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We need to redefine and reframe sustainability, and quickly, to both guard against erosion of the concept and to remind corporate leaders that sustainability and business strategy - and the material and social success that hopefully comes with that - are not mutually exclusive.
Context
The "economy versus the environment" or "jobs versus the environment" argument is, to my way of thinking, understandable, but also tired. It’s understandable because any system is, by its nature, resistant to change. Moreover, in the absence of a compelling argument to change the system those with their hands on the levers that could do just that will tend to affirm the status quo.
The argument is also tired, however, because sustainability is much more than a higher, faster brand of environmentalism with little to contribute to business and societal success. Research and the experience of firms and cities around the world increasingly points out that sustainability can both protect existing assets and value and provide the basis for new wealth creation.
By way of example, in 2000 and 2001, the European Union (EU) committed to an economic growth plan that placed sustainability squarely alongside competitiveness. By the end of 2007 the growth rate in GDP of the 15 core EU members was 20 per cent better than the US. According to the EU Directorate-General for the Environment, the most visible effect of the growth was a shift of "resources from polluting sectors to more environmentally friendly sectors." Conspicuous areas of growth include pollution control, sustainable energy, waste and water treatment, recycling and eco-tourism.
In the context of the current recession, a number of high-profile corporate voices have taken the macro-economic story down to the level of individual firms and their supply chains and reminded us that sustainability, rather than being a drag on economic recovery, can actually speed the recovery.
Nicholas Stern, head of the Grantham Research Institute on Climate Change at the London School of Economics, and author of the influential 2006 report on the economics of climate change, The Stern Review, argues that "the arrival of the recession actually strengthens the argument" (to invest in technology and make deep cuts in carbon emissions).
"At times of recession, it’s cheaper to invest, because there’s less pressure on resources." He further notes that any attempt to "rekindle high carbon growth would be a big mistake. Essentially, it would be trying to invest in something which has a really limited future."
This view is echoed by Jeroen van der Veer, CEO of Royal Dutch Shell and Chairman of the Energy and Climate Change working group of the European Round Table of Industrialists:
Although the global recession is serious and its duration uncertain, the world must nevertheless continue to focus on the far-reaching threat of climate change. Indeed, if we are smart, public policy can serve the twin goals of stimulating growth and fighting global warming.
The Shell CEO added that "strong incentives to cut greenhouse gas emissions could kick-start private investment and help to fuel an economic recovery."
Wal-Mart has also sent an interesting and powerful signal to its supply chain partners that the world’s largest retailer isn’t backing away from sustainability in the recession. At a recent assembly of its Chinese suppliers in Beijing to discuss the company’s expectations and standards on environmental and social issues, CEO Lee Scott said that any non-compliant companies would be "banned from making products for Wal-Mart." Scott’s blunt assessment reflects his growing awareness that sustainability and profitability can go hand-in-hand:
What I thought was going to be a defensive strategy is turning out to be precisely the opposite:To me, there can’t be anything good about putting all these chemicals in the air. There can’t be anything good about the smog you see in cities. There can’t be anything good about putting chemicals in these rivers in Third World countries so that somebody can buy an item for less money in a developed country. Those things are just inherently wrong, whether you are an environmentalist or not.
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