Green business is the way to go

By VICKI JAYNE

While United States President George W. Bush has pulled the plug on a commitment to reduce carbon emissions, the US chairman of Ford Motor Company has pegged climate change firmly to the top of his company's agenda.

Bill Ford (great-grandson of the famous Henry) has argued for a 50c-a-gallon rise in gas taxes, taken Ford out of the anti-environmental Global Climate Coalition and has set the company a new goal.

"[It] has to be nothing less than an emission-free vehicle that is built in clean plants," he says.

Ford is now aiming to be an enterprise whose decisions can restore the environment and contribute to the creation of social and economic equity in communities around the world.

Such ambitions have a gratifying ring of changing times for the man who pioneered the notion that companies should take into account the triple bottom line of economic prosperity, environmental quality and social justice - John Elkington.

One of the world's leading authorities on sustainable development and related strategies for business, Mr Elkington is in New Zealand this week to outline the business case for corporate pursuit of sustainable practice at an Auckland conference.

That case is stronger than ever.

A few years back, says Mr Elkington, the business case would have been neutral - that is, not too much evidence of bottom-line gains.

"Now, what we've found from looking at what has been going on around the world is that the business case is going net positive."

Sustainability UK, the company set up by Mr Elkington in 1987, recently released the results of its long-term survey on worldwide environmental reporting, The Global Reporters. In a report entitled Buried Treasure, it has further teased out the links it found between corporate leadership in areas of environmental sustainability/social responsibility and the creation of business value.

Included is a user-friendly map of the state of evidence linking 10 dimensions of sustainable development (eg: ethics and values, triple bottom-line commitment, environmental process focus, human rights) with 10 more traditional measures of business success (eg: shareholder value, revenue growth, customer attraction, innovation).

Mr Elkington notes that companies able to handle corporate social responsibility or sustainability issues tend to be those that are much better at handling things generally.

It's about an ability to see the bigger picture and take a visionary, innovative approach to change.

"Sustainable development is essentially an early warning signal to companies that there are a set of discontinuities coming down the track - some to do with climate change, some with depletion of natural resources, some from demographic pressures," he says.

"But there are also some advances happening in underlying technology that can change the way people do things. Innovation could be the key to pushing necessary changes, rather than laws."

Mr Elkington has been interviewing business leaders like Bill Ford for his forthcoming book, The Chrysalis Economy.

"What I found is that most of these people are absolutely convinced that the world is changing - and far faster than many of their colleagues realise. The result is that they are starting to open up in ways that would have been unheard of a few years ago."

Such people are to some extent stepping into a visionary vacuum left by politicians and helping to provide a more market-driven incentive for pursuing sustainability.

Ford's R&D efforts are now being poured into electric cars and alternative fuel technologies. In the not-too-distant future, it could be selling mobility services rather than just cars. Instead of having to own a vehicle, you just collect one as-and-when needed from a mobility depot by swiping a smartcard.

Shifting sales focus from products to services puts the onus on the manufacturer to maximise product efficiency, and minimise waste by making parts that can be readily replaced or recycled.

Promoting that tack are people such as Amery Lovins, whose Rocky Mountain Institute provides business with advice and research based on the concept of natural capitalism. Simply put, this involves factoring the cost of natural capital (air, water, resources, etc) into all product manufacture and service provision.

The first industrial revolution, says Mr Lovins, was predicated on a shortage of people and apparent abundance of natural resources.

The solution supplied by technology innovation was to increase the productivity of people, he says. The present industrial revolution needs to apply the same logic but in reverse, as we now have abundant people but scarce nature.

It therefore makes sense, says Mr Lovins, to use nature far more productively, to bring four, 10 or 100 times more benefit from each unit of energy, water, fibre, minerals, topsoil, etc - and to wring waste out of the system.

Mr Lovins credits corporates with having the sense to address such issues. He points to the fact that early adopters of the next revolution's "Natural Capitalist" principles are finding they have not just gained greater short-term profitability but impressive competitive advantage.

Which is pretty much Mr Elkington's message. The business case is proved.

"There's been a long incubation period but, for a variety of reasons, the momentum for sustainable development is now building rapidly."

Longer-term success still faces the hurdle of too short term an approach to business value creation.

Hence Mr Elkington's chrysalis concept - that companies must be sensitised to a gestation time of around 30 years before they successfully implement the innovative, sustainable business concepts that will truly make them fly.

* vjayne@iconz.co.nz