Joel Makower is a great guy. Day-in day-out he pushes the agenda of sustainability & innovation forward bit by bit. Every day (except weekends ;-)) I am receiving his GreenBiz newsletter and see his friendly face besides the text in which he explains to me that another success story could be told in sustainability, another great social entrepreneur has been found who has developed something of great value, or another company with unseen innovations that have the potential to make the world a better place. Change is here – let’s shout it out to the world!
Last week, on the occasion of the launch of the 2012 State of Green Business Report (click to download the report), for the first time since I follow Joel’s efforts, his head seemed to be hanging down. Yes, sure, a lot of good things were happenening (in the U.S. mainly, since the 2012 State of Green Business Report is U.S.- based), but he also alerted us that for the first time in five years there was a visble ‘decline of progress’, and this phrase really touched me. His following words even hit me harder, let me quote some important parts here:
“Each year, we take the pulse of sustainable business through the lens of 20 indicators of progress, or lack thereof. […] For the first time, we saw a significant decline in progress—not just in one indicator, but several. Cleantech investments, energy efficiency, green office space, packaging intensity, toxic emissions, and toxics in manufacturing — all of these trend lines leveled off or reversed course in 2011. Only one indicator — green power use — markedly improved. What’s to blame? Simply put, sustainable business is suffering a recessionary hangover.
For much of the past few years, many of our indicators moved in positive directions. Combined with the commitments we were seeing, as well as our surveys of sustainability leaders in large corporations — which told us that their budgets, staff, and goals were holding steady or growing during the recession — we concluded that the economic turmoil, at least in the United States, wasn’t putting a damper on companies’ efforts to improve their environmental performance. The results could be seen each year in the continued progress measured by the GreenBiz Index. We were, shall we say, irrationally exuberant.
The reality is this: Much of the progress we saw in our 2010 and 2011 reports were lagging indicators based on work done with pre-recessionary budgets. As the economic realities have set in, environmental progress has stagnated, or worse.[…]
It’s not all bad news. This year, like all years, we find many promising developments in the world of corporate sustainability, as more companies make more commitments related to their products or operations. As we have in the past four reports, we pick 10 promising trends, from the rise of sustainable consumption, to the growing engagement of chief financial officers in companies’ sustainability initiatives, to the fact that clean technology, contrary to the political narrative, is alive and well, even flourishing. There is much reason for hope.
Indeed, that’s where the cognitive dissonance sets in: We report on so many promising developments each week, so many companies that are engaging more thoughtfully and holistically than ever with what it means to integrate sustainability into their operations, products, and services. We watch as clean technologies become competitive, as markets for organic foods and efficient vehicles reach into the mainstream, as companies achieve zero-waste factories and replace toxic ingredients with safer ones.
But for all of the good work being done, it’s simply not good enough. Can we simply pass this off as a byproduct of a bad economy, and cross our fingers that progress will accelerate when times get better? Or is it time for companies to dig deeper, and for their employees and customers to get more engaged? What will it take to make real progress?” [End of quote]
So, what will it take to make REAL progress? Is work done SIMPLY NOT GOOD ENOUGH? Well, nobody really knows, that’s the blunt truth, we are all somehow muddling-through. Two factors keep us in the mist and not let us see the real challenge: huge amounts of debt money and lack of a good benchmark. A couple of words on both of them:
Is Joel’s observation just true for the U.S.? Well, most likely not. We are still in a financial crisis that was only smoothened in 2008-2010 due to immense capital injections by governments around the world (2.400 billion USD was the last figure I saw) and that our kids for the rest of their lives will not be able to pay back (and don’t think that a currency reform or massive inflation will solve the issue as those have other severe knock-on effects). Some of the progress (or just the stagnation) in the sustainability data landscape in 2010 and partially in 2011 was simply possible due to artificial growth, funded by taxpayers money, or should we better call it more socialized debt? Some of that money supported special infrastructural upgrades or repair in the energy and building sector and allowed for a continuation of pre-crisis programs, keeping jobs or even helped adding capacity. That was good for the moment, and for the data (with some of the environmental indicators looking of course better simply due to the decrease in economic activity and production). But this ammunition is more or less gone, and the decline of progress seems to now have started, the lack of additional plaster now reveals the open wounds. Governments have consequently turned around and spending cuts are becoming the new reality, which in fact will more likely lead to an increase of the decrease of progress. At the same time we also saw in 2011, although still quite a bit away from the peaks of earlier industrial production, the biggest increase of CO2 emissions ever measured and an the amount of natural disasters that were (partially) caused by human activity was at an all-time high. Social unrest in many parts of the world rounds up the picture. We are nearing a Catch 22 situation in which e.g. the shift to innovation on renewables can’t be given the necessary substantial support due to spending cuts, short-term repair and increasing social costs, while technologically being the only way out of the crisis, at least in the Western world. China already says thank you and India and Brazil might join the choir.
But then, how much is GOOD ENOUGH? How can we break through the latent cognitive dissonance that Joel’s observing so well? Well, we need to start defining our common success factors, both on macroeconomic level as well as on organizational level. We need to understand that no single industry can remain in their comfort zone (not even if enlarged by supply chain policies and product take-back arrangements) if they want to be successful, and by that I mean: survive. I do observe that only the best in sustainability have began to understand that the last 30% of climbing Mount Sustainability is much more dependent from developments in many other industries than what they can achieve themselves! Singular company programs or collaboration within an industry is not good enough since it undermines cross-fertilization between industries and still blocks unlocking the real potential of sustainable innovation. I love the example of what telecommunication has done for the agricultural industry and the social development of farmers and communities in many SEA countries (apart from democratization and education), and much more of this is needed, and quicker. However, in order to be able to achieve this cross-fertilization, way more synchronization of activity and adaptation planning is needed, and that will only work with a common paradigm to work towards. John Elkington’s Volans and myself at Deloitte Innovation are advocating for Zero Impact Growth as the minimum synch to work towards, with the Deloitte/Volans ZERO HUB as an open innovation platform to help us get there (starting this year). Defining the ‘Zeronautics’, working on a joint adaptation plan, discussing the roles and responsibilities of the different players for their individual adaptation plans, and working on the tools to measure what the implementation success of the joint roadmap really is, are the challenges we need to tackle. Only if we have a joint and accepted benchmark (with zero impact growth as the necessary ‘North Star’) we can start doing and measuring what is at least GOOD ENOUGH. Sustainability performance must be measured in context, anything else keeps us in the mist!
Joel Makower is a great guy, I wrote in the beginning. His own answer to these challenges is VERGE, another platform to get sustainable innovation further aligned, with dots connected and the real needs discussed. It’s these kind of paradigm-oriented, outcome-oriented and muti-industry based (open innovation) platforms like the ZERO HUB and VERGE that we need to help deliver, closing the wounds and cure from the blindness! Plato already said: ‘The part can never be well until the whole is well’.