the impacts of a four degrees rise in temperature?
Climate change will directly impact business; catastrophic weather events for example can be devastating for business. If we now look at the human factor in Climate Change; the recent IPCC 2013 report states that: “It is extremely likely [95 percent confidence] more than half of the observed increase in global average surface temperature from 1951 to 2010 was caused by the anthropogenic increase in greenhouse gas concentrations and other anthropogenic forcings together.“
DESIGNING FOR CHANGE
If we take serious the implications of what we are causing and where we are heading, we start to understand that there is no single simple solution to the crisis in which we now find ourselves. Trying to get people and organizations to change their behavior without addressing the underlying systems of which they are part will only create marginal results at best. The time for marginal improvements are over; fundamental changes are required.
Sustainability comprises three interwoven dimensions that are necessary to address to move towards a sustainable society:
- Depletion of resources – in order not to leave future generations empty-handed;
- Environmental and ecological aspects – in order to enable present and future generations to live in a clean and healthy environment, in harmony with nature;
- Quality of life – in order to ensure human wellbeing for present and future generations.
This has lead IUCN, UNEP and WWF to define sustainable development – i.e. the process of achieving sustainability – as ‘improving the quality of life of humans while living within the carrying capacity of supporting ecosystems’.
Today, it is recognized that business operations, while they create value for society, they also have detrimental impacts on society and the natural environment. In general businesses are operating and reinforcing an economic model that is based on the extraction of natural resources and production of waste, with the final objective of increasing consumption in society. It is not without thought and merit that the World Business Council for Sustainable Development (WBCSD) has articulated a sustainable development roadmap to 2050 – i.e. Vision2050 – with decadal targets. The WBCSD notes the following in its Vision 2050 “humanity has largely had an exploitative relationship with our planet; we can, and should, aim to make this a symbiotic one”.
Human activities mediated by socio-economic exchanges (i.e. market and non-market driven) are unsustainable because socio-economic systems are not designed using the same principles as natural ecosystems. It is worth here to start with some of the fundamental principles or properties of ecosystems that make them sustainable (this implies leaving out socio-economic impacts). Ecosystems have a set of inherent properties such as circular economy, biotic and genetic diversity, thrives on solar energy, and ability to maintain the stock of natural capital, among others, that give rise to emergent properties (an outcome of innovation without design in nature) of self-renewal, self-organization and resilience that are characteristic of a system that can endure and renew itself over time – i.e. sustainable.
Human beings have designed social and economic systems that are dissonant with the principles of natural ecosystems. For instance, the conventional economic model is a linear model that is based on maximization and is not a solar economy. Since this socio-economic system is embedded in nature, there is a backlash that leads to the unsustainability of the socio-economic system that by degrading natural capital, directly undermines the planet’s ability to support the socio-economic system. Since the overall interactions between society, economy and environment is complex and non-linear, the causes and effects of unsustainable human activities are usually delocalized in time and space – i.e. there are delays between cause and effect, and a cause may have an effect elsewhere that is not visible to the agent of the cause (the latter is especially complex in a globalized economy).
Watch this video below to learn what business leaders from around the world are saying about transformational change for sustainability and the role of business:
If we are going to design for transformational change for sustainability it is key that we apply ecosystem principles in the design of institutions, processes, and systems. Those who are at the forefront of business leadership for sustainability have in common that they are (re)designing their organizations on the basis of these ecosystem principles. As has been said well by Fritjof Capra: “Organizations need to undergo fundamental changes, both in order to adapt to the new business environment and to become ecologically sustainable. This double challenge is urgent and real, and the recent extensive discussions of organizational change are fully justified. However, despite some anecdotal evidence of successful attempts to transform organizations; the overall track record is very poor. In recent surveys, CEOs report again and again that their efforts at organizational change did not yield the promised results. Instead of managing new organizations they ended up managing the unwanted side effect of their efforts…To resolve the problem of organizational change, we first need to understand the natural change processes that are embedded in all living systems. Once we have that understanding, we can begin to design the processes of organizational change accordingly and to create human organizations that mirror life’s adaptability, diversity and creativity. ” Source: Fritjov Capra, the Hidden Connections – a Science for Sustainable Living (HarperCollins Publishers, 2002), p.86-87.
For examples of corporate sustainability leadership and a new way of doing business, see the following resources below:
The B Team is a not-for-profit initiative formed by a global group of leaders to create a future where the purpose of business is to be a driving force for social, environmental and economic benefit. The B Team includes Shari Arison, Sir Richard Branson, Kathy Calvin, Arianna Huffington, Mo Ibrahim, Guilherme Leal, Strive Masiyiwa, Blake Mycoskie, Dr. Ngozi Okonjo-Iweala, François-Henri Pinault, Paul Polman, Ratan Tata, Zhang Yue, Professor Muhammad Yunus and Jochen Zeitz. Mary Robinson and Dr. Gro Harlem Brundtland are honorary members of the team.
- Sixteen global sustainability leaders seeking transformational change, the Guardian Tuesday 28 January 2014.
- A CEO Of A Bank Voluntarily Gave Up His $4.4 Million Bonus For An Excellent Reason – Business Insider, Feb. 3, 2014.
Muhammad Yunus On Defining Success With Money: ‘That’s The Wrong Way’ in the the Huffington Post of 01/22/2014
Africa: Global Leaders From Business and Civil Society Sign Zero Hunger Challenge At Davos, by Nick Zenonos on January 27, 2014
- The 2013 Sustainability Leaders GlobeScan/SustainAbility Survey.
- The 2013 United Nations Global Compact – the Global Corporate Sustainability Report.
- Six growing trends in Corporate Sustainability, by Ernst & Young in cooperation with GreenBiz Group, 2011.
- Scaling the impact of Sustainability Leadership, by Jane Nelson Director of the Harvard Kenney School’s Corporate Social Responsibility Initiative, 2013.
- Clarifying the Meaning of Sustainable Business: Introducing a Typology from Business-as-Usual to True Business Sustainability, by Thomas L Dyllick (University of St. Gallen)and Katrin Muff (Business School Lausanne), October 4, 2013.
- Nidumolu, R./Prahalad, C.K./Rangaswami, M.R. 2009: Why sustainability is now the key driver of innovation, In: Harvard Business Review, Vol. 87, No. 9, 57-64.
- Action 2020 and Vision 2050 of the World Business Council for Sustainable Development (WBCSD), see video below: