By Jack Santa Barbara*
Discussions of sustainable business offer many useful ideas about how businesses can reduce energy and material resources, and generally have a minimal environmental impact in the production of whatever goods or services they provide.
But there are arguably some major blind spots in such discussions. For example, because the major focus is on how things are produced there is little consideration of what is produced. An even larger blind spot is any consideration of the magnitude of environmental harm that our aggregated economic activities are already having on the planet. An underlying assumption of sustainable business strategies is that we can avoid environmental disaster by adjusting how we provide goods and services.
This basic assumption of most sustainable business discussions is clearly false. Humanity is already in advanced ecological overshoot. We are already destroying the ecosphere’s capacity to reproduce itself and assimilate waste. We have already initiated global level changes in ecosystems that put us on a path to ecological collapse. Because these ecosystems are so large and slow changing, we fail to appreciate the trajectory we are on.
Climate disasters here and abroad are giving us a glimpse of what that future holds. Many climate impacts are already built-in and will occur no matter what measures we now take to mitigate them. Dealing with these emerging climate disasters is already challenging governments’ capacities to cope. But we continue to ignore the trajectory we are on, assuming that we have not yet passed critical tipping points. We assume our ingenuity and technology will come to the rescue and avoid disaster.
Our challenge is not just to avoid disastrous environmental harm going forward; we have already done so much ecosystem damage, that our priority tasks must be to dramatically reduce the harm we have already done. We have a planetary crisis that is not being addressed. We are rapidly approaching irreversible tipping points that once crossed, no amount of ingenuity or technology will fix.
Failure to understand this basic ecological fact obscures the magnitude of change required to actually allow for economic activities to be ecologically sustainable. The considerable efforts directed toward sustainable business practices, and the many reports of “more sustainable” goods and services gives us a false sense of progress when the reality is that we are actually making things worse.
Understanding the requirements for ecological sustainability place a considerably greater challenge to our sustainable business efforts. Good business practices require clear goals. But clarity regarding genuinely sustainable business goals is sadly missing. Doing just a little bit better in terms of reducing material or energy requirements is not going to meet the challenge we now face.
So how do we clarify what goals are needed for truly sustainable businesses?
This is not an easy question to answer, at least partly because we are so used to the level of global trade that we now enjoy and that we take for granted will continue. Business alone will not be able to function sustainably while our economic system prioritizes profit, and consumers demand goods they actually don’t need.
The place to start is with an ecological perspective, as ecology is the science that comes closest to grasping the complex interdependencies of life supporting ecosystems from the local to global levels. We know from historical data that various civilizations have seriously damaged local and even distant areas as they expanded and colonized. We now know that at a global level humanity’s over consumption of natural resources and sinks is almost double what a sustainable level would allow. Many scientific studies now confirm that we have to reduce our demands on nature by at least half, and for some specific activities by even more. Even if we take this estimate of reducing our ecological footprint by half as a likely underestimate, we begin to get some sense of the magnitude of change required of our economic and business activities to be truly sustainable.
As we explore how we might achieve such a dramatic reduction in economic and business activity, keep in mind the urgency of reversing the current path we are on toward ecological and therefore social collapse. If we don’t find a way of meeting these ecological goals soon, nature will inevitably rebalance itself. The result will not be kind to us.
It is helpful to understand that the key driver of ecological disruption is the sheer volume of material resources we process through our economy and individual businesses. We extract too much material from nature, and return too much waste for natural systems to process sustainably. Reducing our use of material resources is therefore at the core of avoiding collapse.
We obviously need resources from nature to live, so we must continue using them to meet our needs. Part of our problem is that we have blurred what we actually need with what we wish for. A global annual trillion-dollar marketing and advertising budget has driven this obfuscation.
If we are going to use natural resources sustainably then it follows that we can only use an amount equivalent to what nature can reproduce in the same timeframe. Harvest too many fish and suddenly there are too few fish to fry. Our current approach is to fish in a new location and send the fish where they can be purchased. Fishing sustainably is one way of reducing the demands we place on natural systems. We actually know how to do that, but it conflicts with our business models.
If sustainability requires us to limit our use of natural resources, then an important question becomes how do we determine what these resources are used for? Meeting basic needs is a key feature of economic exchange. Focusing business activities that meet universal basic needs would be a big step toward sustainable business. Nutritious food, clean water, comfortable shelter, basic health care, education and social supports will always be needed, and done well, can be provided with minimal material requirements.
The challenge we now have is that we allow the market to determine what is produced with natural resources. Profit requirements means that products or services that provide the most profit are prioritized, rather than basic needs. Currently, we basically ration natural resources based on ability to pay, which means that basic needs are often neglected in the quest for greater profit. The result is unnecessary use of natural resources.
Government regulation of resource use would be required to prioritize use for meeting basic needs. Unfortunately, this requirement goes against a deeply ingrained notion that businesses should be able to determine what they use natural resources for to make a profit. Such government “interference” would be unacceptable by the business community, and perhaps the public as well. But given that we are in a planetary crisis more serious than a war, drastic actions are needed.
As unpopular as government regulation of resource use might be, the necessity to avoid ecological collapse looms large and must be faced head on. This dilemma speaks to the urgent need for a global conversation about priorities for humanity. Governments alone are poorly equipped to effectively confront such issues, and business self-interest is too narrowly focused to adequately address this requirement. New public institutions such as Citizens’ Assemblies might be one way of achieving consensus on the challenges that confront us.
The necessity to avoid ecological collapse also speaks to the issue of population size. The projected increase of almost 25% by 2050 would be an ecological disaster. To meet the needs and wishes of an additional two billion people would literally require the construction of a Paris size city every week from now until 2050. Assuming that the earth’s natural systems could endure this magnitude of expansion of the human footprint is a nonsense that speaks to the ignorance we have of our current state of advance ecological overshoot.
Business, along with just about every other human creation, needs a massive rethink to actually operate sustainably. Using natural resources and sinks sustainably to meet universal basic needs is an essential requirement to avoid collapse. This means a dramatic reduction in the current 100 billion tons of natural resources we currently consume globally, most of which are non-renewable.
The very notion of profit needs a rethink. Profit was needed to grow, but we have now grown beyond biophysical limits that are creating a backlash of epic proportions. We need to understand that almost all businesses operating today are externalizing costs to the environment, that if internalized, would force them to cease operating.
Rethinking economic growth is a major theme of the degrowth movement.
Rethinking business in terms of focusing on meeting basic needs, relying primarily on locally available resources at a rate which can be replenished, and eliminating profit from business models, are all essential features of a genuinely sustainable business paradigm. But such requirements are unlikely without broader social change. The business community prides itself on its ability to innovate and be creative. The stakes could not be higher for demonstrating those features now, along with widespread government and public involvement.
*Jack Santa Barbara, PhD, is a retired CEO, academic who lectured in sustainable business, and philanthropist, with a long standing interest in sustainability issues.