Transitioning an established business toward sustainability requires, first and foremost, a transformation in how the governance team thinks. They must oversee their own paradigmatic shift from a 20th century mindset of 'building wealth for today and tomorrow by consuming resources today' to a 21st century mindset of 'addressing needs today and regenerating resources in perpetuity'.
3 min read | Last updated 11 June 2021
Businesses that are transitioning into sustainability have come from an entirely different business tradition. The business sector was shaped through the 20th century around the concept of capital substitutability (so-called weak sustainability), the idea that wealth and wellbeing should be created for the present through technologies that convert environmental capital into economic capital, thereby setting up future generations to develop more technologies to overcome diminished stocks of raw materials and high levels of pollution (Hunt, 2013). We see this belief persisting among those who would prefer to emit carbon into the atmosphere to maintain a stable economy and expect that a carbon removal technology will arrive in the second half of the 21st century to mitigate those emissions.
This contrasts markedly with the concept of sustainable development, which is founded on the idea of intergenerational resource stewardship (so-called strong sustainability), so neatly described by the UN as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ (UNWCED, 1987 (pdf)). Capital substitutability and resource stewardship are diametrical ideas about how to use natural resources for human progress. Businesses transitioning to stronger sustainability have found that substitutability and stewardship are incompatible, requiring a paradigmatic shift in governance mindset and leading many to redesign their business model. We see this shift happening in businesses that are eschewing the linear take-make-waste model and adopting cradle-to-cradle and circular economy ideas.
Despite the potential upheaval, a huge number of businesses are moving to embrace stronger sustainability, some because they are choosing to adopt a social or environmental mission, others because the 20th century business-as-usual (BAU) trajectory represents a huge business risk. (Usually, change represents risk. In this instance, not changing represents the bigger risk.)
We’ve known the denouement of the BAU story for 50 years. In the early 1970s, MIT researchers developed World3, a dynamic systems model simulating Earth and human systems. Numerous scenarios were run through World3 and the results were published in Limits to Growth, a seminal book that warned of the impossibility of exponential economic growth on a planet with finite resources. World3 projections through the 21st century showed that BAU leads to resource scarcity and environmental degradation, including climate change, resulting in population decline and economic collapse by about 2050. An alternative World3 scenario, a ‘stabilised world‘, which involves a shift no later than 2020 from material consumption and industrial growth toward health, education, pollution abatement and resource efficiency, was shown to lead to a stable global population and a high level of human welfare throughout the 21st century.
Now that we have had 50 years of economic activity since the publication of Limits to Growth, several recent studies have compared empirical data to World3 scenarios and found that we have barely shifted off the 20th century BAU pathway (Turner, 2102 (pdf); Branderhorst, 2020). This is borne out in expert opinion. A survey of more than 800 sustainability leaders across government, civil society and business found that only 20% believe business has made excellent progress and at least 36% believe business has made poor progress on business sustainability since the 1992 Rio Earth Summit (GlobeScan / SustainAbility Leaders Survey, 2019).
We have a lot of work to do to move the whole world onto the ‘stabilised world’ pathway, but this is what the UN 2030 Agenda for Sustainable Development has set out to achieve. The problems we must overcome are reflected in 17 sustainable development goals (SDGs) – the video below is a quickfire reminder of them. All businesses are asked to contribute effectively toward achieving the SDGs by becoming more sustainable.