What does "doing good" mean in sustainable business?
Sustainability can serve as a convenient term to suggest "doing good." Yet, a company may not walk its talk. Understanding the distinctions can be difficult, so I've created a spectrum to use to gauge the effectiveness of a company's overall approach to sustainability.
In reality, the aim of maximum profitability and sustainability rarely and coincide. With the loophole of the concept of "externalities," companies remain able to write off entire nations of disenfranchised workers and nation-sized areas of waste in the ocean without taking responsibility for the consequences.
The atmosphere serves as one of these industrial dumping sites, leading the average climatic temperature to rise towards a danger zone. As scientists warn, cool and stable atmospheric temperatures remain necessary for our long-term wellbeing.
Challenging producers to provide ample leadership on par with the scale of their concomitant impacts requires scientifically sound targets that should frame the boundaries of profiteering. No longer can we continue living in a world where wealth and profit are granted license to destroy the global commons.
While an economic transition to environmentally and socially sustainable consumption and production may look like a process of shifting values, worldviews and paradigms, the degree of transition actually amounts to the rigor with which an organization approaches sustainability. We must hold organizations accountable for keeping high sustainability standards.
What ARE the current trendS?
As Greta Thunberg repeatedly warns, global leaders have failed to address the ecological crisis with due seriousness. However, more global efforts than ever have mobilized in recent years.
In particular, the mainstream shift moving towards integrating reporting helps to improve the transparency of an organization's commitment to sustainability. Integration from a business perspective means that your accounting and sustainability performance are fully integrated in your corporate sustainability report. In essence, profits and losses as well as the concomitant ecological or social benefits and harms would appear side by side in the same report.
For socially responsible investors, integrated reporting provides transparent choice about investing in the future longevity of businesses. While the private sector increasingly embraces a transition voluntarily, past failures have shown that voluntary ambitions alone won't provide the rapid transition needed. The science-based GHGs emission targets set by the IPCC, which involves limiting the atmospheric temperature rise to 1.5 degrees Celsius by 2050 in the next ten years, requires massive mobilization.
Government still lags behind in the nation with the world's highest GDP: the U.S, which has withdrawn from the Paris Climate Agreement. This inflexibility may be partly explained by the U.S.'s role as a leader under the current paradigm.
Our Economic transition
It helps to understand how the current status-quo operates. When we talk about "business as usual" or "the status quo" a messy combination of economic and institutional models, as well as private and political organizational actors comes to mind. However, two main defining features include industrial engineering business management principles and neoliberal economics.
Industrial engineering provides a systematic approach to the extraction of natural resources, commoditization of goods and services, the technological development of intellectual properties used to manufacture goods or facilitate services and the trade of goods and services in the global free market. Neoliberal economics includes the financialization of markets, deregulation, global competition and unfettered growth as a model.
In addition to the fact that both models promote the rapid exploitation of natural resources, they also have social consequences of wealth accumulation by a small group of people without redistribution. This concentration of wealth puts the power of influence in the hands of a relatively small group of people whose views are skewed in favor of their profit-motive by way of externalized consequences. Their profit in fact depends on shirking responsibility for their environmental and social abuses.
We're witnessing a period of increasingly unrestrained externalities such as greenhouse gas emissions, solid waste, industrial chemical disposal into waterways, and fertilizer run-offs, etc. in the name of "business-friendly" economics. Human-rights abuses are also excused in favor of profiteering.
As a result, a gross imbalance of power depends on the flawed logic of "externalities." This negatively impacts the broader human health and happiness, leads to the loss of biodiversity, which underpins our global food system, and weakens democratic institutions that promote equitable access to basic needs and legal rights in society. Our existing mechanisms of "checks and balances" are not equipped to effectively reign in these abuses.
How the SDGs support Sustainable Business
Even at the smallest scale, the aim of sustainability addresses these dilemmas in some way. The idea of business sustainability is to expand the dogma of the profit motive towards a "triple bottom line" which favors environmental, social and economic responsibility equally.
The UN Sustainable Development Goals have been defined in order to shift the ambitions of business leaders towards a better society shared by all and to more precisely define targets for companies transitioning towards a triple-bottom line. These include: (1) no poverty, (2) zero hunger, (3) good health and wellbeing, (4) quality education, (5) gender equality, (6) clean water and sanitation, (7) affordable and clean energy, (8) decent work and economic growth, (9) industry, innovation and infrastructure, (10) reduced inequalities, (11) sustainable cities and communities, (12) responsible consumption and production, (13) climate action, (14) life below water, (15) life on land, (16) peace, justice and strong institutions and (17) partnerships for the goals.
Ideally, adopting these goals as shared goals would lead to a harmonization of shared human interests and minimize the risks of the current "status quo." Yet, vague definitions and standards of measurements for these goals remains a barrier to their broad ranging adoption. Meanwhile, the continued resistance towards binding agreements on climate action is overshadowed by aggressively binding trade agreements, as Naomi Klein points out in her book, This Changes Everything. As a result, the overarching logic of aligning aims that have competing agendas (for example "economic growth" and "responsible consumption and production") may prove futile.
How firm is the current status quo?
The "status quo" holds power in that it already has observable business models in place, and these models serve as a template to either mimic or react against. As the dominant paradigm, people naturally gravitate towards “business as usual,” as they already unconsciously operate within its logic.
On the other hand, sometimes people overestimate the importance of the "status quo," or the dominant paradigm, which is a moving target. Since it isn't fixed, it is prone to the tug and pull from many sides, which fight to gain social dominance and influence. It is important to keep in mind that we are already undergoing a shift in the status quo towards sustainability, but that reactionary forces keep this progression in a state of indeterminate flux.
Sustainable Business: The Full Spectrum
Sustainability is the paradigm of the future. Whether or not your organization has an acknowledged approach, it probably still falls somewhere along this spectrum. This spectrum is meant to demonstrate how people use the term sustainability to describe things that are sometimes only minimally impacting. In contrast, they may righteously defend the status quo in order to avoid taking responsibility for social and environmental impacts. This in order from least to most rigorous in terms of sustainability, here are the ways that a business may approach (or avoid) sustainability.
Corrosive business
These are businesses that aggressively use their influence to corrode democratic institutions, exempt their business from legal and social repercussions, deny the rights of health and happiness to others and extract from and alter the state of the natural environment without limits. Such businesses perform corrosive activities that are fundamentally impacting society, government, and nature negatively. They tend to be characterized by short-term interests that have high external consequences, which they take no responsibility for.
Defending the status quo
These are businesses that cling to the status quo, refusing to adapt to the social pressure to adapt towards sustainability. They defend their profit-motive and point to job creation and growth as metrics justifying the harm they produce for the environment. They abide by laws that have been designed in favor of their operations, as proof of how they operate within the confines of socially accepted norms.
Causing less harm
These are businesses that take measures to mitigate environmental and social harm through environmental risk analysis or by implementing social standards within their supply chain. They often operate according to pressure from their stakeholders by reigning in their harmful practices and meeting a particular standard as an extrinsic aim.
Substituting good actions for harmful actions
Another strategy to mitigate damage to counteract any operational damage incurred with actions perceived as compensation for this damage, such as patronage of social projects, donations to beneficial organizations or activities, added conservation measures elsewhere, or carbon trading or offsetting. The problem with this model is that it fails to address the primary source of the negative impact. By engaging in such a balancing act, there is often little assurance that the negative impacts and added benefits ultimately counteract one another.
Doing more good than harm
Some businesses go beyond merely balancing the level of good and bad activities by acknowledging that too much harm already exists, so the business should play a remedial role. This model is sometimes called "restorative business." Businesses following this model aim to address the damage already done by past corrosive actions and focus on long-term problem solving and damage reduction. Thus, these organizations focus on doing more than enough good.
Questioning what's meant by "doing good"
Other businesses play a central role in questioning the underlying core of the problems that are incurred to question over-consumption and develop business models that benefit society through updated business models. These businesses may engage with institutions and partnerships that engage in critical reassessments of the status quo and attempt to harness the media, politicians, academia, non-profits, and other ideological institutions to heighten our broader consciousness around sustainability.
For example, businesses that change their sales model from individual ownership to subscription-based services, modify their farming to include biodiverse growing methods and fallow periods that provide the natural service of carbon sequestration or conduct a life-cycle analysis of their products to adopt a zero waste closed loop production model all perform a critical reevaluation of how business is done.
Leading the transition
This suggests both questioning the premise of sustainability, and doing more good than harm. This broad reaching vision of integrated sustainability shifts the status quo by developing new models for what's possible. Businesses take an active role through political action towards sustainability, a critical examination of the overall impacts of their core practices, and engagement with diverse stakeholders including investors, consumers, employees and suppliers. Moreover, they make real measurable changes that defy the status quo and uphold a triple bottom line. (For some examples, see these leadership trends that give me hope.)
So what?
It's important to define and communicate your approach to sustainability transparently. Sometimes businesses may assume that efficiency improvements and retrofitting efforts make their operations sustainable, when in fact, they only scratch the surface of what's possible. The broader aim is to increase business and governmental ambition to improve the rigor and depth by which we uphold the intrinsic values of healthy ecosystems and social living standards.
How does your business conceive of its sustainability mission? Leave a comment.
