(34) Sustainability

Sustainability easily explained

What is sustainability?

Sustainability34

Sustainability by Organizational Function

Senior Management:

How to Lead the Sustainability Effort

Social entrepreneurship

Social entrepreneurs are ones that use the marketplace to solve gnarly social problems. Often, they uncover innovative ideas. Consider the One Laptop per Child programme that emerged from MIT where they designed a laptop costing about $200 that is so robust it can be dropped in a tub of water, and it probably has better Wi-Fi reception than yours. It is not just compassion that leads companies in this direction. It finally occurred to some that if they only focused on serving the developed world, they forfeited five-sixths of the world’s potential customers. C. K. Prahalad’s book, The Fortune at the Bottom of the Pyramid, chronicles a number of different companies that are making a healthy profit serving the very poor, people who earn less than $2 per day.

It may appear unseemly to make a profit off the poor. And this market is certainly ripe for abuse. But consider this. Poor people often pay much higher prices for the things we take for granted. Cooking with kerosene may cost much more to boil a kettle of water than your electric stove. If they need a little credit, they may pay interest rates of 10 per cent per week or day from the local loan sharks! When you can harness the profit motive and the financial capital of business to meet social needs, you no longer have to limit your efforts to donations. Think about how much money you spend every year in commerce: buying food, electricity, restaurant meals, clothes, air tickets, mortgage payments, etc. Now add up your annual charitable donations. If you’re like most people, 98-99 per cent goes to commerce, not charity. What if we could put a significant portion of that 99 per cent to work on the world’s problems?

In 2007, Darcy visited the Aravind Eye Clinic in Madurai, India, which was described in The Fortune at the Bottom of the Pyramid. It was founded by Doctor Venkataswamy (affectionately known as Dr V for obvious reasons), a retired physician nearly crippled with arthritis. He wanted to eliminate unnecessary blindness, which in India is not just a huge inconvenience; it’s a death sentence. The life expectancy after going blind is about two or three years.

He built this clinic as he could earn funds. Two-thirds of the people pay little or nothing for their service, but those who pay and those who don’t get the same doctors, the same quality of care. The only difference is the comfort of the facilities. You could be a billionaire and walk into the free clinic and get served, as long as you’re willing to sit on the waiting room floor (a common practice in India) instead of in a chair.

Dr V was inspired by the success of Coke and McDonalds. If Coca-Cola can convince Indians to buy the sweet drink, perhaps similar methods could convince people to come in for surgery. If McDonald’s can take people with low levels of education from anywhere in the world and produce a consistent quality, perhaps strong systems could enable Aravind to operate on thousands of people.

The Aravind Eye Clinic is now the largest in the world. They have sophisticated real-time systems to monitor their performance. The quality of care is so good that the UK sends patients to them. Surgical interns from prestigious US medical schools go there to perfect their technique. Aravind designed their own intraocular lens for cataract surgery because the lenses they had to import cost $200, completely unaffordable for their patients. The model they make costs about $5 each and they are now exporting it. They send technicians into the villages to do eye examinations and provide transportation, food and lodging for those who need more advanced care. They discovered that people were much more likely to wear glasses if the patients didn’t have to return to pick them up, so they make glasses and contact lenses on site. If you need something really unusual, they will FedEx your glasses to your village, no matter how remote. And they didn’t just stop there; they have shown others in many developing countries how to reproduce their results.

Tight funding was seen as a powerful catalyst for innovation. As Dr V’s nephew, one of the surgeons told us, ‘Innovation happens when you have scarcity. We too will become inefficient like the US, where we can just throw money at the problem. It’s inevitable. Eventually we will get there.’ Rather than direct all of Madison Avenue’s wily marketing acumen on developed nations, where we already have so much stuff it’s caused ‘Affluenza’, why not instead direct the power of the marketplace to solve enduring inequities? The incredible interest in Kiva.org, where people lend small sums to entrepreneurs around the world, indicates that there is an untapped desire to help others in our society.

Resources:

Bornstein, David (2007) How to Change the World: Social Entrepreneurs and the Power of New Ideas. New York: Oxford University Press.

Christensen, Clayton M., Ruggles Baumann and Thomas Sadtler (2006) ‘Disruptive Innovation for Social Change’ Harvard Business Review, December, Vol 84, No 12, p 94-101.

Hollender, Jeffrey (2004) What Matters Most: How a Small Group of Pioneers Is Teaching Social Responsibility to Big Business, and Why Big Business Is Listening. New York: Basic Books.

Paine, Lynn Sharp (2003) Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance. New York: McGraw Hill. Prahalad, C. K. (2005) The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits. Wharton School Publishing.

Shore, Bill (1999) The Cathedral Within. New York: Random House.

Yunus, Mohammad (2003) Banker to the Poor. Public Affairs. This is a poorly written book, proving that a Nobel Peace Prize doesn’t make you a writer, but it explains how the micro lending industry was created and gives insights about the relationship between women’s rights, poverty and social justice.

Organizations:

• Ashoka.

• Columbia University’s Research Initiative on Social Entrepreneurship.

• Schwab Foundation for Social Entrepreneurs,.

• Social Venture Network

Backcasting

The problem with most strategic planning methods is they rely on projecting existing trends into the future. But not all change is continuous: a new technology or a disaster, for example, can completely change the rules of the game. So rather than just forecasting from an existing point in time, it can be instructive to do ‘backcasting’ from a desired future.

The Natural Step has taken the concept of backcasting and given it traction. The Natural Step framework provides a simple, four-rule description of a sustainable society. The rules (referred to as ‘system conditions’; see the more complete description later in this chapter) were created and vetted by a wide range of scientists. They deal mostly with environmental issues, requirements that nature places on us based on the laws of thermodynamics. The four rules can be used to describe the ‘endgame’, what we all must be able to do if we want a sustainable world. Executives go through a visioning process to image how their organization might operate in that sustainable state and then work backwards to figure out how to get there. One of the advantages of backcasting is that it helps people get beyond current limitations. It often unveils entirely new directions and provides clear guidance for current decisions. It can help organizations avoid investing in dead-end technologies and instead show them how to invest in platforms for future ones.

Resources:

Cook, David (2004). The Natural Step: Towards a Sustainable Society. Bristol, UK: Green Books. This is the best, clearest overview of The Natural Step framework for a general business audience that we’ve found in print.

See the TNS e-learning course from TNS-Canada. The course can be found at www.naturalstep.ca/elearning/.

Wheeler, David and Maria Sillanpaa (1997) The Stakeholder Corporation: The Body Shop  Blueprint for Maximizing Stakeholder Value. London: Pitman Publishing.

Elkington, John (1998) Cannibals with Forks: The Triple Bottom Line. Stony Creek, CT: New Society Publishers.

The first of a two-volume series entitled ‘From Words to Action: The Stakeholder Engagement Manual’, published by the Stakeholder Research Associates in partnership with the UN Environment Programme and AccountAbility, Practitioners’ Perspectives on

Stakeholder Engagement examines the trends, processes, key success factors and challenges of stakeholder engagement based on the first-hand experiences of practitioners on the front lines.

Choose terms and frameworks

Assessing sustainability-related threats, opportunities and constraints should provide executives with a clearer focus. What sustainability issues are most pertinent to their organization? How urgent are the threats? Where are the most intriguing opportunities? How do their primary stakeholders feel about sustainability? Answers to these questions provide a basis for selecting terms and frameworks.

Alternative terms

It matters what you call something. As George Lakoff, author of Moral Politics, points out, the choice of terms can invite or diffuse objections. Who wouldn’t want ‘tax relief ’ or ‘healthy forests’ or ‘clear skies’? We are not advocating spin-doctoring, but why not choose terms which invite people in instead of scaring them away?

For years, ‘sustainability’ was often too much of a liability. Many people didn’t know what it meant or it seemed too vague, abstract or academic. Those days are largely gone; sustainability is now an accepted term, showing up in the Wall Street Journal without the need for explanation. There are some purists who think sustainability implies maintaining a status quo instead of restoring what has already been degraded. And like many popular terms, it has been co-opted (to mean ‘sustaining my business’). But for many, this is still going to be the preferred term. There may be some audiences where finding an alternative term is still wise. We raised this issue in consultations with a client in Alaska. Alaska has had a highly extractive economy and ‘environmentalists’ are often viewed as obstacles rather than advocates. Since for many people, ‘sustainability’ equals ‘environmentalism’, it became important for this client to find an alternative term. We settled on ‘sustainable economic renewal’, keeping the term ‘sustainability’ embedded but linking it to economic development. Be open to ‘bridging terms’, phrases that bridge the gap between where people are now and ultimate sustainability. Manufacturers, for example, may not like the term ‘sustainability’, but ‘zero waste’ may seem a logical next step to ‘zero defects’ and ‘waste reduction’ programmes they may already have. ‘Sustainable communities’ may bring to mind bearded hippies, but ‘smart growth’ sounds, well, smart.

In some situations, it makes most sense to adopt one issue under the sustainability banner. For example, the two largest reinsurance companies in the world, Munich Re and Swiss Re, have both adopted climate change as their focus. Certain industries may lend themselves to focusing on a particular practice, for example the construction industry talking in terms of ‘high-performance buildings’ or chemists focusing on ‘green chemistry’. In some situations, the framework you choose - CERES (Coalition for Environmentally Responsible Economies), The Natural Step framework or the Ecological

Footprint, for example can provide the overarching term for your effort. Sometimes organizations develop their own terms, such as the Collins Company referring to their Journey to Sustainability programme to emphasize it is a process as much as a destination. If you choose not to use the term ‘sustainability’, here are a few suggestions for alternatives:

• Zero waste;

• Green building or high-performance buildings;

• Green chemistry;

• Community health;

• Social responsibility;

• Triple bottom line;

• Three-Es (economy, environment and social equity). Since ‘equity’ tends to leave out many other social-related issues, some replace ‘social equity’ with ‘community’ or ‘social’;

• Resource efficiency or radical resource efficiency;

• Risk management;

• Product certification;

• Product stewardship;

• Stakeholder management;

• Smart growth; and

• Quality plus (enlarging the definition of quality to include the environment and other stakeholders).

Frameworks

A number of different frameworks or methods have been developed to explain sustainability. Depending on the work you do, some will seem more relevant or useful than others. You may choose to combine a couple, The Natural Step framework and zero waste, for example. Consider the pros and cons of several before selecting the language that will work best in your organization.

The usefulness of a framework is often best understood by analogy. Imagine you want to start a supermarket. Into your head pops a mental model that would, in its main characteristics, be shared by most people; a framework, organized by produce, dairy, frozen foods, canned goods, breakfast foods, etc. This framework makes it easy to know what you will need and see what you may have forgotten (perhaps a pet food aisle). Because this concept is so widely shared, it makes it easy for customers to find what they need and employees to know where to place things on the shelf. Everyone accepts that the grapefruit are in the produce section and not the breakfast aisle, even though most grapefruit are consumed at breakfast. This same framework is reflected not only in the layout of the supermarket but also the organizational structure (produce manager, butcher, baker, etc.), the computer system and vendor relationships. Now, instead of building a supermarket, imagine you want to build a sustainability programme. What comes to mind? Wouldn’t it be great if we had a shared mental model of what should be contained in such a programme, a framework that made it clear how to organize the effort?

There are a number of sustainability frameworks currently in use. None is perfect, but some are more appropriate for some situations than others. (See Appendix A for a list of common ones in use.) You will want to choose a framework or set of frameworks that will:

• Ensure you are working on a complete set of issues, not forgetting anything important;

• Be easy to understand and remember, will resonate with your employees and stakeholders;

• Imply clear end-points, letting you know when you have reached a sustainable state; and

• Provide or imply a process for moving forward.

To meet all these criteria, you may need to blend different frameworks. Frameworks exist in a hierarchy – some provide overarching principles of sustainability, describing what sustainability is; others are more related to specific methods or tools and as such are more prescriptive. You should be able to google any of the terms to find more information.

In the building industry, for example, some use The Natural Step framework to inform their use of LEED, a green building scoring system. Some of our clients have adopted the triple bottom line (social, economic and environmental), which gives equal weight to the three elements, and then embedded The Natural Step system conditions into those three elements. Some in manufacturing and government have embedded either The Natural Step or triple bottom line into an existing environmental management system. Ideally, the framework or frameworks you choose will be echoed in a sustainability policy, metrics, decision tools and your sustainability report.

 

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