Profiles
Business Age
March 2001
Sustaining Arguments
If your company is told by your bank that a loan is dependant upon cleaning up your environmental act, the chances are you might change your attitude. Are such strong measures necessary?
One of the UK’s foremost environmental experts, John Elkington, wrote a book in 1987 called The Green Capitalists which shot to the top of the bestseller lists in numerous countries and was even translated into Russian and Chinese.
The theory it promulgated was something called ‘sustainability’ and, according to its author, its radical central argument unfolded along the lines of learning to live in the environmental world, whether we like it or not. ‘If we fail to do that, many of the changes we want to see happen won’t happen. For the very reason that we have to involve the business community as we can’t solely count on government for sustainable development.’
Whilst many people welcomed this refreshing approach, it seems that the response wasn’t wholeheartedly positive from the Green movement’s old guard. John remembers how in Germany, for example, the Green’s response was to ask him how he dared put the words ‘green’ and ‘capitalism’ in the same title.
Just 15 years on it’s completely different. Increasingly, more and more of the activist movement, including the German Greens and people like Oscar Fischer - who is now foreign minister in the current German government - have embraced the idea that we do have to work with business to make environmental, social and economic sustainability happen.
Having claimed the theoretical high ground, John felt he really ought to show anyone prepared to buy into his message the way to become fully sustainable. And so, in 1987, he set up a consultancy to advise both business and politicians the world over, called, hardly surprisingly, ‘SustainAbility.’
But it seems that the word still had some way to go before being fully recognised. ‘Even though sustainability has become very much the buzz word of the new millennium,’ says John,‘for the first three years of our business, we did wonder whether we’d made a mistake by hingeing everything around this name. I remember time and time again hearing people having to spell out our name, and receiving numerous letters addressed to Stain-ability!’
In 1988, John co-wrote another groundbreaking book titled The Green Consumer Guide, which was a watershed in helping to kick-start the green consumer product market; and, by way of a nice bonus, got him and his consultancy some big business clients into the bargain.
Although the agency has expanded in size and scope, John is clearly proud of the fact that the growth of SustainAbility has been tortoise-like. ‘This might surprise you,’ he says proudly, ‘but we have tried to grow organically. We were just a few people when we started back in 1987. But now we are 17 people who span in our language and knowledge capabilities no fewer than nine nationalities. When we started off our turnover was I think less than £100,000 in the first year. Now it exceeds £1,000,000, and that’s despite the fact that we’ve been trying to keep the lid on.’
Such an attitude would surprise many a business person in our growth obsessed current commercial culture. But there is, it seems, a very good reason for this attitude. ‘The reason we are trying to keep the lid on is that we don’t want to get to the point where we have no option but to market ourselves strongly and accept any work which comes our way.
‘I will give you two examples of what I mean by that. In 1985 Shell had its Brent Spar and Nigerian controversies, and very shortly after that director level people came to us to ask whether we would work for them.’
‘For two years, we refused to do so, and made it very clear why we wouldn’t. One of the reasons why we refused them at first, is that we felt Shell was in denial and thought that it had done the right thing and society just didn’t understand. We felt a value shift going on. We felt that older and more senior people in the company didn’t like what was happening. Our gut instincts told us that we would have just been used to help them put a positive spin on the embarrassing, anti-environmental, anti-social position that they found themselves in.’
Funnily enough, although Shell was eventually to get it right, another company that Sustainability had accepted as a client before it became notorious was the current bete noire of the mass-produced food world, Monsanto.
According to John, ‘We worked for about approximately 18 months for Monsanto. And at the beginning of 1998 we resigned that contract unilaterally and in public because we felt Monsanto was heading for a brick wall and they didn’t really understand the issues in Europe concerning genetically modified food. So you see if we had had a much larger operation to sustain we would not have had the luxury of saying no to Shell, and pulling away from Monsanto as soon as we felt uneasy.’
Such principled attitudes are, according to Tim O’Riordan (Professor of Environmental Sciences at University of East Anglia), slowly but surely gathering steam. Tim is one of the heavyweight British academics invited to join and advise the current government’s newly created Sustainability Development Commission. Although a charmingly craggy Scottish pragmatist, this environmental heavyweight clearly feels that the attitude of business is changing for the good, with regard to the environment.
‘I think there’s no doubt that there is a significant shift for the better between business and the environment. I have had a number of students look at this phenomenon as a subject for their PhD theses, and the conclusions that have been reached seem to denote three major drivers for this change for the better.
‘Firstly, there has been an emergence of both national and international regulations and voluntary agreements which encourage businesses to be much more pro-active in terms of good environmental practice. One of the most encouraging manifestations of this is EMS (Environmental Management System), which is often referred to as ISO 14001, which is an international standard rubric for good business practice in the environment.
‘Well, the good news is that ISO 14001 is adopted by almost every major business throughout the developed world, and, indeed, it’s increasingly finding favour amongst businesses in the developing world.’
‘The second driver might be called corporate reputation or corporate social responsibility. Simply put, the world of corporate behaviour is being watched in a much more critical way by interest groups like Greenpeace and Friends of the Earth, and, because of the Internet, by everyone who cares to flick a switch. Therefore, companies need to be much more careful about their behaviour vis-à-vis the environment than they would otherwise be.
‘In areas such as mining, forestry and fishing there is very considerable surveillance of what companies are doing - not just by environmental action groups but by businesses themselves; who, in turn, are also keeping a very careful eye on who they do business with by creating what is sometimes referred to loosely as the supplier-audit chain.
‘The third driver is about management. A large number of younger first-step and middle-ranking managers are looking at the whole issue of the environment and sustainability not just as a way to be seen as do-gooders but actually as a very sensible, ethically responsible, way to do business. Their instincts and newfound social-awareness, tells them that a well-managed company is a company that cares about the environment and its people, and doesn’t do things which leads to degradation of natural resources, corruption or despair. So what we are seeing now is a management ethos which is much more sustainability driven.
‘And waiting in the wings is a fourth factor which, although there are encouraging signs, is still to be brought to the surface; namely, the global financial community. What this sector of the business world does could have an enormous impact on how businesses treat the environment. After all, if you are told as a company by your bank that a large loan is dependant upon cleaning up your environmental act or taking on board a new sustainability-friendly stance, you are going to do everything possible to meet those sustainability criteria!
‘A lot of these companies are beginning to see their long-term future being influenced by all of this sustainability question so they are making investment decisions which require long lead times and lots of money, like, for example, technology vis a vis renewables or technology that underpins non-carbon driven road vehicles. As you can imagine, this more sustainably-oriented thinking on the part of business requires long lead times and lots of support from government.’
The $64,000 question is whether or not the British government and other UK major political parties are giving that support.