The University Record, November 5, 2001

Gladwin offers vision for sustainability

Editor’s Note: The Oct. 29 issue of the Record included a rationale from Fathom for why sustainable development matters as written by Thomas Gladwin, the Max McGraw Professor of Sustainable Enterprise. The following is the second part of his Gladwin’s article. The entire article, complete with figures, is available for viewing at fathom.com.

By Thomas N. Gladwin

All business—in any form, in any place, at any time—is directly or indirectly, immediately or eventually affected by ecological and socio-economic deterioration wherever this occurs. Business takes place within, and is thus dependent upon, the vital “life support” services provided by the biosphere. Corporate welfare is equally dependent on healthy social systems. Business worlds would cease to thrive without educated citizens, public safety and order, a supply of savings and credit, legal due process, or the observance of rights.

It would thus seem logical for business to protect, maintain and restore the integrity, resilience and productivity of such vital life support services, a premise that leads inexorably to a conception of the moral corporation.

To paraphrase Christian philosopher Albert Schweitzer: “It is good to preserve, promote and raise to its highest value, life capable of development; it is evil to destroy, injure, and repress life capable of development. This is the absolute fundamental principle of the moral. A man (business) is ethical only when life, as such, is sacred to (it).”

The core idea of sustainable development was most influentially defined by the World Commission on Environment and Development as “that which meets the needs of the present without compromising the ability of future generations to meet their own needs.” Hundreds of derivative definitions have followed, and the notion appears set to remain fuzzy, elusive or contestable for some time to come. This is to be expected during the emergent phase of any new, big and generally useful idea. There is broad agreement that ensuring future generations are no worse off than the present one requires the maintenance of welfare-yielding capital endowments. A sustainable society lives off the “income” generated from its stocks of capital, not by depleting these. There are differences of opinion over attempts to specify the exact assumptions, conditions and rules for ensuring development paths that are both fair to different generations and efficient over time.

Different types of capital must be maintained intact separately, for the productivity of each depends on the availability of the others. We can thus appraise the workings of manufactured capital (i.e., stocks of producer and consumer goods such as factories, buildings, machines, tools, technologies, infrastructure and products) according to their consequences for four types of primary (enabling or limiting) capital:

1. Ecological (i.e., renewable, cyclical, biological resources, processes, functions and services)

2. Material (i.e., non-renewable or geological resources such as mineral ores, fossil fuels, fossil groundwaters)

3. Human (i.e., people’s knowledge, skills, health, nutrition, safety, security, motivation)

4. Social (i.e., relating to civil society, social cohesion, trust, reciprocity norms, equity, empowerment, freedom of association, orderliness and so forth that facilitate coordination and cooperation for mutual benefit).

A truly sustainable society is one that organizes its economy to ensure the maintenance of its stocks of ecological, material, human and social capital, thus adhering to that prudent ancient wisdom of “not eating thy seed corn.”

A society would become increasingly sustainable (boosting its capacity for continuance) as it organizes its economy to invest in and expand existing stores of primary capital. Such restoration lies at the heart of “natural capitalism,” according to a book by Paul Hawken, and Amory B. and L. Hunter Lovins.

The impoverishing zone is a society that maintains itself only through the exhaustion and dispersion of a one-time inheritance of natural capital (e.g., topsoil, biodiversity, groundwater, fossil fuels, and minerals) with no investment in conservation or replacement. This is a society (too common, sadly, today) that disinvests in its people, especially its children, and permits the forces of mobile economic capital, elite detachment and special-interest politics to atrophy civic and social communities.

The zone of naturalizing is where the operations of the economy are increasingly brought into conformity with natural imperatives. This comes at the expense, however, of human and social capital, at least transitionally.

Examples might include “eco-inspired” agricultural biotechnology that threatens traditional farmers with redundancy or cleaner automated factories that eliminate assembly and manufacturing jobs. In the absence of alternative sources of sustainable livelihood, these supposedly “environment-friendly” developments could set in motion powerful forces of social decomposition and political upheaval. Naturalizing, in the absence of concomitant attention to the human condition, may be self-defeating.

A similar logic applies to a zone of humanizing, where the operations of the economy are progressively endowed with a human character. This is at the expense, however, of diminishing natural capital. Examples might include the development of housing communities on drained wetlands, or logging, which causes deforestation. Jobs or communities constructed on the basis of systemic depletion of natural capital will obviously be unsustainable over the longer term. Humanizing and naturalizing are fundamentally complementary.

This leaves the only genuine sustaining zone. Economic and technological development here are simultaneously people-centered and nature-based. Damage to ecosystems is prevented, biological diversity and productivity are conserved, the entropic physical flow of energy and matter is moderated, and the economy is converted to rely on perpetual resources and resilient technologies. The sustainable society communalizes its civic order and decision-making, democratizes its political and workplace environments, humanizes capital creation and work, and vitalizes human need fulfillment, ensuring sufficiency in meeting basic needs.

These macro-level principles of sustainable development unfold into myriad sub-principles, guidelines and metrics for application at the micro-level.

The ecologically sustainable enterprise would:

  • Eliminate harmful discharges into the biosphere;

  • Use renewable resources, such as forests, fisheries and fresh water at rates less than or equal to regeneration rates;

  • Preserve as much biodiversity as it appropriates;

  • Seek to restore ecosystems to the extent that it has damaged them;

  • Deplete non-renewable resources such as oil at rates lower than the creation of renewable resource substitutes providing equivalent services;

  • Continuously reduce risks and hazards;

  • Dematerialize, substitute information for matter;

  • Redesign processes and products into cyclical material flows, thus closing all material loops.

    The socially sustainable enterprise would:

  • Return to communities where it operates and sells as much as it gains from them;

  • Include stakeholders affected by its activities in associated planning and decision-making processes;

  • Ensure no reduction in, and actively promote the observance of, political and civil rights in the domains where it operates;

  • Widely spread economic opportunities and help to reduce or eliminate unjustified inequalities;

  • Ensure no net loss of human capital within its workforces and operating communities;

  • Cause no net loss of productive employment;

  • Adequately satisfy the vital needs of its employees and operating communities;

  • Work to ensure the fulfillment of the basic needs of humanity prior to serving luxury wants.

    Transformational leadership

    Sustainable development is an idea whose time has come but it is important to acknowledge the extraordinary barriers that stand in the way of its general acceptance and achievement. These include: mechanistic thinking; conventional wisdom promoting growth; consumption and techno-fixes; institutional structures such as perverse governmental subsidy and tax systems; and the profound forces of inertia compounded by vested interests and denial. I am strongly encouraged by the emergence of a well-informed and visionary set of corporate leaders who have taken up the challenge of orienting their companies to support a sustainable human future.

    These transformational leaders can be found, for example, in family-led enterprises; entrepreneurial ventures into renewable resources; companies which have learned from public controversies; “culturally programmed” Scandinavian enterprises; and companies getting out of commodity businesses into more knowledge-intensive life sciences.

    Large-scale organizational transformation toward sustainability is a long-term and multi-level challenge, entailing a range of reinforcing roles and tasks. Vivid images of sustainable futures must be painted. A sense of stretch must be instilled. Organizational purpose, identity and meaning must be aligned with ecological and social contribution. Leaders must challenge embedded assumptions by asking tough questions: what is our ecological and social footprint? Do customers really need our products, or just their functions or services? Are we focusing on “excessities” or necessities? Are we creating genuine value for society or appropriating value from it? What is our rightful place in the world?

    Implementation must be energized by dramatic changes in management incentives, internal information systems and external performance reporting. Major in-house learning programs must be mounted to boost awareness, literacy and strategic excitement. Supportive organizational values and ethical principles must be infused. High impact partnerships with other companies and governmental/non-governmental organizations must be forged. Finally, leaders for sustainability must take on the hard work of lobbying for public policies and institutions that truly work on behalf of a sustainable future.

    “Between the idea and the reality, between the conception and the creation, falls the shadow,” said T.S. Eliot. The notions of sustainable development and enterprise currently lie in this shadow. The central task of corporate leaders moving into the next century, both through aspiration and inspiration, is to bring them into the light.