Brit's Eye View: A shift in business attitudes?

Six insights on the business trend toward sustainability

Posted by Peter Madden (Guest Contributor) at 2:20 PM on 28 Dec 2007

Read more about: business | United Kingdom | greening biz operations | greenish companies

Peter Madden, chief executive of Forum for the Future, writes a monthly column for Gristmill on sustainability in the U.K. and Europe.

Forum for the Future recently asked a selection of top business and branding folk to give us the lowdown on the recent trend toward sustainable business. The gurus included Rita Clifton of Interbrand, Stuart Hart of Cornell University, William Kramer of the World Resources Institute, and Jonathon Porritt of Forum for the Future. I have distilled their wisdom into six insights.

1. A real sea change is underway. Looking at the current trends and recent announcements, there are signs of real progress and positive signals of change. In an arena that was once confined to the Body Shop and hippies, we're now seeing a major shift in more mainstream businesses. In the U.K., Tesco, Marks & Spencer and Topshop are all in on the act.

2. Progress is partial. Despite the advances, the size of the challenges we face in building a sustainable future means there is still a long way to go. Even the more progressive strategies, such as General Electric's "Ecomagination," do not fully acknowledge -- or live up to -- the scale of change required. Fundamental questions regarding unsustainable business models need to be addressed before strategies can be fully credible.

3. Business is in the driving seat, not consumers. Although consumer interest is increasing, it's not yet strong enough to drive these trends on its own or make up the entire business case. Business strategy can't completely rely on consumer insight or market research. Bold action and leadership is needed from business to drive this change through to the consumer.

4. There's a green opportunity agenda. Numerous recent high-profile cases link sustainability more to the opportunity agenda of business growth and new market development, rather than the traditional territory of risk, reputation, and compliance. Marks & Spencer's Plan A and GE's Ecomagination are the strongest examples of companies doing this.

5. We need a new marketing ethic. Sustainable business practices will require new approaches to marketing. Our gurus commented, for instance, on the perception that agencies lack awareness and need to shift to see more CSR people being involved in strategic marketing and planning. Some felt that more fundamental changes will require a more ideological and strategic shift -- such as the rise of a new marketing ethic. (See the recent -- and very good -- The Green Marketing Manifesto for more on this.)

6. Delivery and performance is everything. Sustainable business needs to be built on real actions, activities, and results. The most convincing examples of sustainable business are built on tangible improvements, product or service performance, and delivery. Consumers are increasingly savvy about greenwash, and companies making environmental claims will face intense public scrutiny. Green products and services also have to match their competitors, or be better.

Overall, General Electric and M&S were the most mentioned by our gurus for best practice and leadership. They also suggested that HSBC and Unilever are the ones to watch. Wal-Mart and Tesco were frequently mentioned, though opinions were split on the green reality of the agenda, and some asked for more evidence of real results. People agreed, however, that they certainly have the big business buying power potential to really make a difference.

Our green gurus concluded that a sea change is happening -- they saw a real shift in business awareness, attitude, and buy-in to the green agenda. Are they right?

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2 Comments | Post a Comment

Sustainability vs. Profits

Where businesses have a choice between different profitable options, some are beginning to look for the more sustainable option. Which is clearly a good thing.

However, in many cases (and especially in the case of industries whose core products produce large amounts of carbon emissions) the changes that we desperately need are NOT currently profitable - BP isn't reducing the amount of oil it extracts, BA isn't cutting the size of its air fleet, Lafarge isn't making less concrete. Yes, there are still important savings to be made out there in energy and resource efficiency, but not enough to achieve the 90%+ cut in CO2 emissions that we need across the industrialised world. Yes, some companies can get a certain amount of added "brand value" from being seen to do a few high-profile "sustainable" things, but these are patchy at best, tokenistic at worst, and not relevant to the many companies for whom this kind of branding is not a major issue.

We desperately need strong regulation of companies, coupled with social and political shifts away from a reliance on huge, unaccountable corporations for the provision of goods and services. We need to create a new economic environment where sustainable practices are a legal norm, not an optional extra. The risk of relying on the voluntary approaches championed by this article is that it creates the false impression that all is well, companies are cleaning up their act and if we just leave things to the industry "experts" and "gurus" it will all be sorted out. In fact, we need to be campaigning like crazy and challenging the corporations more than ever before - if we leave them to sort it out, we are likely to end up with a host of supposed environmental "solutions" (such as biofuels, dodgy carbon trading schemes and large-scale technofixes) that may keep the companies in profit for a few more years but will do little to prevent runaway climate change and other ecological disasters.

For an excellent critique of the current "Corporate Responsibility" trend (to act as a nice counterpoint to this article) see the latest edition of the "New Internationalist" magazine - www.newint.org/bigbadwolf.

http://adaisythroughconcrete.blogspot.com

by dannyc at 1:57 AM on 31 Dec 2007

But what does it mean?

I'm bothered by the fact that for all of these sorts of surveys out there, no one can come up with an acceptable definition of what it means to be sustainable. Given that flexibility, why should consumers responses to a survey about the nature of sustainability be any more meaningful than questions about the nature of happiness, emptiness, or any other koan-worthy ideal?

Consider: GE has put a lot of it's eco-imagination dollars into clean coal. I think I speak for an awful lot of Gristers who would question how sustainable that is. Yes, they've got other products in that mix as well, but it belies a problem that is much larger than GE. Is it "sustainable" to provide mechanisms to raise the poor out of poverty? What if as a result they become consumers who want cars, jet travel and plastic goods? It is sustainable to sell cigarettes? What if your cigarette company also owns a food company (think Altria, before they spun off Kraft.) How about alcohol? Is there a difference between malt liquor and organic wine when it comes to sustainability quotients? How about if one sells pollution control equipment that drives down efficiency, raising GHG emissions in the name of NOx reduction - how sustainable art thou, oh selective catalytic reducer?

I cannot personally answer these questions, but my beef with sustainability as a discipline is that most never even bother to ask them. And if we can't agree on the definition, then what good is the term? And how do we conclude something useful from surveys about it?

(BTW - for a great review of this question, check out Henry Blodgett's - yes, that Henry Blodgett - piece on socially responsible investing in the October issue of The Atlantic.)

by Sean Casten at 1:53 PM on 31 Dec 2007

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