A tremendous amount of progress has been made, particularly with regard to the increased awareness of climate change, water scarcity, human rights, and the need to protect and enhance ecosystems and biodiversity. As a generalization, we are wiser, ask more informed questions, and are adopting better policies in an effort to protect and enhance our quality of life. Part of this shift has been induced by the less predictable economic and political climates, as well as society’s realization to adapt to the realities of climate change. Simultaneously, we are also working to curtail our consumption of natural resources by pursuing and introducing new innovation into our lives in the forms of more efficient or transformative, products and services.That’s all good news.
Amidst progress on technology and sustainable development, something just doesn’t feel right. Call it a gut feel…a hunch…a premonition. My hypothesis is simple: For all the good that sustainability is trying to achieve, society remains at equal, if not greater, risk of significant development challenges. To be clearer, as the word sustainability takes on a more ubiquitous worldview, and as business interests, in particular, double down on their sustainable investments, it’s entirely possible that “we the people” may be blindsided by a stark reality…our credit score (with earth, and each other) is rapidly deteriorating.
Are We Defaulting on Our Mortgage Contract with Earth?
For all the good that big brands and big government are trying to accomplish, the truth is, most of it is a derivation of an efficiency/growth algorithm: use resources more efficiently, but sell more stuff to make up for the difference. The net result: higher margins (if done right) and growth for business, but ultimately continued negative impact on human health and the environment.
Incremental improvements in efficiency and resource optimization will get us only so far. To achieve prosperity that is balanced with nature we need radical shifts in how we conserve natural resources, consume products and services, and reconcile our values and behaviors with ideals of success and living.
Humanity has, in effect, a mortgage contract with earth. We’re playing with financial capital gained by gambling natural capital. In the process we’ve put not just a few livelihoods at stake, but more important, the health and vitality of the planet and all of humanity. Are we paying down on our mortgage effectively, or simply refinancing our current lifestyles and rate of consumption?
Are we setting ourselves up for a cascade of failures, much like the way collateralized debt obligations (CDOs) were manipulated and led to the mortgage industry collapse and financial sector meltdown in 2007?
The Evolving Social Contract of Business
Today, the world’s biggest companies are pursuing sustainability as a deliberate business strategy. Forty years ago, businesses needed to be told, and regulated, not to dump chemicals out the back door. Companies are now going beyond compliance and working hard on eco-economic operational improvements including integrating leaner production practices into their manufacturing operations to drive water, energy, and waste reductions. The best companies are also taking efforts a step further by innovating new products that consume fewer resources and produce less waste throughout their life cycle. This is excellent, but still represents a consumption-based model driven by efficiency gains that seek to extend resource utilization.
Most global corporations have something happening by way of sustainability. To stay relevant, respected, and reputable – they’ve had to. Corporate sustainability has been working toward a common language. Driven by third party financial rating agencies and organizations including the Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), and the Carbon Disclosure Project (CDP), corporate sustainability reporting has become more consistent, transparent, and comparable.
As more global companies follow the guidelines and frameworks of SASB, GRI, and CDP than ever before, one has to ask, do these frameworks designed to foster greater transparency to investors, regulators, shareholders, and the public provide the full picture? The short answer is no, of course not. These frameworks were not intended to be all–inclusive analytical summaries of the planet’s vitality.
But is this enough? As business models transition toward sustainability, one might assume that human health and the environment must be improving in-step. But according to most global indicators, we are not improving at the speed or scale necessary to shift humanity toward sustainability.
As institutional investors, in particular, put more credence into these frameworks (and perhaps strategically invest more capital into certain companies and sectors), the question on whether are we looking at the right data points takes on a different context. In short, do we run the risk of not seeing the forest through the trees? Ultimately we may have a fundamental issue with the highly subjective definition of sustainability versus how investor-defined sustainable businesses are effectively valuated and rewarded for their performance.
Part 2 will be published tomorrow
Mark Coleman is a recognized voice, business advisor and consultant on the convergence of sustainability, environmental stewardship, energy, technology, and innovation.
Mr. Coleman is an active blogger with the Huffington Post, and has published numerous articles with leading organizations including GreenBiz.com, Environmental Leader, Triple Bottom Line Magazine, among others.
Mr. Coleman is the President of Convergence, Mitigation, Management (CMM) LLC, which provides custom business intelligence and advisory services for business, government, applied research, not-for-profit, and non-governmental organizations.
Mr. Coleman has advised hundreds of organizations in the areas of sustainability, risk, innovation, operational effectiveness, and business strategy. Much of this work led Mr. Coleman to write and publish two books, Time To Trust: Mobilizing Humanity for a Sustainable Future (Motivational Press 2014, www.timetotrustbook.com) and The Sustainability Generation: The Politics of Change and Why Personal Accountability is Essential NOW! (SelectBooks 2012, www.thesustainabilitygeneration.com) both of which highlight his perspective on holistic systems-level logic and theory for advancing humanity beyond the status-quo toward more integrated and mutual models of sustainable development.
Mr. Coleman currently serves on the board of the Sustainable Manufacturer Network (http://sustainablemfr.com/), and on the board of a not-for-profit organization, B9 Plastics (www.b9plastics.org) involving global water development concerns.
Mr. Coleman resides in the Finger Lakes region of New York with his wife Aileen and two sons, Owen and Neal.