The ebb and flow of corporate eco-consciousness
We remember a certain look businesspeople used to struggle to hide when confronted with their first real-life environmentalist. It was as if they had been presented with an alien life-form — a creature from some green lagoon. Some felt threatened, no doubt, but others were genuinely perplexed, curious, sympathetic even: “What made you one of those?” they would probe. In reply, they might hear about an experience or revelatory moment that suddenly made the world look very different, spurring action.
Decades later, we are seeing accounts of similar experiences from the business side — even from the likes of Wal-Mart CEO Lee Scott, who was described in reports of his company’s recent eco-announcement as having undergone “something of a conversion.”
Not surprisingly, the flood tide of “we’re turning green” statements from a variety of CEOs has raised eyebrows in the world of activism. But it should also raise deep questions about what exactly we are trying to do here, and what it will take to get it done. Increasingly, environmental and social issues present real business risks and opportunities. The real test is whether these business leaders move beyond the blasted-off-my-donkey-by-a-beam-of-green-light phase to work for, lobby for, and invest in genuinely sustainable forms of development. And the test for those of us goading and supporting them is whether our engagement is making a difference.
If you’re an environmental activist of any kind, part of the answer to where your environmentalism came from is the late Rosa Parks. The link in our minds? Well, Parks taught generations of activists the power of a single person. As a direct result of her initial action and subsequent persistence, Congress passed the Civil Rights Act of 1964 and Voting Rights Act of 1965, marking the beginning of the end for legal racial segregation and disenfranchisement. She eventually received the Congressional Gold Medal of Honor — not just because she stood her ground on a bus in Montgomery, Ala., but because she was a key catalyst for a movement that changed the system. Many of today’s most effective environmental activists have the same goal — even if they’re a long way from achieving it — and the corporate world seems a newly accessible place to make progress. But what can be done to drive and embed the necessary systemic changes, so the lessons learned are not promptly forgotten?
The answers, of course, have to reflect where we’ve come from, and where we’re going. SustainAbility has mapped three great waves of societal pressure impacting government and business since 1960, predominantly in the developed world. With three big waves to date, the real embedding of changes seems to come about after the social movements themselves peak — in other words, in the downwave periods.
How do the upwaves and downwaves work? Here’s our take. The first environmental wave, peaking between 1969 and 1973, drove political and regulatory changes like the formation of the Environmental Protection Agency and U.N. Environment Program. Throughout the first downwave, which ran from 1974 through 1987, business was largely on the defensive, forced to comply with a growing range of rules and regulations.
Wave two, peaking between 1988 and 1991, was spurred by issues like the ozone hole and triggered a very different approach. As environmental performance increasingly became a market issue, companies began to compete. One inevitable result was that many competing approaches and standards surfaced. The ensuing downwave saw a round of convergence and consolidation around such standards as the Global Reporting Initiative, ISO14001, and SA8000.
Then the peak period of wave three kicked off in the streets of Seattle in 1999, with a focus on globalization and corporate and global governance. With this third wave, the sustainability agenda has increasingly become one of systemic change. By our analysis, the third downwave began late in 2002, following the intense drag effects of 9/11 and breakdowns in corporate governance and ethics like those seen at Enron and WorldCom. One symptom of the bedding-in phase this time around has been the way these issues have increasingly become central to the agendas of organizations like the World Economic Forum and the Clinton Global Initiative.
If instinct is anything to go by — and all projections should come with a warning that the one thing you can be sure of is that the future is full of surprises — the next upwave will be easily detectable by around 2010. We expect that it will focus on unlocking innovation and creativity, on evolving entrepreneurial solutions to the world’s great challenges, and on bringing such solutions to scale, often through the use of new market mechanisms and economic instruments. Perhaps these are key reasons why GE CEO Jeffrey Immelt’s Ecomagination announcements have resonated so powerfully — at least as presented, they fit strongly with these three emerging characteristics of the next wave.
Ultimately, as the green closet begins to shake seismically with the number of CEOs wanting to step out, the real question isn’t whether business leaders are waking up to the sustainability challenges the new century will bring. If they aren’t, they will lose their jobs. The question is how to react to them when they do wake up to these challenges — how to react to the Immelts and Scotts of this world.
If they are serious, they too can help change the rules. But it will not be an immediate process. While we suggest you don’t take their pronouncements at face value, we also suggest that you give them some wiggle room to steer their complex organizations through the early stages of the transition. While they do that, we should be willing to trust — but also make sure we verify the rate and direction of change. How are CEO-level promises translating into effective everyday action? How are company-level commitments cascading into meaningful targets and incentives? To what extent is the company lobbying for the sort of market-wide incentives needed to accelerate change? In addition to these questions, anyone helping businesses change, at whatever level, should continuously ask themselves whether what they are doing is worthy of previous generations of activists — not least the late, great Rosa Parks.