At current global production levels, every dollar of economic value created produces 768 grams of carbon emissions. According to the Carbon War Room, a business NGO, if we are to stabilise the global climate those emissions need to be slashed to just six grams – a massive cut of 99.22%.
That gulf between where we are and where we need to be is a stark illustration of the environmental challenge to what is, after all, our only home. But for John Elkington, a leading global voice on sustainability and corporate social responsibility, the enormity of the challenge doesn’t cause him sleepless nights.
“I’m a born optimist”, he told NUS Business School on a recent visit. “I’ve been working in this field for 40 years, so I’ve had time to get used to the sheer scale of what we face as a species.”
Resolutely upbeat as he runs through the potentially apocalyptic scale of the crises facing the planet, Elkington may have become used to the immensity of the challenges. But he also doesn’t downplay the daunting magnitude of change needed to overcome them.
“Some people talk about a new industrial revolution, I think it’s going to be several,” he says.
Competition and collaboration both have a role in overcoming the sustainability barrier
“At the species level, I think we’ve been through one or two periods like this: when we broke out of Africa, the industrial revolution, the race to the Moon. This is a bit like all of those, put together.”
Juggling a variety of roles as, among others, columnist, blogger and founder of future-focused business Volans, Elkington is optimistic that this required transformation, while epic in scale, is one that is entirely achievable. “At times where the challenge becomes both critical and clear to people, suddenly you get an immense wave of innovation. And I think now we’re right on the edge of one of those periods,” he says.
Delivering a lecture at NUS, one of his key themes is what he calls “the sustainability barrier” – a mental rather than a physical obstacle that requires innovation and radical new thinking to overcome. There is certainly, he says, an immensity of challenges; but on the flipside immense opportunities to be had in dealing with those challenges in the right way.
“Competition and collaboration both have a role in overcoming the sustainability barrier,” he says.
He points to examples such as the sound barrier or the four minute mile, both of which were once considered – even by the best minds of the time – as frontiers that were impossible to cross.
The same goes for the sustainability barrier: “At the moment it looks almost unspeakably difficult, but I think we’ll break through it.”
With the explosion in the global population – expected to double to around 15 billion people by the latter part of the century – Elkington says there is an urgent need to think about a very different demographic context to just about everything we do.
Faced with a crisis of multiple dimensions, Elkington warns that we are in the midst of a dangerous period for global capitalism – something he says is hard to see when you’re right in the middle of it.
Escalating crises in energy, food, water and climate topped off with worries over debt and on-going volatility in the global economy have all become interlinked, so that we face not just a single issue challenge, but a systemic, multidimensional problem.
Nonetheless he says, in a period of creative destruction like that which he says is underway, as old technologies and business models get swept away, that in turn creates space and opportunities for new models and new technologies to emerge and thrive.
Described by one newspaper as a “true green business guru”, Elkington says he is excited to see the concept taking ground and being absorbed by the business community. But he adds, as sustainability becomes mainstream there is also the risk of the issue becoming diluted – absorbed within reputational dynamics and corporate PR that fudges and distracts from the more fundamental agenda of change that it requires.
He points to a 2010 survey on sustainability of some 766 CEOs around the world by consulting firm Accenture. The survey found an encouraging 93% saying they viewed sustainability as important, and 88% agreeing that the concept needs to be embedded throughout their supply chains. But of those 766 CEOs surveyed, 81% said they had already embedded sustainability in the strategy and operations of their companies.
Elkington’s assessment: “Complete nonsense.”
“They’re not lying,” he says. “They’re not liars – particularly – but they’re misunderstanding the agenda that they think they’re addressing.” Most companies, he says, have not worked through the deep structural implications of some of the key challenges that real sustainability entails. Many of the people who talk about sustainability, Elkington says, do not address the issue of very long term time dimensions or inter-generational equity – meaning our duty as the current generation not to pass on to those that follow us a resource-depleted and burned-out world.
Or, to put it another way, to please leave the bathroom in a similar state to that which you would wish to find it.
Held to account
Part of the problem lies in defining what exactly sustainability means and what is required to put it into practice. Perhaps because the term itself has become a corporate buzzword, which – like many buzzwords – is often a cover for an absence of real substance.
Elkington however has clear ideas about what sustainability means and, more importantly, how it can be measured and thereby allow claims of sustainable practice to be held to account. He has become widely known for his concept of “triple bottom-line accounting”, building on the traditional corporate reporting framework of financial performance to take into account ecological and social performance as well.
He points in particular to one project of sustainability accounting launched in 2010 by Jochen Zeitz, chairman of German sportswear firm Puma. Put simply, Elkington says “he asked the question, how much damage is Puma’s business doing every year to the natural environment? Answer: $130 million. Now they’ve actually published that figure – no other company yet has done anything like that.”
Such cases, Elkington says, are exciting and welcome – but not nearly enough. Nonetheless, initiatives like that by Puma and others by companies like GE and Siemens show that major companies are shifting their mindset and waking up to the fact that sustainability is more than just a PR issue, but is about corporate responsibility, focusing on the future, as well as offering real and profitable business opportunities.
Here in Asia, he notes, the sustainability picture is mixed – with wide disparities in terms of understanding the concept and putting it into practice. In Japan for example, several companies have emerged as world leaders in energy efficiency; while neighbouring China finds itself to some degree on an accelerated curve similar to Japan’s experience.
But India he says, while fast emerging as an Asian economic powerhouse, is in many ways a country still in denial. “They look at the melting glaciers in the Himalayas and say ‘what’s that got to do with us?’ And yet in terms of access to water it’s going to be an immense problem for their economy.”
Part of the solution he says, lies in intelligently deployed capital – a concept backed by a group known as the Carbon War Room (CWR), co-founded by British entrepreneur Richard Branson. This initiative is aimed at tacking what Elkington says is the real bottleneck in delivering genuinely sustainable transformation.
Policies and technological development are both necessary, he says, but the true bottleneck comes in the intelligent deployment of capital to the right applications. So instead the CWR focuses on enabling capital to reach and affect particularly geographical regions and industrial sectors where large scale cuts in emissions can be achieved.
One sector in particular being targeted by the group is shipping. With just 16 of the world’s biggest ships producing sulphur emissions equivalent to those of 50 million cars, it’s also a sector that due to its nature is largely out of sight and out of mind. Nonetheless, given the right deployment of investment, information and innovation there is a realistic potential exists for slashing emissions in an industry that accounts pumps out over a billion tons of carbon CO2 and other pollutants every year.
The Carbon War Room, Elkington says, is one example of the collaborative effort needed by business to meet the challenges we face and deliver solutions. And it’s these initiatives, which view sustainability at a fundamental, structural and systemic level, that are needed to break through the seemingly insurmountable sustainability barrier. The alternative, perhaps, is to amble fatalistically towards catastrophe.
“We can’t simply be pessimistic,” he says. “We’ve got to take that as the challenge and respond.”