How big is the sustainability challenge for business?

This article was written by Dr. Katrin Muff, Dean of Business School Lausanne.

The most recent Living Planet Report (WWF, 2010) highlights the fact that already today, we are using resources that account to what 1.5 planets can sustain, up from 1.3 planets just 3 years ago. If current practices and consumption continued, we would need 2 planets by 2025, brought forward from previously 2 planets by 2030. Our current behavior, nothing new here, is dangerously unsustainable. One wonders how we can pretend having more than one planet we can live on!

By 2050, we will be sharing our planet with some 30% more people totaling a world population of some 9 billion. While this perspective of billions of new consumers who will want homes, cars and TV sets, may be a source of joy for the entrepreneurial-minded spirits among us, the shrinking resources and potentially changing climates present a limitation for all the 9 billion of us to maintain or attain the consumptive lifestyle that defines today's affluent markets.

The WBCSD Vision 2050 (World Business Council for Sustainable Development: Vision 2050 – The new agenda for business) describes the desire for a planet with a population of 9 billion people to be "living well and within the limits of the planet". The vision outlines a critical pathway with clear measures to ensure a world on-track towards sustainability by 2050. It highlights a number of significant changes and improvements required to get there, whereby behavioral change and social innovation are as crucial as better solutions and technological innovation.

For the WBCSD, this critical pathway includes the following elements:
    •    Developing radically more eco-efficient lifestyles and behaviors and solutions to enable education and economic empowerment for billions of peoples, women in particular.
    •    Incorporating the cost of externalities, including carbon, water and ecosystem services.
    •    Doubling the agricultural output without increasing the amount of land or water used.
    •    Halting deforestation and increasing yields from planted forests.
    •    Halving carbon emissions world-wide, and providing universal access to low-carbon mobility.
    •    Delivering a four-to-tenfold improvement in the use of resources and materials.

So what is the "sustainability challenge" all about? The sustainability challenge, simply put, represents the challenge for us, as a global community, to ensure that we together return to be "living well with the one and only planet we have". This challenge is significant given that right now, we are far beyond this basic premise, using resources of 1.5 planets with the roughly 7 billion world citizens we represent of which many aspire to a lifestyle that would lead us to need to have resources of 2 planets available by 2025 if we continue as we do right now. This does not include the fact that we can expect to be some 9 billion citizens by 2050, with an increasing appetite for our consumptive lifestyle that we seem to take for granted.

Given where we are today and how ineffectively the legislative frameworks have managed to safeguard the planet from our consumption-oriented aspirations, I question the effectiveness of the many significant, yet often sadly compromised, efforts of many concerned players to set-up and enforce legislation we can rely on to address the sustainability challenge. I would challenge that unless business embraces the sustainability challenge as its key contribution to fulfill its responsibility to serve society and the planet at large, we are unable to turn-around the one-way track we are all on. It is this premise that serves as the foundation of this effort to develop a definitional framework in order for business to act and start becoming part of the solution towards addressing the burning issue the planet and with it we all as global citizens face.
 
How good are companies at this thing called sustainability?
Only a minority of companies today are acting decisively in favor of embedding sustainability in their business with the majority of "sustainability action" undertaken to date limited to those necessary to meet regulatory requirements (BCG Report 2009). The report is based on a global survey involving 1500 corporate executive and highlights that despite the fact that there is a strong consensus in corporation world-wide that sustainability is having a material impact in how companies think and act, 70% of corporate executives say that their company has not developed a clear business case for sustainability.

"Sustainability is a bit like teenagers and sex: lots of teenagers are talking about; only some are doing it; and the ones who are doing it aren't doing it well."-- Baroness Barbara Young, former head of the UK Environment Agency

Enabling business to become good at sustainability has become an urgent priority given where the world is heading. The WBCSD Vision 2050 sets the standard of the challenge ahead of us. Most importantly the report stresses the interconnectedness of issues such as water, food and energy and points out that these relationships must be considered in an integrated and holistic way. Both management and business educators as well as business are required to step-change to contribute to these challenges.

Trends to watch in sustainability

Welcome to BSL's news and updates on sustainable business. 

Everyone affects the sustainability of the marketplace and the planet in some way. The reason we created a blog dedicated to the topic of building sustainable business, is that BSL wishes to support students, sponsors and relations as much as possible to make the future sustainable. A sustainable business can create value for customers, investors, and the environment. A sustainable business meets customer needs while, at the same time, treating the environment well.

According to wikipedia, a sustainable business is an enterprise that has no negative impact on the global or local environment, community, society, or economy—a business that strives to meet the "triple bottom line"  of benefiting people and the planet, not just going for profit. 

Often, sustainable businesses have progressive environmental and human rights policies. In general, a business is described as "green" (more than just sustainable) if it matches the following four criteria:
    1.    It incorporates principles of sustainability into each of its business decisions.
    2.    It supplies environmentally friendly products or services that replaces demand for nongreen products and/or services.
    3.    It is greener than traditional competition.
    4.    It has made an enduring commitment to environmental principles in its business operations.

Building a sustainable business involves a process of assessing how to design products that will take advantage of the current environmental situation and how well a company’s products perform with renewable resources. Sustainable businesses with a supply chain try to hit the triple-bottom line by using sustainable development and sustainable distribution to impact the environment, business growth, and the society.

Over the past years, a few pioneers have led the way in the design of sustainable business. 

One of the most important companies to know about in this arena is MBDC (McDonough Braungart Design Chemistry, LLC), a global consultancy helping clients create a positive footprint on the planet by implementing the so-called Cradle to Cradle® framework. This framework has been formalised as an internationally acclaimed Cradle to Cradle sustainability certification for business, which shows the global industry’s deepening commitment to re-think and re-design products and processes for human health, environmental health and recyclability. MBDC’s international client base includes companies in Spain, Germany, Italy and Japan, Chinese urban developers, and clients like Nestle Waters North America, Method Products, Kiehl’s Since 1851, Aveda Corporation and Van Houtum Papier BV.

Last year, MBDC certified more than 100 products, bringing the total number of products certified to more 300 since the program launched in late 2005. Lauded by governments and industry around the world, more and more companies are going for Gold-level certification, Cradle to Cradle’s second highest level of achievement, which implies that product manufacturers have eliminated chemicals assessed by MBDC to be a high hazard to human and environmental health, and final assembly processes are powered by 50 percent renewable energy. 

“Over the past year, we’ve noticed more companies coming to MBDC because they see an opportunity to be recognized as leaders in sustainability from governments and NGOs, but also by consumers,” said Jay Bolus, VP of Technical Operations at MBDC. “Even in challenging economic times, sustainability is becoming more central to their way of doing business, and they’re willing to put in the work.” 

An organization pursuing sustainability as a growth opportunity engenders a focus on enhancing benefits (not only reducing costs) through its decision-making and actions -- taking an approach of optimization rather than minimization. The organization can understand the perspective of “people, planet and profit," as expansionist and enabling leadership through the achievement of advanced success metrics. For example, the concept of ‘good design’ of products and services should move beyond typical measures of quality -- cost, performance and aesthetics -- to integrate and apply additional objectives addressing the environment and social responsibility.

Co-founder of MBCD, the reknowned architect William McDonough, was named by Vanity Fair magazine as one of the Top 100 Influential People in 2010, and named by Design Intelligence the No. 1 “role model” for sustainability in the world. McDonough has crusaded since the 1970s with an uncompromising environmental credo—he believes in re-using just about everything—and has inspired some of the highest-profile green projects of our time, including his big cool buddy Brad Pitt’s Make It Right houses in New Orleans’s Lower Ninth Ward.

He developed the Cradle to Cradle® framework to move beyond the traditional goal of reducing the negative impacts of commerce (‘eco-efficiency’), to a new paradigm of increasing its positive impacts (‘eco-effectiveness’). MBDC has developed a white paper that compares the approach of eco-efficiency (or minimization) and a more comprehensive, sustaining approach that integrates eco-efficiency within the larger eco-effective goal of optimization.