WHAT IS A SUSTAINABLE CORPORATION?

This article looks into what a sustainable corporation is. What can we distil from the worlds of sustainability and business? What is the DNA of a sustainable corporation?

dna

These issues will of course vary. Different businesses operating in different industries or vertical markets will need to prioritise according to their specific needs.

But I would say that it is necessary to perform strongly in all of the following areas to be considered to be a sustainable corporation.

There are two extremely powerful numbers in sustainability, 100 & 0. I remember reading John Elkington’s book The Zeronauts: Breaking the Sustainability Barrier in November 2016. John delivers his own considered and powerful insights throughout the book. This article then is my own small homage to the greatest sustainability writer of all time.

1.     Zero faults

A sustainable corporation needs to be a high quality corporation. There are some consumers who are willing to pay for an inferior product with strong social and environmental credentials but they are few in number. Thankfully, sustainability can increasingly be seen as a proxy for good management and more and more organisations are making it a strategic priority.

When people opt for sustainable products or services, they need to be comparable on price and quality with other less sustainable options. This is imperative. If you can make them with higher quality properties, then this is ideal. Many early sustainable options such as recycled paper that was of low quality and that would jam printers were not up to the job. Thankfully the performance of sustainable options is improving all the time.

A company that I have written about before and that I will mention again because of their commitment to total quality management is General Electric. They were one of the most enthusiastic adopters of a zero faults approach. Over time they embedded the ethos into the workforce and into the products they create. This has dovetailed nicely with their more recent growth strategy Ecomagination. General Electric is an industry leader, doing great things on sustainability and their focus on zero faults has played a key part in their success.

A zero faults approach is key to becoming a sustainable corporation.

2.   Zero waste

Waste is a bad thing; it is a word with negative connotations which is impossible to spin in a positive direction. If you have created waste, you have failed and you must readdress your processes.

The waste hierarchy shows the way forward. It should be implemented

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Anyone can order their waste to be collected and sent to a landfill or to an energy from waste plant. That takes no skill or courage. It is bad for the environment and it is wasteful.

Becoming zero waste requires commitment, farsightedness and smart processes. These can involve self-loading single material collections where you can receive a payment for your recyclable materials.

There may be opportunities to re-use materials in some fashion. Again, this requires networking and some degree of effort to match people who are looking for materials that are surplus to your requirements. A great charity that I have been impressed by recently is the Watford Recycling Arts Project (WRAP). They specialise in the recycling and repurposing of ethically sourced commercial waste for creative enterprise. They have a really interesting subscription based business model and they do an incredible job at diverting waste from landfill and incinerators. You can find a link to their website below.

Watford Recycling Arts Project (WRAP) Website

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Higher up the waste hierarchy is the holy grail of waste management, prevention. This strategy offers big savings but it’s often the hardest to do. Preventing waste from being generated is almost always the most sustainable option.

Becoming a zero waste business is a crucial element of being considered as a sustainable corporation.

3.   Zero pollution

Zero pollution is a goal, which like zero waste is challenging to achieve. But the archetypal sustainable corporation must have it as part of their mission statement.

A great company in this regard is Patagonia, who have the following inspiring mission statement.

“Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis”

Again, becoming zero pollution is a lengthy process that requires commitment and smart processes. Some things can be done more easily though, such as procuring renewable energy, having an all-electric fleet and prioritising train travel and video teleconferencing above business air travel.  These quick wins should be targeted early before other more challenging pollution sources are eliminated.

Sustainable corporations have a desire to take less from the earth socially and environmentally and as such they must push to becoming zero pollution businesses.

4.   Zero unethical actions

On paper, this may look like the easiest to achieve, but it is still a tall order. What does your company represent? What do people think about when your company’s name is mentioned? Do they think of a brand that is providing solutions to the world’s problems or do they think of a brand that is adding to the world’s problems.

A key way to demonstrate ethical actions and behaviours is through a commitment to being net positive. Being less bad is not inspirational. Aiming to be net positive can act as a catalyst for sustainable actions and innovations. It’s about giving back more than you take out. In this regard, the Net Positive Project has done much to raise the profile of businesses who aim to behave in the most ethical fashion possible.

Sustainable corporations must aim for zero unethical actions.

What you need to know

This article looked into what a sustainable corporation is. We looked into what the key factors are that make up the DNA of a sustainable corporation. These are:

1.     Zero faults

2.    Zero waste

3.    Zero pollution

4.    Zero unethical actions

Although it is a difficult path to being considered to be a sustainable corporation, it is ultimately worth it.

We looked at examples of companies that have reaped organisational and brand benefits from their commitment to sustainability.

A sustainable future will have to be made up of an economy of sustainable corporations, we need more of them. The key ingredient that cuts through all four of the factors is leadership. We need more bold leaders.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. What do you think a sustainable corporation is?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

ARGUMENTS FOR CUP AND BOTTLE DEPOSITS

This article looks into cup and bottle deposits from the point of view of sustainability. How do these schemes work and do they help increase recycling?

How do these schemes work?

Let’s take one example, from the Reading music festival; the text below is copied from their website.

Every bar cup and all plastic bottles that you purchase at Reading will have a returnable deposit of 10p.  Minimum of 10 items for £1, a full recycling bag of bottles is worth £5.  There is a dedicated return point in the arena (marked on the site map) where you can redeem your deposit.

The goal here is to encourage high rates of recycling. The consumer has the opportunity to receive their refund by returning their bottle or cup, or legally or illegally disposing of their goods.

In the case of non-returned bottles or cups, the merchant will realise a small profit on each occasion that this happens. Over the course of a large festival, this could amount to a significant quantity of money.

In the Unites States, recycling rates in states with bottle deposit schemes are roughly double those of states without deposit schemes.

Another nudge scheme, the plastic bag tax has had an astonishing effect, in cutting plastic bag usage by 85%.

Plastic bag use plummets in England since 5p charge

These small incentives can have a big impact. Litter is becoming a serious environmental problem and solutions like these are necessary to tackle this head on.

The economic incentive is working.

What are the benefits to sustainability?

  • Recycling rather than landfilling or incinerating important materials
  • Visual benefits of litter reduction
  • Customer engagement in the recycling process

There are no real costs; any argument that it unfairly punishes low income consumers doesn’t hold water. The deposit is small and only those who fail to return their containers loose out. The collection and recovery of the containers also forms part of a daily routine for those who are homeless and least fortunate so that they can access vital funds. There is no rational argument against such a scheme.

Watch the video below, to see how in Japan, bottle collection plays an important role in the lives of homeless people in that country.

Homeless in Japan

What to do with the money of non-returned items is a hot button issue. There are those who argue that the integrity of such a scheme rests on the merchant not benefiting when customers do not return their containers. I would have to support that statement.

Bins at reading

My experience at the Reading music festival was that firstly I did not consider their recycling facilities to be of a sufficient standard and secondly that it was not particularly easy to claim refunds. There had to be 10 cups to get a refund and the locations were few and closed early.

cup and bottle return point

When this happens, it reflects badly on the recycling process and sustainability more broadly.  People who are unaccustomed to just how important and necessary such practices are leave feeling scammed. If you are going to do a scheme like this, you have to execute it properly, anything less is a dereliction of your corporate social responsibility.

The key is you need to make returning the containers and receiving your refund as easy as possible. This cannot be emphasised strongly enough.

You have to be able to claim 1 refund back if you want to and there has to be a lot of options. Having it done by machine means that it can be available 24/7.

Netherlands Bottle return

The reverse vending machines located in almost all supermarkets in the Netherlands are a great idea to engage citizens in the recycling process. You can make taking your plastic bottles to such machines part of a routine when you go to the supermarket. Their ubiquitous nature means that you are never far away from claiming a refund.

What you need to know

This article looked into cup and bottle deposits from the point of view of sustainability.

We analysed how these schemes work. They work by levying a small charge on the purchase of each disposable cup or bottle. This deposit is then refundable when the customer returns the container via the proper channel.

We looked into how these schemes correlate with increasing recycling and sustainability. In theory, these schemes should work. Similar micro charges have resulted in exponential outcomes.

But the success of the scheme depends on how well it is executed. If there is not a lot of ways to claim the refund, they will be left on the floor or in the recycling and general waste bins, violating the purpose of the scheme.

This can be improved by an escrow system whereby money on non-refunded cups is donated to a worthy cause.

Overall, the key is to make returning the containers and receiving the refund as easy as possible.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. It’s great to hear about other people’s experiences in taking sustainability forward.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

P.S.

I also encountered another well-meaning but poorly executed cup deposit scheme this weekend at the Twickenham stadium.

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As you can see from the pictures, this scheme involves a £1 deposit on each cup, which is a sturdier, re-usable Perspex variety. You were unable to receive refunds at the bars, only from the specific refund kiosks. As is evident in the second photo, the queue for refunds at the end was nothing short of legendary. Activities like this reflect poorly on recycling and sustainability. If you are going to initiate a cup deposit scheme you have to make it as easy as possible for people to redeem their refund.

HUMAN ACTION & BIODIVERSITY

This article analyses human action and biodiversity. Biodiversity is a strange phenomena. It is the variety and variability of life on Earth.

frog

It is is the variety of life. It is everything, it is all around us and we humans contribute as well as detract from biodiversity.  It is difficult to measure. In fact, only a small proportion of the earth’s species have been identified and catalogued to date. As we will see later, this has important ramifications for biodiversity conservation efforts.

In this article, we will look into the causes of biodiversity loss, why biodiversity matters and why biodiversity loss continues.

Causes of biodiversity loss

The natural system is being disturbed by human hands. Whether it is through poverty and desperation in developing countries or through wealth and avarice in developed countries; we are all responsible for biodiversity losses.

Before we jump into the primary drivers I think it is important to touch on the scale of human action on biodiversity losses.

As the charts below show, not only are the biodiversity losses substantial, but they are happening is step with the arrival of humans in ever increasing numbers. The charts were drawn from a paper called Biodiversity losses and conservation responses in the Anthropocene by Johnson, et al. It is a great paper and I recommend that you find and read the original text.

species loss 1

Species loss 2

Now we have established the scale of the problem. We can examine the direct causes. These are:

  • Pollution
  • Overexploitation of resources
  • Habitat loss
  • Invasive species
  • Climate change

Different areas will be affected differently, but these are the primary drivers of biodiversity losses.

To take but one example, habitat loss, a primary driver in this sphere is deforestation and its links to agriculture. Let’s say you have a forest, this is a complex ecosystem, which in the tropics could support thousands of species. If you cut that ecosystem down and replace it with a far more simple arable or pastoral agriculture system, you have increased the carrying capacity to support human needs, but you have dramatically reduced the ability to support biodiversity. What is unescapable is the impact that agriculture has had and is having in accelerating biodiversity losses.

Another aspect that is often overlooked when addressing habitat loss is the impact of degraded ecosystems on biodiversity. Direct habitat loss is a tragedy and we should look to reduce this wherever possible. But what is often the case, is that whilst habitats are lost, what remains is broken up, heavily fragmented and unable to support the same level of biodiversity. This impact of the degraded quality of what remains of our ecosystems is a key issue to address.

Action is needed to address all of the 5 drivers of biodiversity loss. These are ecological problems that are heavily intertwined with economic problems. We need systems thinking so that by solving one problem, issues in other areas are not exacerbated.

Why biodiversity matters

Biodiversity loss matters. The loss of biodiversity presents both economic and moral questions.

Economics

Economically, the value of biodiversity is immense. The following industries and sectors are utterly dependent on biodiversity for their present and future success. They are:

  • Pharmaceuticals
  • Food crops
  • Industrial products

The unexploited wealth that lies within the Earth’s forests and oceans contain vital ingredients. As mentioned before, we have barely scratched the surface when it comes to cataloguing all the species on Earth.

It is possible that with the biodiversity loss already sustained, that vital inputs into pharmaceutical discoveries have been lost, before we ever knew they existed. But instead of focussing on what has been lost, we should see this as an opportunity, to conserve what remains of the productive aquatic and terrestrial ecosystems. These will no doubt contain unexplored genetic material that could be used to create new breakthrough pharmaceutical drugs or miracle crops. There is a robust business case for biodiversity conservation.

What is clear is that significant disruption to biodiversity and ecosystem services will have consequences for human welfare over time. But it doesn’t have to be this way. If you look at the values in the table below, drawn from Keeping the Amazon forests standing: a matter of values by Verweij, et al. The destruction of forest ecosystems has a cost.

Amazon Ecosystem Services Values

We are part of an interconnected system.  More awareness needs to be raised regarding the fact that many ecosystems are worth more intact than they are destroyed. These ecosystems are home to most of the world’s biodiversity. Their services as well as their biodiversity must be properly valued.

Morals

The loss of biodiversity throws up great moral questions for humanity. As we have seen, it poses great economic challenges for human welfare, but a lot can get lost when translating non-monetary values into the economic arena.

How many species critical or non-critical must be lost before this is seen as a crisis? Are we only to seek to retain species which are of benefit to humans? What is to be done with our current focus on charismatic species and endangered species, when it is known that a focus on ecosystem and habitat conservation is preferable for biodiversity conservation? These are all important questions which need to be answered.

At bottom, stopping and reversing biodiversity loss is as much about what direction our moral compass is pointing in, as it is about economics. This interjection of morality and values can bring an extra dimension to environmental management.

Why biodiversity loss continues

Biodiversity loss continues, because it is a complex problem to manage. It involves a staggeringly high number of stakeholders and those stakeholders would have to forego present economic benefits for what would seem to them to be uncertain future benefits. It is also a difficult problem to communicate.

Maybe you know, but maybe you are unaware, but 2011-2020 was designated as the United Nations Decade on Biodiversity.

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We are already well into 2017 and despite the bold aims and the dedication of an entire decade to this cause, progress has been limited. The UN initiative has passed like a ship in the night. For more information on this UN project, please visit the video via the link below.

United Nations Decade on Biodiversity

What is clear is that biodiversity is not being correctly valued on world markets. It is treated as an unlimited and dispensable commodity, when it is limited and precious. We must summon the courage needed to address this challenge.

 

What you need to know

This article looked into human action and biodiversity. We explained what biodiversity is, it is the variety and variability of life on Earth.

We looked into the causes of biodiversity loss, where pollution, overexploitation of resources, habitat loss, invasive species and climate change are the dominant drivers.

We also looked into why biodiversity matters, with its economic links to the pharmaceutical, food and industrial products sectors being particularly strong.

Morally, biodiversity loss also matters and these moral values and questions could be key to reframing and reigniting efforts to reduce and restore biodiversity losses.

We looked into why biodiversity loss continues. It is a wicked problem that is difficult to solve. But we must solve it. Our place in history depends on it.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. It’s great to hear about other people’s experiences in taking sustainability forward.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

TO BURN, OR NOT TO BURN: THAT IS THE QUESTION

This article looks into waste incineration from the point of view of sustainability. How sustainable is this process and what does the future hold?

Recycling plant

Waste incineration is a process that is also sometimes called energy recovery, energy from waste or waste to energy. The choice of language very much depends on which side of the debate you are on. For the purpose of this short article, these will all be grouped under the banner energy from waste (EfW).

This article was inspired by the recent and very interesting Eunomia Residual Waste Infrastructure  Review. I would definitely recommend reading the BBC article linked below as well as tracking down the original paper. The impact of EfW on recycling is an important consideration and we will dig into this shortly.

Burning policy puts pressure on recycling targets

How sustainable is EfW?

Like anything, when concluding how sustainable a process is, the question to ask is, “compared to what?” The other main options can all be found in the waste hierarchy.

waste_hierarchy-300x211

Prevention

Prevention is the most preferred option. Waste that doesn’t get produced doesn’t have to be contained, transported and dealt with by any means. This is the most sustainable option and more focus needs to be placed on this by businesses, governments and citizens.

Re-use

Re-use is the next most preferable option. Re-using the same item multiple times for the same purpose or again for a different purpose is a great way to use resources sustainably.

Recycling

Recycling is the sustainable process that people are probably most acquainted with. For those not entirely familiar with the totality of the sustainability agenda, it can sometimes be confused with the entirety of the sustainability equation. Recycling is very important, it reduces the demand for new oil to be drilled, new forests to be cleared and new glass to be melted. It is a very important process. Without recycling on a large scale, the sustainability of developed economies doesn’t look so great.

Recovery

Most EfW sites sort the waste they receive. This allows for the removal of large appliances and items that have made their way into this waste stream such as refrigerators and car tyres. Small items such as aerosol cans and any other metals can be removed with a magnet.

The next step in the recovery process is the burning of the residual waste to recover energy from these items. Many of these energy recovery plants, particularly the newer ones are state of the art facilities utilising the best available technology to incinerate and recover energy from the waste.

Some of the benefits of EfW include a significant reduction in the size of the material sent for final landfilling. We will see more on this shortly. This would be an important consideration in land constrained countries.

Another benefit of EfW is that it allows for energy to be recovered as heat, electricity or combined heat and power. This is a significant benefit and is why EfW is preferred to landfilling. However, previously a significant advantage of EfW was that it displaced fossil fuels, principally coal from the energy generation process and so displaced large amounts of CO2.

But as the link below shows, as energy grids are rapidly decarbonised, it is only fair that this benefit is called into question.

Work ahead for businesses as the 2017 UK conversion factors are released

In the UK for instance, the carbon intensity of electricity has fallen 23% since 2015. It remains to be seen whether this trend will continue into the future, but even at present rates, the CO2 benefits of EfW look to be increasingly questionable.

EfW is not without its disadvantages. It must be said that much of the value of recyclable materials, which have not been removed before burning is lost in this process. This is wasteful and leads to the squandering of resources at a time when we should be conserving resources.

EfW can also be criticised on the grounds that the pollution from the chimneys can be quite nasty, especially if items such as batteries have not been removed before incineration. Furthermore, the EfW plants also leave behind ash, which contains toxic components and is a hazardous material. After testing by the US EPA, the ash was found to contain high levels of cadmium, lead, furans and dioxins.

Overall, as we can see, there are strong arguments for and against EfW as a waste management process. But the sustainability of EfW must be viewed against other options.

Disposal

Disposal is the final stage in the waste hierarchy.

Even EfW plants, which allow their clients to proclaim to be zero to landfill, still have to dispose of the ash from the furnaces. When all is complete on the energy recovery side, residual ash and un-burnable residues representing 10-20% of the original volume are left to be disposed of at a landfill. The claim that EfW plants are zero to landfill is therefore false. It is interesting that such an inaccurate claim could have persisted for so long.

Landfilling can also be used directly with no sorting or energy recovery. This leaves the potential for hazardous materials as well as recoverable materials to be lost in a sea of rubbish.

Landfills also consume land that could be used for other purposes, produce methane, only a small percentage of which can be collected and in old style pits leads to the contamination of groundwater. Overall, landfilling is a nasty process, which if the waste hierarchy was properly implemented would be significantly reduced.

What the future holds

The future for sustainability looks bright, however, the future of EfW does not look so bright.

Since 2009 the UK’s incineration capacity has more than doubled from 6.3 million tonnes to 13.5 million tonnes. However, the quantity of residual waste suitable for treatment has fallen from 29.9 million tpa to 26 million tpa. If more capacity was to come on line, and this is expected to be the case and the amount of waste available falls further, gate fees for this process would come under significant pressure.

The impact of incineration capacity on recycling is also an interesting phenomenon. To a very great extent the growth in incineration capacity and recycling rates are linked. As the Eunomia paper shows, each new facility constrains the maximum level of recycling that can be achieved. EfW plants feed heavily on the high energy value of plastics and papers, which with the right collection, should have been recycled.

As already mentioned, as energy grids become cleaner incineration begins to look like an increasingly dirty option. This will no doubt see it come under some pressure. That being said, in a future electricity grid dominated by renewables and energy storage, the ability of EfW plants to provide a support function at peak demand would be welcomed.

What does the future hold for EfW? As we looked into at the beginning, determining the sustainability of EfW very much depends on how it compares to other methods. It is more preferable to landfilling and the process will no doubt continue, but will come under some price pressure as capacity expands and available material contracts.

We can only hope that more focus is placed on prevention, re-use and recycling so that EfW when needed is only needed sparingly.

What you need to know

This article looked into waste incineration from the point of view of sustainability. We assessed how sustainable this process is and what the future holds for EfW.

What then is the answer to the question, to burn or not to burn? The answer has to be no, not if it can be avoided as it can be avoided. The primary goal must be prevention, then re-use, then recycling. The waste hierarchy should be applied flexibly between these three options depending on local conditions. But EfW is most certainly a quantum leap from these three options.

What the future holds for EfW is hard to calculate as it depends on a number of factors. It will no doubt continue, but the trend towards increasing capacity and decreasing supply will put pressure on prices.

Responsibility for waste needs to shift up the lifecycle of products, but this does not occur in a vacuum.

Ultimately people, who are both voters in elections and purchasers of products, need to start demanding smarter regulations from their politicians and investing in companies who are committed to implementing the waste hierarchy.

The fall back option is more landfills and more EfW plants. A better world is possible, but it requires active and engaged citizens. It requires people to reduce the production of waste wherever they can, to re-use what they can and recycle everything they can.

Businesses and politicians react to the demands that they see within a population. Don’t sit on the sidelines, play a role in creating a more sustainable future.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. It’s great to hear about other people’s experiences in taking sustainability forward.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

ENVIRONMENTAL ECONOMICS Vs ECOLOGICAL ECONOMICS

This article investigates environmental economics and ecological economics.  Debates between these two branches of economics lay at the heart of the sustainability equation.

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This article will investigate what their commonalities are, what their differences are and what the future holds. But first, a quick explanation of each of these economic niches is in order.

Environmental economics

Environmental economics is a subset of economics that is based on a modified neoclassical economic model. This is a model where the environment is integrated into the economic system, as the image below shows.

environmental

It borrows a worldview and terminology from existing theories of economic growth and development. It fully integrates concepts such as welfare and capital from existing theories but applies them to environmental ends.

Environmental economics evaluates development as an accumulation of social capital and economic capital minus the reduction in environmental capital. With this understanding, development can be deemed to be sustainable where total capital stocks do not decline. This assumes a high level of substitutability and complementarity between these different forms of capital. In certain situations, when placed under the microscope, these assumptions can be called into question.

However, environmental economics has done much to raise the profile of the environment. It includes within it, workable out of the box solutions such as market based mechanisms to solve environmental problems.

Ecological economics

Ecological economics is a subset of economics that is based on seeing the human economy as a subsystem of the global ecological system.  As the image below shows, the economy and society are seen to be within the environmental sphere.

ecological

It boldly aims to insert the environment into economics and prioritise its management, in an area where it has been traditionally neglected.

One of the strengths of ecological economics is that it doesn’t try and integrate society and the environment into an economic framework where these aspects can be uncomfortable. Instead, ecological economics views material and income flows within an economy as part of the larger transfer of materials and energy within the biosphere.

This can be seen as ecological economics’ greatest strength but is also the source of its greatest vulnerabilities. By choosing to deviate so far from the norm and not make use of the current economic lexicon, ecological economics makes itself prone to isolation from influential decision makers.

Ecological economics evaluates sustainable development as being a condition where the scale of the economy doesn’t exceed the ultimate carrying capacity of the planet. As the recent news broke of Earth Overshoot Day 2017 falling earlier than it ever has, we are clearly a long way from this goal. For more information on Earth Overshoot Day, please visit the link below.

Earth Overshoot Day: Nature’s Budget For The Year Already Used, Study Says

This strong sustainability condition within ecological economics requires that there is no decline in natural capital. Societies can make use of non-renewable resources for economic purposes, provided that other renewable resource stocks rise to compensate for this loss. This is a simple story to convey.

Ecological economics does not regard economic, social and environmental capital as substitutable. Therefore a fall in environmental capital cannot be offset by rises in capital in other areas.

As we can see, ecological economics offers a bold and rigorous vision for what sustainability is and how it can be achieved.

What their commonalities are

Environmental economics and ecological economics try to show where economics and the environment can complement one another. This is evident in areas such as the the use of market based mechanisms and in the management of natural resources.

They can also be used to look for ways in which economic activity conflicts with the environment such as pollution for which the polluter pays no cost.

Environmental economics and ecological economics both provide a framework for identifying pathways that lead to environmental and social problems. They both also provide ways of looking for solutions to these problems.

Both environmental economics and ecological economics make clear the importance of incentives when designing solutions to environmental problems.

What their differences are

Taking a critical approach, it can be argued that ecological economics is more pluralist whereas environmental economics is based predominately on the thinking of neoclassical economics.

There are significant differences between the values that underpin these two schools of thought.

Ecological economics makes the environmental side of the equation more of a priority. It states that if the economy is to be integrated into the natural economy, it must obey the natural laws that govern the biosphere.

Environmental economics has a tendency to prioritise economic health in decision making. It assumes that if the economy is to be integrated into the natural economy, that the natural economy must be governed by the laws of the market system.

Both have their virtues and they make excellent critiques of one another.

What the future holds

Future societies will be faced with many problems. They will be confronted with high and possibly rising levels of pollutants. They will be confronted by resource scarcity as renewable and non-renewable resources are depleted and the world’s population expands. In light of this, environmental and ecological economics are set to grow in importance, possibly even becoming mainstream.

Economic analysis provides a valuable way of understanding human behaviour in the face of scarcity. The future of both of these branches of economics is bright, as societies look towards market based mechanisms to modify economic activity.

By harnessing the power of market forces and looking for the ways in which business interests and environmental interests align, business can play a leading role in the sustainability transition.

What you need to know

This article investigated environmental economics and ecological economics.  The debates between these two branches of economics can be seen as a fault line within sustainability.

Environmental economics and ecological economics both try to illuminate where economics and the environment can work together to solve common problems. They both share similar goals, but are based upon different methodologies and frameworks.

These economic niches differ in the value judgements that they make when integrating the environment into economic decision making.

Both of these ideologies can look forward to a bright future and both have played intrinsic roles in shaping the sustainability debate.

The advantage that environmental economics has is that it is able to convey meaning in monetary terms. Money talks, it is the language of influential decision makers. This is a very considerable advantage.

However, one weakness that environmental economics has is that it is based on the neoclassical framework. It could be argued that it is this framework that is the source of many social, economic and environmental problems.  Is this type of neoclassical thinking likely to be the fountain of solutions? This is an important critique.

The advantage of ecological economics is that it contains within it a simple and easy to understand story. That is, that a society can deplete non-renewable resources, provided they compensate for this loss with rises in other renewable resource stocks.

One weakness of ecological economics is its difficulty in passing on information using usual economic parlance. The language of ecological economics is markedly different from conventional economics.

Overall, deciding which framework is best comes down to personal preferences. Both make valuable contributions to building a better world, both offer better hope for the future than doing nothing or business as usual and both frameworks offer valuable critiques of one another.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. It’s great to hear about other people’s experiences in taking sustainability forward.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

 

 

SUSTAINABILITY & THE MODERN BUSINESS PART 2

This article explores sustainability within the context of the modern business enterprise. It looks at 3 further reasons why sustainability should be a core competency of any business in 2017.

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For more information on Part 1, please visit the link below.

SUSTAINABILITY & THE MODERN BUSINESS

4. Create an identity

Sustainability is a great way to create an identity for your company or brand.

All companies have identities. If you think your business doesn’t have an identity, then it is probably just bland, which is still an identity, just not a particularly good one.

Sustainability offers the possibility for creating a remarkable identity. An identity, such that when people think of your products, they don’t think of the products themselves, but of the environmental performance and corporate responsibility that stand behind those products.

An example of a business that has done this would be Interface. Interface make carpets. But they don’t just make regular carpets; they make carpets using materials and processes that take less from the environment.

For more information on Interface, please watch the late Ray Anderson’s Ted Talk by clicking the link below.

The business logic of sustainability

Interface has shown an unwavering commitment to sustainability and corporate social responsibility. Their sustainability policy and strategy is unmatched. Because of this, there are a number of tangible business benefits of reduced costs, increased profits and increased attractiveness to top talent that they have benefited from.

But what about the intangible benefits?  They have undoubtedly benefited from the creation of an identity. That identity is one of a sustainability leader, not just within their industry, but as a global leader in environmental excellence.

The key takeaway is that sustainability is a great way to create an identity for your company or brand. The example of Interface showed, that even in industries that wouldn’t normally be considered exciting, the application of sustainability can make them extraordinary.

5. Opportunities to connect

Sustainability is about doing things differently. It offers opportunities to connect and collaborate in new ways.

Sustainability allows you to go beyond the normal formalities of business which discuss price and delivery, to talk about the environment and society. On the face of it, this might not sound like much, but in reality it represents a radical step change in thinking.

This level of connectivity can take a number of formats.

In a business to consumer scenario, it could take the form of H&M who ask their customers to return used clothes so that they can be recycled or re-manufactured into new products.

H&M

In a working group situation it could take the form of Unilever, who founded the Marine Stewardship Council (MSC) with WWF. The MSC label enables consumers to choose seafood products from well managed fisheries. It provides independent certification that the fish come from sustainable fisheries.

MSC

This connection between a large multinational corporation and a large multinational non-governmental organisation is the exact sort of collaboration needed to achieve sustainability.

Yes, Unilever reformed their own operations. But responsible businesses also seek to reach out and reform their industries or sectors.

If you are already acting responsibly and on a journey towards sustainability, you have no fear of higher standards or regulations. I fact, you welcome them.

In a business to business situation it could be the example of Walmart who work diligently with suppliers to ensure the highest levels of social and environmental performance. Critics would argue that this is born out of a desire to improve their tarnished reputation. But an organisation the size of Walmart has phenomenal leverage. Action taken by a company of this scale to encourage sustainability throughout their supply chain is exactly the kind of transformation that is required to achieve sustainability.

The key takeaway is that sustainability offers businesses opportunities to connect with their stakeholders in new ways. These are interesting avenues, which many businesses are already pursuing. These opportunities to connect see environmental and business interests come together. Sustainability is a complex challenge. Organisations are looking to collaborate in this way as any one of them acting alone can only achieve so much. By working together, they connect and create value together.

6. Lead conversations

Sustainability offers businesses the opportunity to lead conversations in a way that few avenues can.

Take the Canary Wharf Estate. Not an organisation that one would normally associate with leadership in sustainability, but they have been grabbing headlines regardless.

With the implementation of their estate wide Clean Coffee Zone, they have demonstrated astute sustainability management. The coffee industry has been in the spotlight recently with the realisation that 5,000 disposable cups are discarded each minute, with less than 1% of these being recycled.

These paper/plastic hybrid cups are recyclable, if the correct segregation is put in place. By all accounts, the Clean Coffee Zone that has been implemented across the Canary Wharf Estate has been a great success. In only 4 months the scheme has collected 3 tonnes of coffee cups and 17 tonnes of coffee grounds. The Canary Wharf Group has been generating a great deal of publicity from their initiative

The key takeaway is that sustainability is a great way to generate interesting stories that people want to hear about and hopefully share. By demonstrating leadership in sustainability and combining this with astute communications, you can lead conversations.

What you need to know

This two part series looked at sustainability within the context of the modern business enterprise.

Over the two parts we looked at 6 reasons why sustainability should be a core competency of any business in 2017. They are:

1. Innovation

2. Build a better business

3. Stakeholder expectations

4. Create an identity

5. Opportunities to connect

6. Lead conversations

The key takeaways from this part are that sustainability is a fantastic way to create an identity for your company or brand. That sustainability offers businesses opportunities to connect with their stakeholders in new ways and that through sustainability businesses can lead conversations.

The overall essence between the two parts is that sustainability can give businesses an edge. This applies to businesses of all shapes and sizes. Why pass up such a golden opportunity.

The evidence is clear; sustainability should be a core competency of any business in 2017.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. It’s great to hear about other people’s experiences in taking sustainability forward.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

 

 

SUSTAINABILITY & THE MODERN BUSINESS

This article looks at sustainability within the context of the modern business enterprise. It explores 3 reasons why sustainability should be a core competency of any business in 2017.

BAMBOO image

1.     Innovation

Sustainability and innovation go together. Innovation is about new ideas, new devices and new methodologies. Sustainability is about reforming organisations and making them viable for the long-run. In many ways they are two sides of the same coin.

All businesses want to innovate more. All businesses want to be the recognised leader for innovation in their field. Innovation is by no means easy. But it is easier to lead than it is to follow, if your competitor has a first mover advantage.

Sustainability can be integrated into any business or industry. Some examples include:

  • Products
  • Services
  • Technologies

These are all areas where an organisational focus on sustainability can deliver enormous business benefits.

The demand is out there and the green consumer is extremely active in business to business and business to consumer markets.

All organisations have their own sustainability challenges; many will even have tough sustainability targets to hit. If you can create an offering that makes sustainability simple and easy for people, business and environmental interests can coalesce.

The key takeaway is that businesses whether they innovate a lot or a looking to innovate more should look to sustainability to develop new solutions.

2.   Build a better business

A great way to build a better business is through sustainability.

A common misconception is that sustainability will make a business’s operations more complex. When in fact, the truth is that sustainability is more likely to make a business’s operations leaner and more strategic. Some myths, however inaccurate prove challenging to debunk.

Sustainability can help businesses to cut costs, to generate new revenue streams, to motivate and engage employees and manage risks. A fuller description of some of the many opportunities that sustainability can deliver is available via the link below.

10 Opportunities That Sustainability Can Deliver

The great thing about sustainability is that providing your solutions are cost effective, they should have a mass market appeal.

People with a keen interest in social and environmental problems will buy them because they want to do the right thing. But providing you can save your customer’s money, people who are less interested in these issues will buy them anyway if they like to save money. This is a key distinction between sustainability and less business friendly forms of environmentalism.

The key takeaway is that sustainability is about building a better world. There is a robust business case for sustainability. In many ways sustainability has become a proxy for good management. If you want to build a better business, then making sustainability an organisational priority is a good place to start.

3.   Stakeholder expectations

Robust action on sustainability is increasingly expected by your stakeholders.

You can argue about whether sustainability is or is not mainstream. If you don’t believe it to be yet, all I can suggest is that you look what’s happening and look at the direction of travel. The direction of travel is towards a new normal, where sustainability becomes the norm.

That’s not to say that everything is okay and there is nothing to worry about, just that at least now people are aware that there is a sustainability equation waiting to be solved.

Failing to take sustainability seriously can mean that people will shop with competitors who do have sustainability credentials. Worse still is the reputational harm that can be done to a company’s brand value as a result of not taking sustainability or corporate social responsibility seriously. This can haunt a company for years, even decades after they have switched to behaving responsibly.

The key takeaway is that sustainability is leading to a new normal, where businesses are expected to play a role in solving social and environmental problems. This is an exciting time and your business should be at the forefront of making change happen.

What you need to know

This article took a whistle-stop tour of the role that sustainability play’s within the context of the modern business enterprise.

It explored 3 reasons why sustainability should be a core competency of any business in 2017. The list is by no means exhaustive and there may well be a part 2. Please comment below if you would like to see this.

The following 3 reasons were looked at in detail:

1.     Innovation

2.    Build a better business

3.    Stakeholder expectations

In closing, the overall takeaway is that for businesses looking for something to ignite innovation, they should choose sustainability.

For businesses that are looking for quick wins and ways of improving, the business case for sustainability is robust and and continues to strengthen.

Stakeholder expectations for sustainability have never been higher.

You should choose sustainability; you have everything to gain and nothing to lose.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. It’s great to hear about other people’s experiences in taking sustainability forward.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby