All Things Sustainability

We are all wondering: what’s next? This paper poses and answers 10 questions.

This post is available as a PDF to download and cite on ResearchGate and SSRN.

These are predictions for the COVID-19 era and beyond based on my research.[1]

Question One: will the novel coronavirus / COVID19 accelerate automation?

Answer: yes. Automation has already evolved beyond manufacturing to other business processes. This trend is likely to accelerate as a result of the pandemic. Some of the under-appreciated potential of blockchain – or distributed ledger technology – relates to maintaining credible records, certification, and self-executing smart contracts. We are now acutely aware of how quality certification in a supply chain can be a vital matter of life-or-death. We worry about the viability of supply chains that rely on people who can get sick. So it seems a reasonable to expect to see more blockchain-enabled automation in supply chains, with several implications explored in my recent article in Blockchain, Business Supply Chains, Sustainability, and Law: The Future of Governance, Legal Frameworks, and Lawyers?^[2]

However, the pandemic has also highlighted the pitfalls of automation described in the article. Among them, there will be a greater need to (1) proactively ponder contingencies and consequences (as I advocated with Joan MacLeod Heminway in Blockchains, Corporate Governance, and the Lawyer’s Role[3] and with Gerlinde Berger-Walliser and Paul Shrivastava in Using Proactive Legal Strategies for Corporate Environmental Sustainability,[4] and (2) preserve a role for human discretion when the unforeseeable happens. 

Question Two: will some of us keep working from home? 

Answer: to some extent, for some of us, yes, this trend is likely to continue. Also, some administrative structures are likely to erode. Again, this trend was foreseeable prior to March of 2020: the same advances mentioned above can be used to automate the sets of rules-and-agreements that define our work relationships. Some administrative oversight and support roles will likely be automated away, especially as we realize the efficiencies of working remotely. On the other hand, once again, the current crisis highlights the need to proactively ponder what ethical standards we want to hardcode (whether intentionally, or de facto, through omission), as described in Tao of DAO: Hardcoding Business Ethics on Blockchain.[5]

Question Three: will demand for greater transparency in government continue? 

Answer: depends on the government, but generally yes. In the USA, there have been demands for greater transparency, even from governments that are widely seen to have responded the COVID-19 outbreak comparatively effectively, such as California. In a recent article, City Sustainability Reporting: An Emerging and Desirable Legal Necessity,[6] I reviewed the evolution of the materiality standard and steps taken by the SEC, and suggested that reporting on a wider array of societal, environmental, and governance data is becoming a necessity for those local governments that have issued about $4 trillion in securities. So, regardless of the pandemic, I see this trend continuing.

Question Four: will we demand more transparency from businesses as well?

Answer: yes. We already see investors suing companies for misleading statements or lack of disclosure of risks related to the pandemic. I have been researching and writing about transparency since 2005, including how it relates to reputation,[7] to financial performance,[8] to share price and returns to investors,[9] to real estate law,[10] and to employee happiness,[11] plus differences in how we discuss such practices across cultures,[12] and the extent to which reporting on societal, environmental, and governance practices is an evolving legal expectation.[13]

I expect more research into the relationship between various  firm characteristics, measures of performance, and transparency[14] – including in the context of China.[15]

Question Five: will private sector managers continue to promote new norms?

Answer: yes, and some have been embracing this, with positive effects for both shareholders and other stakeholders. Together with Mel Edwards and Ed Freeman (the father of stakeholder theory), we pointed out the trend and benefits of shaking stateholders out of complacency in our article, Shake Your Stakeholder: Firm Initiated Interactions to Create Shared Sustainable Value.[16]

Question Six: are trends in technology and transparency changing the role of lawyers?

Answer: yes. We described the need to for lawyers to adopt a more proactive mindset in articles with Joan MacLeod Heminway – Blockchains, Corporate Governance, and the Lawyer’s Role[17] – and with Gerlinde Berger-Walliser and Paul Shrivastava in Using Proactive Legal Strategies for Corporate Environmental Sustainability.[18] Undoubtedly, greater gathering, use of, and intended (or unintended, or even coerced) disclosure of data creates legal risk of which attorneys should be aware.[19]

Question Seven: do our laws and legal system need updating?

Answer: yes, and this realization has already broadened and accelerated. Fundamental assumptions of what is a government-guaranteed right vs. a privilege, or in the realm of “things that should be earned” have been challenged, in terms of our health and incomes. Technological change and platform capitalism (or “the gig economy”) already resulted in disputes about these issues. We are overdue for re-imagining some fundamental mental models – legal definitions, categories, relations, and implications – that are already quaint and obsolete – as argued in Industry 4.0 Era Technology (AI, Big Data, Blockchain, DAO): Why The Law Needs New Memes.[20] On a related note, there are also opportunities to remove perverse incentives in obsolete legal structures, as I explained with Mystica Alexander and William Wiggins.[21] On the other hand, some traditions[22] and little used statutes[23] should arguably be reinvigorated and used.

Question Eight: does education need to change? Specifically, do business and other professional schools need to evolve?

Answer: yes. We need more holistic and experiential approaches. Specific innovations in these directions are described in a chapter in the book, Handbook of Sustainability in Management Education[24] and in A Path to Developing More Insightful Business School Graduates: A Systems-Based, Experiential Approach to Integrating Law, Strategy, and Sustainability in Academy of Management Learning & Education.[25]

Question Nine: what about fundamental questions of meaning and happiness, and what we use as key performance indicators (of us, our organizations, and economies)?

Answer: this trend has also been accelerated, but whether questioning leads to the adoption of new mindsets and key performance metrics is less clear. Anyone watching stock market indices soar on the same day that millions of job losses and tens of thousands of deaths are announced has probably wondered whether about what we measure, how we track numbers, and whether that will change. It was none other than the inventor of GDP that argued against its use as measure of economic success, as pointed out with Sandra Waddock in our article, Midas, Cassandra & the Buddha: Curing Delusional Growth Myopia by Focusing on Thriving in the Journal of Corporate Citizenship,[26] as well as in the article below. As we reevaluate what brings joy and meaning in the current moment, and question mainstream measures of economic success, we can anticipate more curiosity about the relationship between happiness, consumption, and environmentally damaging activities of the early 21st Century. We should expect more research along the lines of what D. Steven White and I published, including A Happiness Kuznets Curve? Using Model-Based Cluster Analysis to Group Countries Based on Happiness, Development, Income, and Carbon Emissions,[27] and similar studies.[28]

Question Ten: any ideas where to look for inspiration? For a small business owner?

Answer: the most creative and inspiring entrepreneurship stories often occur in contexts of hardship or even where private business ownership is prohibited. The following case studies have all won awards and include references for further reading:

– first, how contaminated land can be turned into a business and community redevelopment opportunity: Sid Wainer & Son: A Growing Realization (2011 ALSB distinguished proceedings award winner).[29] For more on brownfielding, see There’s Gold in Them Thar Brownfields: the Legal Framework of Brownfield Redevelopment and Some Tips for Getting Started.[30]

– second, how taking a risk on a new business (and being open to radically new pivots) in an economically struggling former milltown can result in a set of thriving businesses: The Rail Trail Flatbread Co. (2017 USASBE case study award winner).

– third, the secrets-to-success of a former tailor making less than $1-per-day in the provinces of Cuba who started, owns, and runs a hospitality business in Havana that was recently rated as the #7 specialty accommodation in Cuba: Rodolfo’s Casa Caribe in Cuba: Business, Ethical & Legal Challenges of Investing in a Start-Up in Havana (2016 ALSB international case study award winner).[31]

– for more stories of entrepreneurship in contexts that seem extremely adverse, please see my website, www.Extreme-Entrepreneurship.com, where I am collecting such stories for an upcoming book.

[1] Please send feedback to asulkowski@babson.edu. Thanks to Jason Cipriano, Global Head of Supplier Relationship Management (SRM/VM) & Vice President, Sourcing & Procurement, for his valuable input, including the qualification that some of these anticipated trends have (to date) not occurred quite as fast as some had expected.

[2] Sulkowski, A. J. (2019). Blockchain, Business Supply Chains, Sustainability, and Law: The Future of Governance, Legal Frameworks, and Lawyers? Delaware Journal of Corporate Law, 43 (2), 303-345.

[3] Heminway, J. M., Sulkowski, A. J. (2019). Blockchains, Corporate Governance, and the Lawyer’s Role. Wayne Law Review, 65 (17), 17-55.

[4] Berger-Walliser, G., Sulkowski, A. J., & Shrivastava, P. (2017). Using Proactive Legal Strategies for Corporate Environmental Sustainability. Michigan Journal of Environmental & Administrative Law, 6 (1), 1- 35.

[5] Sulkowski, A. J. (2020). The Tao of DAO: Hardcoding Business Ethics on Blockchain. Business & Finance Law Review, 3 (2), 146-169.

[6] Sulkowski, A. J. (2016). City Sustainability Reporting: An Emerging and Desirable Legal Necessity. Pace Environmental Law Review, 33 (2), 278-299.

[7] Hughey, C. & Sulkowski, A.J. (2012). More Disclosure = Better CSR Reputation? An Examination of CSR Reputation Leaders and Laggards in the Global Oil & Gas Industry. Journal of the Academy of Business and Economics, 12 (2), 24-34.

[8] Wu, J., Liu, L. & Sulkowski, A.J. (2011). Environmental Disclosure, Firm Performance, and Firm Characteristics: An Analysis of S&P 100 Firms. Journal of the Academy of Business and Economics, 10 (4), 73-84.

[9] Sulkowski, A.J., Barboza, J. P., Vaillancourt, J. & Studnicka, A. (2011). What Aspects of CSR Really Matter: An Exploratory Study Using Workplace Mortality Data. International Academy of Business and Economics Proceedings.

[10] Sulkowski, A. J. (2010). The Growing Trend of Voluntary Corporate Responsibility Disclosure and Its Implications for Real Estate Attorneys. Real Estate Law Journal, 38 (4), 471-481.

[11] Walsh, C. & Sulkowski, A.J. (2010). A Greener Company Makes for Happier Employees More So Than Does a More Valuable One: A Regression Analysis of Employee Satisfaction, Perceived Environmental Performance and Firm Financial Value. Interdisciplinary Environmental Review, 11 (4), 274-282; see also Sulkowski, A.J. & Walsh, C. (2011). Employee Satisfaction and Environmental Reputation. Ökologisches Wirtschaften, 2/2011, 12-13.

[12] Sulkowski, A. J., Parashar, S.P. & Wei, L. (2008). Corporate Responsibility Reporting in China, India, Japan, and the West: One Mantra Does Not Fit All. New England Law Review, 42 (4), 787-808.

[13] Sulkowski, A. J. & Waddock, S. (2013). Beyond Sustainability Reporting: Integrated Reporting Is Practiced, Required & More Would Be Better. University of St. Thomas Law Review, 10 (4) 1060-1123.

[14] Sulkowski, A. J. & White, D. S. (2009). Financial Performance, Pollution Measures and the Propensity to Use Corporate Responsibility Reporting: Implications for Business and Legal Scholarship. Colorado Journal of International Environmental Law and Policy, 21 (3), 491-514.

[15] Wu, J., Liu, L. & Sulkowski, A.J. (2011). Environmental Disclosure, Firm Performance, and Firm Characteristics: An Analysis of S&P 100 Firms. Journal of the Academy of Business and Economics, 10 (4), 73-84.

[16] Sulkowski, A. J., Edwards, M., & Freeman, R. E. (2018). Shake Your Stakeholder: Firm Initiated Interactions to Create Shared Sustainable Value. Organization & Environment, 31 (3), 223-241.

[17] Heminway, J. M., Sulkowski, A. J. (2019). Blockchains, Corporate Governance, and the Lawyer’s Role. Wayne Law Review, 65 (17), 17-55.

[18] Berger-Walliser, G., Sulkowski, A. J., & Shrivastava, P. (2017). Using Proactive Legal Strategies for Corporate Environmental Sustainability. Michigan Journal of Environmental & Administrative Law, 6 (1), 1- 35.

[19] Sulkowski, A. J. (2007). Cyber-Extortion: Duties and Liabilities Related to the Elephant in the Server Room. Journal of Law, Technology and Policy, (1), 21-63.

[20] Sulkowski, A. J. (2019). Industry 4.0 Era Technology (AI, Big Data, Blockchain, DAO): Why The Law Needs New Memes, Kansas Journal of Law & Public Policy, 29 (1).

[21] Alexander, M., Sulkowski, A. J., & Wiggins, W. (2016). Sustainability & Tax Policy: Fixing a Patchwork of Policies with a Coherent Federal Framework. Virginia Environmental Law Review, 35 (1), 1-58.

[22] Sulkowski, A. J. & Greenfield, K. (2006). A Bridle, a Prod, and a Big Stick: An Evaluation of Class Actions, Shareholder Proposals, and the Ultra Vires Doctrine as Methods for Controlling Corporate Behavior. St. John’s Law Review, 79 (4), 929-954.

[23] Sulkowski, A. J. (2009). Ultra Vires Statutes: Alive, Kicking, and a Means of Circumventing the Scalia Standing Gauntlet in Environmental Litigation. Journal of Environmental Law and Litigation, 24 (1), 75-118.

[24] Sulkowski, A. J. (2017). University Experiential Learning Partnerships as Living Laboratories for Sustainability. Peer-reviewed chapter in book: SUSTAINABILITY IN MANAGEMENT EDUCATION: IN SEARCH OF A MULTIDISCIPLINARY, INNOVATIVE AND INTEGRATED APPROACH THROUGH UNIVERSITY LEADERSHIP, SCHOLARSHIP AND PARTNERSHIPS (Edward A. Arevalo and Shelley F. Mitchell, eds.), Edward Elgar.

[25] Bagley, C. E., Sulkowski, A. J., Nelson, J. S., Waddock, S., & Shrivastava, P. (published online November 7, 2019). A Path to Developing More Insightful Business School Graduates: A Systems-Based, Experiential Approach to Integrating Law, Strategy, and Sustainability, Academy of Management Learning & Education (in press).

[26] Sulkowski, A. J. & Waddock, S. (2016). Midas, Cassandra & the Buddha: Curing Delusional Growth Myopia by Focusing on Thriving. Journal of Corporate Citizenship, 61, 15-43.

[27] Sulkowski, A. J. & White, D. S. (2016). A Happiness Kuznets Curve? Using Model-Based Cluster Analysis to Group Countries Based on Happiness, Development, Income, and Carbon Emissions. Environment, Development and Sustainability, 18 (4), 1095-1111.

[28] White, D. S. & Sulkowski, A. J. (2010). Relative Ecological Footprints Based on Resource Usage Efficiency Per Capita: Macro-level Segmentation of 121 Countries. International Journal of Sustainable Economy, 2 (2), 224-240; Sulkowski, A. J. & White, D. S. (2009). Consumption of Energy, CO2 Emissions and Materials Usage Efficiency per Capita: A Cluster Analysis of Europe and Eurasia. Global Management Journal, 1 (1), 55-65.

[29] Sulkowski, A. J. & Vardaro, N. (2011). Sid Wainer & Son: A Growing Realization. Academy of Legal Studies in Business.

[30] Sulkowski, A. J. (2010). There’s Gold in Them Thar Brownfields: The Legal Framework of Brownfielding and Some Tips on for Getting Started. Real Estate Law Journal, 39 (1) 100-112.

[31] Sulkowski, A. J. (2017). Rodolfo’s Casa Caribe in Cuba: Business, Ethical & Legal Challenges of Investing in a Start-Up in Havana. Journal of Legal Studies Education, 34 (1), 127–162.

A recent post about the founding of Babson resonates on the occasion of this week’s Climate Action Summit. Here’s why:

• our founder believed data can help businesses act more responsibly. This is a focus of my research and writing and this is a hot topic, now more than ever. For example, articles on the potential impacts of blockchain on sustainability disclosures and greener supply chains and governance are here and here, respectively. I’ve also prepared sustainability reports, and noted cities should also see them as essential as a step to acheiving net zero environmental harm.
• he embodied entrepreneurship and far-sightedness by (1) making his fortune in selling analyses of investments and business conditions and then (2) reinvesting in businesses with positive social impacts. Both of these are part of the $26 Trillion in estimated economic opportunities in decarbonization (for example, Las Gaviotas illustrates how to profitably restore rainforests).
• he did his best to shake people out of complacency when the status quo was not sustainable prior to the crash of 1929. With Mel Edwards and Ed Freeman, we noted this is a pattern among visionary business leaders, especially now.

For these and other reasons described below, it’s clear that Roger Babson would be excited about the opportunities in the current era of #ClimateAction.

Repost follows:

Happy 100th birthday, Babson College!

In a 1930 issue of The New Yorker magazine, Henry F. Pringle profiled Roger Babson and explained his motivations for founding Babson College, which the author described as the entrepreneur’s “greatest enthusiasm” — on par, the author suggested, to having a child.

Short version:

(1) the Seer of Wellesley Hills (as Roger Babson was known for predicting the crash of 1929) likely would have endorsed our learning goals,

(2) his founding motivation — his belief in the dire need for infusing business leaders with a sense of ethics and societal responsibility — resonates now, as does the fact that

(3) he believed that measurement and reporting data about business organizations can benefit investors and all of society (a focus of my research).

The whole 3-page article is worth a read. Here are highlights:

Why did he found our school?

“What America needed, he decided… was men [reminder: this was written in 1930 — we would now use the word ‘people’] trained for the responsibility of wealth, and so he founded a school like no other in the country.” His father Nathaniel had judged Harvard, Amherst, and Williams to have been “breeding-places for idleness” (Roger had been allowed to attend that other Boston area school with a beaver for a mascot, MIT).

What were the roots of his values, and what were they?

“He comes of New England stock, and is a sternly religious person who makes a clear distinction between investment and speculation. His forebears, knowing that the Lord would frown if profits came too quickly, found satisfaction in toiling for a living. Mr. Babson feels the same way. This leads him to make rigid distinctions between speculation and investment, and to exhort his clients against purchases on margin.”

Given these strong religious feelings (he said “there is an excess of everything except religion” in the United States, and several of his authored books concerned religion or morality), it is especially interesting that Roger Babson founded an educational institution for scions of “Captains of Industry, of millionaires. They will control the destinies of thousands of employees.”

What was his vision for the world?

“Roger Babson has often dreamed of a world in which there would be no war, no bitter contrast between affluence and poverty, no labor disputes.” He also had a theory as to whom to blame for disputes with employees. “He felt that labor disputes were the result of bad management on the part of capital, and he pondered several solutions. One was to prevent the ownership of great industries from passing by inheritance to sons utterly unqualified to run them. He went so far as to question all inheritances.”

The author of the profile allows himself to editorialize at one point, writing that “Roger Babson has often been strangely radical in his utterances on capital and labor,” and (presumably) Pringle imagines that “[t]here was a sulphurous odor of socialism in the air” when Babson testified before a federal industrial commission. “He said bluntly that too many industries were controlled by bankers indifferent to the needs of the wage-earner. They were interested only in dividends. Finally, one nervous commissioner asked him whether this was not sheer socialism.”

Babson’s answer to the question of whether his concerns for societal and employee well-being smacked of socialism are worth remembering:

“‘When a man is asked for a definition of a gentleman,’ Mr. Babson replied, ‘he gives one that will include himself. When asked for a definition of socialism he gives one that will exclude himself.’”

Roger Babson felt sympathy for investors; he “pride[d] himself that he represents the buyer of securities, while the vast machinery of Wall Street is organized for the benefit of those who sell.” He also warned that “bank mergers may be carried too far and subject America to new perils.”

Especially interesting for those of us who are fans of data, birds, and conservation:

Roger Babson was convinced that “statistics could prevent international complications” (indeed, he started earning his fortune by providing statistical services to investors) and was an ornithologist in later years who created two bird sanctuaries.

A final two quotes about Roger Babson seem worthy of highlighting. First, “[u]tility, rather than form, interests him,” and, finally, “in his late twenties, he became a salesman, and traces of the art still linger. Thus he is never at a loss for words. Thus he is not unwilling to look back across the years and relate the story of his achievements.”

May we, as we look past the finish line of 100 years and plan for sustaining Babson’s legacy into a second century, likewise celebrate our successes in living up to our founder’s aspirations for “his greatest enthusiasm.”

By Professor Adam Sulkowski, with the encouragement and endorsement of Professor JB Kassarjian. Originally posted in Babson Blogs on August 31, 2016.

The author wishes to thank our colleagues in the Economics Division for leaving a photocopy of the quoted profile pinned on a bulletin board in their cozy retreat in the woods. The full article may be found on pages 23–25 of the February 15, 1930 issue of The New Yorker magazine.

Above: Paolo explains what makes his 50 years of green innovation unique in his office in Bogotá, Colombia. Photo credit: Professor Mónica Ramos Mejía.

An earlier version of the text below was originally posted on Medium. Links to further reading follow.

50 years ago Colombian green entrepreneur Paolo Lugari initiated the experimentation that resulted in a self-sufficient reforestation community called Las Gaviotas, a model of a restorative enterprise. Both in Colombia and the rest of the world, his approach to thought and action are worthy of emulation. Thanks to Paolo and Professor Mónica Ramos Mejía of Pontificia Universidad Javeriana for conversations in Bogotá and help in memorializing the following take-aways.

We should start with briefly acknowledging context. In addition to decades of armed conflict, severe weather abnormalities have also catastrophically impacted Colombia. The flooding caused by the La Niña Phenomenon of 2010–2011 affected more than 94% of Colombian territory. In response to the ensuing destruction of lives, homes, and businesses, the Colombian government established the Climate Adaptation Fund to rebuild infrastructure and construct resiliency projects such as flood defenses. As elsewhere in the world, it is surprising that governmental and private actions on climate have not been a more prominent topic in recent political discourse.

However, most remarkably overlooked in recent coverage of Colombia is the 50th anniversary of the founding of an independent prototype community and the 40th anniversary of its development of an economically viable means of reforestation. This community — Las Gaviotas — and its driving ethos are noteworthy: given the right conditions, its operations and approach to problem-solving could be replicated and scaled-up. Its innovations have long impressed observers, from Gabriel Garcia Marquez to career development specialists, with its potential to impact the future course of life on earth.

Las Gaviotas is a village founded in the late 1960s in the parched grasslands of Eastern Colombia. There, its founder, Paolo Lugari, and other experimenters began planting tropical Caribbean pines to create conditions that allow the latent seeds of rainforest plants and other rainforest seeds dropped in the scat of birds to germinate and grow. For decades, an average population of 200 people has harvested the pine resin on 8000 hectares, processing and selling it as turpentine, colophony, and (on a limited scale due to regulations) “energized pine oil” that fuels standard combustion engine cars and trucks (produced through what they call “a physical processes, rather than chemical, changing the technological paradigm, and resulting in a less polluting variety of biodiesel”). The community’s primary side effects are carbon capture and rainforest rebirth.

As described in the articles and book linked below, community members also invented low- or entirely non-carbon emitting means of providing water, food, energy, and even health care services.

Earlier this year, we asked Paolo several questions about the current state of Las Gaviotas and its potential, given the right conditions, to inspire a wave of prosperous reforestation in Colombia and beyond.

“Stronger than ever!” is how Paolo would characterize both Las Gaviotas and his drive to keep working, but “Gaviotas is sustaining at its optimum size. It’s now a model to inspire other initiatives, and imitation has not happened before because of the armed conflict.”

Other key take-aways are as follows: “A tropical way of thinking” is needed, according to Paolo. Echoing other visionaries, he continues to eschew overplanning, dispensing with traditional planning templates and preferring to focus on immediate action: “the best way of saying it is doing it — taking a trial and error approach.” If they had worked according conventional guidelines of project management, Paolo says, “no one would have forecasted that Gaviotas was feasible” — in other words, a venture with restorative effects (sequestering, by their calculations, 89 tons of CO2 for every 1 ton of CO2 emitted) could not have been imagined or deliberately planned, much less realized.

A self-sustaining community that restores the environment may seem far-fetched. But as green business entrepreneur and guru Gunter Pauli has said, speaking about Las Gaviotas: “if it exists, then it must be possible.” And Las Gaviotas and its people have deliberately never patented their know-how — all of it can be freely copied.

So are we to be optimistic about the future? Paulo’s response is that “it is criminal to be pessimistic.”

Like any seeds, ideas for environmentally restorative reforestation solutions such as those proven at Las Gaviotas could be replicated, given supportive conditions for germination and growth. Gaviotas-style thinking deserves our awareness and encouragement, both within and outside of Colombia.

For further reading on Las Gaviotas:

2009 New York Times article by Simon Romero.

2008 Book by Alan Weisman.

2007 World Watch article by Richard E. White and Gloria Eugenia González Mariño.

For further reading on the Colombian Climate Adaptation Fund:

Website of the Colombian Climate Adaptation Fund.

On the 20th anniversary of the publication of his seminal book, Cannibals with Forks, John Elkington answers questions on the state of the sustainability movement and how he maintains optimism (originally published in the Huffington Post on July 10, 2017).

John Elkington (left) and Adam Sulkowski (right) at the Volans office in London, June 23, 2017.

John Elkington is co-founder of ENDS, SustainAbility, and Volans and author of 19 books. He coined terms such as “green consumer” and “triple bottom line” and has been recognized in several rankings and lists as one of the world’s most influential authorities on sustainable business. John published Cannibals with Forks in 1997. It was a seminal work on strategy, business models, value creation, and mega-trends, and also popularized how sustainability reporting (that is, disclosing data on economic, environmental, and societal impacts) might serve as a fork—a civilizing first step—to start taming the unsustainable excesses of companies. John clarifies that the fork analogy (borrowed from an aphorism by Stanislaw Lec) relates to the fact that companies act like cannibals, gobbling each other up and spitting bits out. The question was whether learning to do this a 3-tined fork, (i.e. triple bottom line—or TBL—reporting), would represent progress.

Here are some big take-aways, distilled from our lengthy conversation on June 23, 2017, in his London office on Bloomsbury Place:

Q: What would you write about now?

A: “It would not be about sustainability reporting! But if I were to write about it…

…it would be that corporate sustainability reporting has become a ghetto for a specialized audience and that companies don’t even read their competitors’ reports. In my work with the GRI and IIRC, I advocated for a reframing: that reporting should break out of silos, that it should be more searchable by anyone, democratizing, widely disseminated, truthfully tracing multiple forms of capital through the supply chain, using immediate data on all impacts at any level, with the granularity of Google Earth. It could use satellite sensing to allow for zooming from a square meter of soil to the planetary scale—Planet Labs, eRevalue, Good Guide, and Arabesque—these are all promising starts on making sustainability reporting understandable.”

On the issue of why reporting standards have become complex and what it would take to make sustainability data user-friendly and actionable, John added: “Now we have access to data that would have been inconceivable 30 years ago thanks to the Carbon Disclosure Project, Bloomberg, CarbonTracker, GRI. But we need a vision. A coherent one. Complexity is just what happens when you go for complexity because of a complex world. So we need a vision of reporting that informs decisions. As Bucky (Buckminster Fuller) said: ‘we did not get a user manual for running the planet.’”

…and in 40-50 years sustainability reporting may be ubiquitous-yet-invisible…

“Originally triple bottom line reporting was meant to be a whack to the head of business leaders. As Ernst Ligteringen clarified, it was to change mindsets. In 40-50 years, we may see the reporting of today as Stone Age—by then, we will be instantly, seamlessly and radically connected to data. Sustainability data could be a part of life without even thinking of it—the closest analogy being weather reports.”

…instead, John would now write about disruptions needed for systemic change, specifically:

(1) “The sustainability industry is perhaps most in need of disruption. There is some ‘putting old wine in new bottles.’ We can no longer talk about 10% improvements as success. Nor even 10x. We need 100x improvements.”

(2) “There are incumbents versus insurgents. We’ve helped incumbent companies see their business cases [for sustainability]. But that is not what the insurgents want—we are at risk of failing them. 30 years ago we were helping get Greenpeace into corporations. 15 years ago we were introducing social entrepreneurship to the corporate world. Now we need to be less incrementalist, more transformative.”

(3) “Increasingly, we should focus on the insurgents and what they want – on how their innovations can be aggregated, engaged, and brought to scale. Machine learning, artificial intelligence, autonomous vehicles, robotics, the internet-of-things and synthetic biology are all developing at a furious rate. There are 30-40 technologies easily that are part of this, whereas in a normal industrial revolution, it is just 3, 4, or 5 industry technologies changing. These technologies will hybridize to form different ones. But there will be friction. Uber illustrates the collisions between emerging and current social norms. Uber may be a hyper-successful insurgent, but it has been badly dented because it didn’t understand the issue of social norms.”

(4) On the role of cities in sustainability innovation as a worthy focus: “I was trained as a city planner, and used to see cities as tumors, divorced from their impacts. Now I see them [cities] as incubators, creating markets for new technologies, products and services.”

(5) John noted that “2017 is also the 30th anniversary of the Brundtland Commission Report, with its emphasis on intergenerational equity. If I were a young person I would be absolutely incensed [at the previous generation], and I would be thinking ‘you screwed us!’” Noting the [typically] superior resources and networks of seniors and the ideas and drive of youth, he went on: “there is a need for intergenerational work – bridge-building – getting older and younger generations to work together more.” He offered Encore as an early indication of what will be needed.

Q: In your book, The Breakthrough Challenge, you describe the need for businesses to disrupt their ecosystems to bring about systemic change. Elsewhere you have noted the value of memes. Mel Edwards and Ed Freeman (the father of stakeholder theory) and I just had an article accepted for publication about stakeholder shaking—it’s a meme we came up with to describe the phenomenon of companies shaking stakeholders and networks of stakeholders out of complacency—do any great examples of this come to mind?

A: “Decades ago, our struggle was getting NGOs into the midst of business leaders, but it was business leaders who challenged and sometimes coopted NGOs. Novo Nordisk is an example of what you describe: seeing that the cost of diabetes could collapse healthcare systems, they saw the need to address a different set of stakeholders, and started educating health care authorities and city administrations on the need for dietary and exercise solutions to slow the spread of diabetes. This has the added benefit of building trust. Covestro is another example. Its CEO, Patrick Thomas, describes it as an 82-year-old, 16,000 employee, $12 billion start-up. In this case, they are trying to help others see carbon as an asset and ask: ‘how do we assist in coming up with breakthrough solutions?’”

Q: What would you like to tell educators – what’s your message for academia?

A: “Sustainability right now is still seen as just one more option, or elective. But in 15-20 years, it will fundamentally inform everything that is taught in business schools. I realize that rankings can prevent schools from taking risks, but learning journeys—as illustrated by Leaders’ Quest—are extremely valuable and powerful, especially when they involve contexts outside of students’ comfort zones.”

Q: Who else has succeeded as much as Interface in terms of setting and meeting ambitious goals along the way to achieving net zero harms?

A: “From memory, Ray Anderson, the founder and CEO, still owned something like 60% of the shares, so he could more or less do what he wanted—which is a very different situation from most other companies. That said, other positive examples include Unilever, Tesla, Solar City, Novo Nordisk, and major car companies Ford, Nissan and Volvo, to some extent.”

Q: In previous interviews you’ve said you’re an optimist. How do you maintain your optimism? Is it because of trends that you see, or despite them?

A: “I do go though periods of gloom. I stay inspired by constant conversations with people and encountering new ideas. And there is always just enough progress to stay broadly optimistic. Our species tends to do its best work when backed into a corner—and, as the Anthropocene epoch builds around us, now we have backed ourselves into the mother of all corners.

I never thought about my legacy, but now I think, if there was one word to put on my tombstone, it would be ‘environmentalist.’ Nature brought me in. To your point on trends: take, for example, eels [which sparked John’s early awareness of ecology as a child]: I’m aware that they have experienced a collapse of 99.5% in Europe, with similar patterns in N. America, and Asia, and these are a keystone species. As a member of the WWF UK Council of Ambassadors, I am uncomfortably aware of such grim trends, but I guess I probably blank them out much of the time.”

Q: Would you want to write a book—a 20 year retrospective on Cannibals with Forks? Maybe Cannibals with Spoons—to reflect the increasingly fluid context of business, to which you alluded in the Coda (the final chapter) of Cannibals with Forks?

A: “No, when I write a book I do not want to cover ground I have already explored.”

Q: There seems to be a tension between prognoses you recently offered—is the next decade the “detox decade” or a “bottoming-out”?

A: “Both, I think. One problem is that we seem to be in something of a ‘contained depression’, which means that the normal processes of creative destruction are blunted. But, in the end, unsustainable parts of the economy will flame out. The detox decade is another way of viewing the bottom of the economic U-turn we are heading into, where an old order disassembles and a new one struggles to be born.”

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Follow the latest updates from John Elkington on Twitter at @VolansJohn.

Adam Sulkowski is on Twitter at @Adam_Sulkowski.

Source: Investing in Cuba: 1 key step Trump is unlikely to change

U.S. and Chinese mayors are discussing climate action this week. One idea sure to come up: sustainability reporting. In fact, cities should disclose sustainability data as a minimum legal expectati…

Source: City Sustainability Reporting: An Essential Best Practice

U.S. and Chinese mayors are discussing climate action this week. One idea sure to come up: sustainability reporting. In fact, cities should disclose sustainability data as a minimum legal expectation if they want to be part of the roughly $3.7 trillion U.S. market in municipal securities.

Boston, Massachusetts and Warsaw, Poland are among the many cities making a wide range of city data very accessible – including statistics on energy and water use and recycling. Whether you care about efficiency, education, prosperity, safety, or health, isn’t it desirable to be able to check your community’s stats and trends?

This is especially true when it comes to environmental impacts. The idea of getting to #NetZero harm – the practically self-evident idea that humanity has to neutralize its negative effects on the climate and ecosystems – is finally getting traction. Eliminating environmental harms requires better efficiency and begets innovation, and can lead to prosperity and improvement in well-being. Cities – foremost among them coastal cities – have much to lose and much to gain from unmitigated climate chaos, and therefore have to be champions for better measurement and tracking of environmental data. “If you can’t measure it, you can’t manage it and you can’t fix it,” as former New York City mayor Michael Bloomberg has summarized.

Even for the most strictly short-sighted, financially-motivated, and narrowly self-interested among us, awareness of the long-term viability of a city is something that a reasonable investor should expect when purchasing municipal securities, as explained in City Sustainability Reporting: An Emerging & Desirable Legal Necessity (soon to be published by Pace Environmental Law Review).