Saving Business from Itself

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Traders on the New York Stock Exchange.

thetaxhaven/Flickr

Is the business community its own worst enemy? That was my takeaway from a recent post on FastCompany’s blog. In it, Joss Tantram makes the provocative argument that trade -- “rights of enterprise, private trade and market activity” -- is a fundamental human right.  But he also notes that that right is increasingly at risk, given the market’s failure to address the disruptive effects of global warming and other environmental challenges. 

“Trade as we have known it is endangered,” Tantram writes. “Clear trends in demographics, urbanization, water quality and availability, climate stability, resource scarcity and ecosystem health represent risks to the continuation of trade as usual.”  He suggests changes to trade law, policy and regulation that remedy the problem.

I agree with Tantram. Mostly. Trade is the lifeblood of the world economy and the engine that enables people to live better lives. And, yes, systems of commerce are increasingly at risk due to self-inflicted social and environmental wounds.  So we do need new public policies to ensure future prosperity. 

It's also true that a growing number of businesses are keenly aware that environmental threats are also threats to the bottom line.  As Tantram notes: 

“A growing number of companies …recogniz(e) that their longevity relies upon the health and vitality of natural capital and the continuing stable functioning of natural systems, have developed plans to transform their production activities to become sustainable.”

So far so good. But I don’t think Tantram’s diagnosis or his cure, are precise enough. The real question to ask is: can business save itself from itself?

In fact, despite the progress that has been made, the primary obstacle to enacting policies that will safeguard the environment and protect the “right to trade” is still the business community and its allies. Far too frequently, their knee-jerk reaction to proposed environmental policies is to try to kill them.  Or, nearly as bad, many executives will sit on the sidelines while their more aggressive peers disrupt meaningful, system-wide action.

In the very worst  cases, companies speak out of both sides of their mouths. Publicly, they maintain the importance of sustainability; privately, they apply money and influence to thwarting meaningful action – often by undermining sound science (as detailed in this report by Union of Concerned Scientists).  

We’ve come a long way in the past decade.  Environmentalists have gone from being seen as the enemy in corporate boardrooms to trusted advisors.  As a result, there are many exciting initiatives underway at corporations around the world aimed at tackling critical environmental problems.  But we cannot continue to pretend that voluntary programs alone are sufficient to solve the scope of the challenges we face.  

Over the next decade, being a business leader (or a leading corporation) will mean helping to shape smart government policies that preserve ecosystems vital  to the continued profitability of business itself.  It will also mean taking a more aggressive role in overriding those voices within the business community that wish to maintain the status quo.

Business leadership of this sort is one of the critical elements to meeting the global threat of climate change. The stakes are high: our systems of global trade and the ecosystems life depends on hang in the balance. 

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Andrew Hutson

Andrew Hutson

Andrew, Environmental Defense Fund's director of global value chain initiatives, applies insights from supply chain management to drive environmental change with our corporate partners, advancing sustainable business practices throughout their operations.

 

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Comments

Dear Andrew,

Thank you very much for this response to my FastCoExist piece.

It was intended to prompt some discussion and debate - and also to provoke us into finding new angles by which to drive change to a sustainable world.

The intent behind the idea of the Rights of Future Trade is to explore and exploit the dissonance between the emerging recognition of the need for radical change from leading progressive businesses and the general rules of trade and competition law which promote a business-as-usual likely to undermine such aspirations.

I do agree that lobbying against higher standards or even Janus-like speaking from two different mouths is a real and abiding challenge to achieving a sustainable world. However, I try to be positive about negative things in my blogging - as Thomas Hobbes 7th Law has it:

“…look not at the greatness of the evil past, but the greatness of the good to follow.”

...as you will see if you look at the full version of the piece here: http://www.terrafiniti.com/blog/the-rights-of-future-trade/

It is exactly because of the behaviour that you highlight (that of lobbying for lowest common denominator regulation) that I thought it would be interesting (fun) to introduce a possible motivation for companies to do exactly the opposite – to lobby for sustainable enterprise because unsustainable trade and enterprise represents a restraint on long term trade.

The article (and the concept of the Rights of Future Trade) seeks to do the following:
• To see if an aspect of the infrastructure of enterprise and trade rules could be “hacked” to produce sustainable outcomes and;
• To raise the idea that businesses with truly strategic sustainability intent must start to work to change the rules by which all business must operate.
As you say, the stakes are high and we deserve business which does not cost the earth.

Best regards,

Joss

Joss,
Thank you for the thoughtful reply. I was inspired by the big picture thinking of your piece – not just about behavior of individual companies, but by the prospect of changing the “rules of the game.” In my view, these rules will indeed change. It’s really up to company leaders to decide whether they’ll be winners or losers as they do – or as mother nature changes them for us. Businesses who figure out how to operate within the system of natural constraints and challenges, and in many cases help solve the problem, will be the winners in the 21st century. Companies that don’t figure this out won’t be around in 30 years. The big question is whether or not they’ll take us down with the ship if we don’t get our collective act together in time. But, the optimism we share makes me believe we’ll turn this streamliner around.
Andrew

Dear Andrew,

Really appreciate your reply, and share your (guarded) optimism.
I believe that, whilst the tide is currently running against achieving a sustainable world, the seeds of a sustainable future are also present – in both the behaviour of engaged and progressive companies, and also in the potential for “hacking” a number of mores and mechanisms which define the current models of capitalism.
It could be considered that humanity is currently in the “golden hour” - where we have the knowledge, insight and capacity to respond to global challenges before it is too late for preserving those aspects of modern capitalism that many of us value and depend upon. I make some suggestions as to how we might “evolve” from Homo sapiens to Terra sapiens here: http://www.guardian.co.uk/sustainable-business/blog/are-we-fit-stewards-...

On remaining optimistic for a sustainable future, last year I also produced the following: http://www.guardian.co.uk/sustainable-business/sustainable-world-before-...

Best regards, good luck and thank you again,

Joss

Joss and Andrew I appreciate your input for "Saving Business from Itself". I never considered myself as an environmentalist; However, as I grow older it is easy to see that our natural resources are in need of respect and protection, now and for future generations.
I have experienced first hand the "Janus" effect Joss mentions in his reply. In the last 10 years I have been involved in an area of transportation research that I doubt even the two of you are aware of.

There is an on going fight for what will fuel the future of corporate transportation to move freight and people.
Some are pushing for electric while others are looking to Propane, CNG, LNG, and Bio-fuels. For the foreseeable future the choice is and will be diesel.
My observations do not deal with the specific fuel itself, but how it is actually dispensed. Gasoline has been mitigated with vapor recovery (VR) and on-board refueling vapor recovery (ORVR), but diesel and even bio-diesel are still dispensed in a manor that involves incremental vapor loss and overfill spills that regularly contaminate air, soil, and water. This is a global occurance

Catastrophic releases are easier to deal with and recognize than incremental releases. Catastrophic is an "event" that gets press and is dealt with quickly. Incremental goes unnoticed, but over time creates a significantly larger problem to remediate.

MTBE as an example, was an additive to make gasoline burn more efficiently, and was mandated for widespread use. The incremental release of this water soluble chemical caused pollution of fresh water reservoirs including the Great Lakes and forced the EPA to queitly ban the product that was meant to clean up the environment.

I bring this up because history has a way of repeating itself if we don't learn from it. We are still dispensing fuels in the same way as the MTBE problem became evident and we are now promoting the use of far more water soluble fuels in the form of Ethanols and methanol based bio-diesels.

I have proposed a method which captures the aerosol and overfill spills for all liquid fuels that surpasses the technology of Stage II VR as well as ORVR in a simple mechanical process. The process is a closed loop that captures usable fuel, prevents pollution, and significantly reduces occupational exposure.A win for corporations as well as environment.

So whats the problem? In attempts to present this "hydrocarbon capture" concept to Government agencies, industry, and environmental think tanks, it has been met with "deer in the headlight stares".
.

The Janus effect? So many people and organizations "demand" change toward environmental and corporate social responsibility, but when a viable concept is brought forth, there is substantial resistance to reccognize it , let alone embrace it.