March and April. You can almost hear the collective sigh of relief in corporate sustainability departments as the new crop of sustainability reports is put to bed, web pages go live and press releases fly.
Among them, in the past few weeks, Electrolux, Scania and Ericsson have all unveiled their 2012 reports.
This year there is commendable progress in integrating sustainability into the business strategy. There is more C-suite engagement. Longer-term goals and commitment to solving pressing global challenges. More robust materiality. Far stronger emphasis on partnerships along the value chain. And growing recognition of the need to transform entire industries.
There is also palpable awareness of the impact increasing populations and expanding middle classes are going to have on markets and demand for products and services around the world. With growth set to soar, there is a formidable opportunity to build green market share – but also the unprecedented challenge of having to decouple this growth from impacts.
As Scania’s CEO Martin Lundstedt underlines: “Our industry’s challenge is to deliver value sustainably – above all by decoupling transport growth from growth in CO2 emissions.” For him, the answer lies in sustainable growth through “developing innovative, low-carbon products and services for all our markets, and working with partners upstream and downstream to cut impacts and create value.”
Similarly, Electrolux’s efforts are directed at developing “smarter, more accessible, resource-efficient solutions that meet people’s needs and improve their lives.”
These are great aspirations and absolutely the right direction for business to travel in. But the question I suspect no 2012 sustainability report can answer is whether this approach can deliver the sheer scale of efficiency needed to remain within planetary boundaries and offset growth. There’s an emerging consensus that what’s needed is disruptive sustainability – namely a complete rethink of how industry sectors operate because incremental improvements alone will simply be swallowed up by growth.
As a society, we’re not yet at the point where we’re willing to peg economic growth to the pace of sustainability innovation. But that’s a conversation we need to have – and while it’s a bold business that’s willing to question the dogma of continuous growth, a few business leaders are speaking out. Take Yvon Chouinard, founder of Patagonia. In a recent Greenbiz interview, Chouinard did not mince his words: “The elephant in the room is growth.” He advocates a return to the tried-and-tested long-term business values of “quality, innovation and controlled growth.” In Australia, Dick Smith, founder of Dick Smith Electronics, has gone further. In his view, “endless growth is not sustainable.” His response: to launch the Wilberforce Award – a $1 million prize for a person under 30 who can come up with an alternative, sustainable way to organise our economy.
The growth quandary is not new. Paul Ehrlich, world-renowned Bing Professor of Population Studies at Stanford University and winner of the 1993 Volvo Environmental Prize, has been flagging it for years. He is far more provocative, claiming that growth – in affluent countries at least – is a disease. Ehrlich’s 1974 book The End of Affluence predicted a coming age of material scarcity. While several of his predictions have been far off the mark, it’s fair to say this megatrend now appears spot on. And in Ehrlich’s view, existing growth rates are simply too high for a sustainable future.
So how do we square this with today’s corporate sustainability strategies? Asia is the stage on which the impact of greener business in an ever-expanding economy will be determined, according to Peter Lacy, managing director of Accenture Strategy Practice – in particular China, which he says is characterised by a “trilemma of consumerism, industrialisation and urbanisation.”
With corporate eyes already squarely focused on China for its market potential, the question is whether it can become the leading crucible for disruptive business approaches. As well as disruptive innovation in new markets, we need informed discussion on how business growth aligns with sustainability strategy. So will next year’s reports take the bull by the horns and deliver serious debate? We have twelve months to find out.
Image credit: http://openscience.com