Why “sustainability” should be more than a meaningless buzzword

By Elizabeth Scharpf
October 7, 2013

The term “sustainability” crept into the business lexicon slowly, by way of the environmental movement. It no longer means covering operating costs with profits, the definition I learned at Harvard Business School six years ago. Instead, it’s morphed into a blurry term that fits into whatever suitcase you want it to — a catchall for everything “socially good,” whatever that means.

The term has been used by various groups — with various meanings — for three decades. The Sierra Club first introduced it in the 1970s, during the dawn of the environmental movement. At the time, activists were speaking out against mining, water pollution, and other environmental threats. They defined “sustainability” as an approach to preserving natural resources by creating national parks and enacting legislation that would penalize polluters. In the 1980s, companies like The Body Shop used sustainability to describe their commitment to environmental and human rights, and a corporate focus that expanded beyond profits. For the next 20 years, the term was used by a small group of companies, like Ben and Jerry’s and Eileen Fisher, whose founders tried to incorporate their social values into their business models.

Over the past five years, sustainability has become even more popular, as multinational corporations open new sustainability divisions and chief executive officers at the World Economic Forum wax poetic about its importance. The term has been co-opted, perhaps because Americans, especially Millennials, not only want to buy products that do the job, but also align with their values (like soap that can clean a car without harming the environment). Today 2,500 multinational corporations from 58 sectors participate in the Dow Jones Sustainability Index, which assesses each corporation’s sustainability using variables such as labor and environmental practices. This index is one of over 25 sustainability indices worldwide, each one with a unique set of criteria — measuring governments’, multilateral organizations’ and non-governmental organizations’ level of sustainability, or their so-called social good.

This phenomenon is bad for a number of reasons. First of all, it misdirects resources. According to a 2012 Bloomberg LP-sponsored study, institutional investors are now using “sustainable” investing strategies in more than $3.7 trillion of investments — a 22 percent increase in two years. In theory, this should be a good development. But if there is no consensus on what sustainability means, then how can the institutional investors and their clients — who are not necessarily operations experts — be sure that the funds are being directed to truly sustainable businesses? Investors are relying on vastly different definitions of “sustainable” — everything from a coal company whose drivers turn off their truck engines while refueling, to an urban quinoa farm depending on rain-collected water and composted fertilizer.

Secondly, “sustainability” applied blindly can dupe consumers. Consumers may have one perception of what sustainability means and therefore buy a product that has sustainable in their messaging. But when was the last time a Unilever marketing manager spent time on the Lipton tea farm to understand a farmer’s needs? How much does the farmer need to get paid in order to support her family? Does Lipton use pesticide that pollutes her community’s groundwater?

Lastly, multinational corporations miss the opportunity to scale truly sustainable practices. Companies in poor countries, which start off with sustainable business models, often look to multinationals as a blueprint for how to scale. When those multinationals aren’t sustainable, the companies in poor countries still follow their lead, out of necessity. In doing so, they abandon their sustainable practices. If multinationals were, in fact, truly sustainable, through their success they’d inspire thousands of companies in poor countries to remain sustainable as they grow, and provide them the model to do so.

I run a company in Rwanda that uses banana trees to make maxi pads. Specifically, we use the fiber from the tree bark that farmers typically discard after they harvest the fruit. It’s organic, renewable and can be composted. Compared to your average consumer packaged goods company, we use a fraction of the electricity and water. We don’t use chemicals to make the pads super absorbent or neon white. But that’s not why we’re sustainable. We’re sustainable because we make decisions based on ground-level pragmatism, not lofty moral principles.

We do this because we have no other choice. We work in a 2,500-person community, so if our neighbors don’t like how we’re treating the nearby river, or our employees, they won’t work for us or buy our products. We research every aspect of our supply chain and listen to every person who works on it — the banana farmer, the pad assemblers, the neighboring community and our customers. And we make decisions that allow each employee to earn a living wage — while our business continues to grow. In my mind, that’s the definition of “sustainability”: a set of operational principles that allow a company to sustain itself financially while being a good social and environmental steward.

Ironically, it is businesses in poor countries that have become a model of sustainability — largely by necessity. Rwanda is a country with historically little manufacturing, unlike neighboring Kenya, Uganda and even South Africa. If we were a larger company, we might have been able to recruit experienced — and expensive — manufacturing staff from outside the country. But we didn’t have that option. Even if we did, that would be a short-term solution. So we partnered with American and Rwandan universities to train new graduates from the technical schools in Eastern Rwanda. As a result, we can afford to hire employees from the local community. Ultimately, our staff will provide expertise to others, keeping skills in-country.

When we first started out three years ago, we spoke with 600 banana farmers to determine a unit price for extracted fiber that makes harvesting that fiber profitable for them and cost-effective for us. Once we got the fiber from these local farmers, we used household blenders and water to fluff it into the core component of the maxi pad. This simple, inexpensive method has no negative effect on the environment.

Critics would argue that it may be impossible for multinationals to operate like we do. Our ten-person company is a lot different from Unilever. But that doesn’t mean big multinational companies can’t follow our lead.

PHOTO: A Rwandan tea picker works in a field at Mulindi estate, about 60 km (40 miles) north of the capital Kigali, August 5, 2010. REUTERS/Finbarr O’Reilly 

10 comments

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Excellent. Love the perfect simplicity and do believe it can be applied at larger corporate level, just takes a shift in thinking. Just a shift in thinking!

Posted by AdventureBurren | Report as abusive

Thank you for lending an air of credibility to the buzzword of “sustainability”? Some would call it BS. The Emperor has no clothes…

You have a challenging job.

Posted by ptiffany | Report as abusive

The book by Paul Hawken “The ecology of Commerce” goes into greater detail on the question of why should we do this.

Posted by Mazer | Report as abusive

The “measuring governments’, multilateral organizations’ and non-governmental organizations’ level of sustainability…” is the absolutely essential process of quantifying what they do in terms of effectiveness and efficiency. Without data there is no equitable or realistic understanding for comparison.

The lack of effective goals and meaningful review of what works and what doesn’t is precisely why education in the United States has achieved less and less at greater and greater expense over the years. Those in and of such process largely refuse to be accountable in any meaningful way to those who foot the bills.

You judge such process “bad” because it “misdirects resources”. Please. Since our society has yet to reach any discernible consensus as to social or environmental “good” or “bad”, most such decisions are a “best realistic compromise” at present which may be better at limiting harm than actually doing good. To infer that steps taken in the right direction, steps forward necessary and desirable to reaching a “best solution” are “bad” is inappropriate.

Any process of improvement will always a “work in process”. The many parameters pertinent are constantly changing. “social good” is merely an individual judgment, largely in the eye of the beholder. That’s not measurable, although the concept can be used to persuade people to “do the right thing” when all else fails.

It is folly to make the “perfect” the enemy of the “good”. Sometimes, in terms of time and money, the “good” is more achievable and sustainable in the “real world”. As the saying goes, “Even if you’re on the right track, you’ll get run over if you just stand there”.

The support and resources to achieve worthwhile long term goals incrementally over time will become available ONLY through reasoned debate and consensus. As of yet, there exists no political or social framework or forum for such citizen debate, but if the process were more obvious or easy it would have been completed long ago.

You complain of the inherent complexities and interdependence of “multinational corporations”. These are NOT the only form of profitable commerce, the “engine of prosperity” that makes a rising standard of living possible for consumers.

It should be obvious that this big blue marble has NO chance of ever offering SEVEN BILLION PLUS people the life today enjoyed by the successful (not all) members of western societies. So yes, what is good for western societies is NOT necessarily good for third world ones.

But I doubt you would volunteer to step forward and explain the “why” to them in specific and graphic cultural detail. You claim your company to be “…sustainable because we make decisions based on ground-level pragmatism, not lofty moral principles…because we have no other choice.”

Pragmatism and moral principles are NOT in fundamental conflict, as you suggest. Indeed you have harnessed the two quite nicely to good effect. Yet your words come across as negative, not positive.

Why do you not instead seek to point the way for others to follow in their own way at their own pace? It serves no useful purpose to judge and offend others less forward-looking.

Considering the literally countless challenges associated with “sustainability” it should be obvious that the “one size fits all” perspective is unrealistic in terms of either enterprise or society. That’s a good thing, actually.

It actually increases potential options of positive effect. To fully perceive what can and should be done, and when, the “glass half full” and “glass half empty” parable is always good place to start.

Posted by OneOfTheSheep | Report as abusive

Good luck and G-d bless!

Posted by UauS | Report as abusive

‘Sustainability’ had a clear definition decades ago before it became a misused buzzword. As a college student in the late 1980s I learned from my environmental sciences professors that sustainable means any process that can be continued indefinitely. This is primarily about resource usage and the resource replenishment rate regardless of the time horizon for the exhaustion of the resource. Burning fossil fuels is unsustainable simply because, for a human time frame, they are not replenished at all. Extracting water from an aquifer is sustainable if the rate of extraction does not exceed the rate of recharge.
There is no morality component to sustainability. If a polluter is dumping waste at a rate which natural processes ‘clean up’ and the waste is therefore not accumulating to harmful levels, it is a sustainable process regardless of our view of the morality of the pollution.
The morality of actions must be assessed separately. Unfortunately a process may be completely sustainable but morally repugnant. Slavery is an example. The slave owner is engaged in an unquestionably immoral practice, but as long as slave acquisition and management are carried out so as to not deplete the resource faster than it replenishes itself, then it is sustainable.
A strange idea, I know.
Other examples of unsustainability:
A college student who wastes his time resource by partying all the year is engaged in an unsustainable practice simply because existing forces will bring this to an end, namely he will flunk out. It can’t go on indefinitely.
People who poison themselves with alcohol and drugs at a rate faster than their bodies can heal will eventually sicken and die. The poisoning cannot go on indefinitely, at least not at that rate.

Posted by tmorgan | Report as abusive

The author does not mention how this initiative is sustained. Are the products sold exclusively in the country of production or exported to western nations? If they are exported, then her company is “multi-national” and becomes a consumer of transportation assets on a global scale. If the company only sells their production in-country, even using a horse-cart requires the consumption of resources not associated with the product. The author is arguing semantics–I am more “sustainable” than someone else, therefore you should embrace my definition only.

One could also argue that ANY company that reduces their historic consumption of resources while maintaining their production levels is “sustainable”.

The point is that “sustainable” is a term that is open to various interpretations because the production environment is a mix of various resources required for economic success. While sustainable is often substituted by “renewable”, many, if not all, still require the consumption of limited and/or non-renewable resources to be economically viable: e.g. transportation and distribution. In the same way, sustainable wind energy consumes (limited) copper, to produce generators or other (limited/non-renewable) products to construct their core product (epoxy, plastic, fiberglass, etc.) does not make them any more or less sustainable.

Sustainable is in the eye of the beholder.

Posted by COindependent | Report as abusive

You make it very clear what you understand by sustainability, something I miss in many corporate attempts to communicate their sustainable practices. In this sense your critique still stands and deserves to be taken seriously.

Though still small, I consider your initiative a great example for others to follow. You walk your talk. Keep walking.

Posted by hskoppek | Report as abusive

Thanks for sharing. I could not agree more. Many of the practices can be scaled and that’s exactly what we are trying to do at Unilever where we have made some tougher commitments to ensure a more equitable and sustainable world for all. I just came back from a visit to Kenya last week , not only to pay my respect for the victims of this terrible disaster , but also to talk to the farmers and people with visual disabilities for which I have a special passion. As member of the high level panel for the post 2015 MDG’s I have heard over and over the need to leave no one behind and put sustainable development at the core. The events in Kenya were once more a good reminder to stay focussed on that journey. More than sustainable growth alone its transforming the economies for jobs and inclusive growth. It also requires effective ,open and accountable institutions. An area we can all push for. Only by working the challenges together can we get to this better world for all. You are clearly playing your part for which I am grateful. What we in the end call it is not that important. We will ultimately be judged on what we do. Thanks again. Paul Polman global CEO Unilever

Posted by paul.polman | Report as abusive

I know of no one else who tracks the roots sustainability back to the Sierra Club but anything is possible and anyone can write pretty much anything without bothering to fact check. Certainly the Sierra Club has not used the term much in terms of their own activities continuing with their focus planet: explore, enjoy and protect the planet.

I prefer to point out that the concept of sustainability, for me, is best expressed in The Constitution of the Iroquois Nations (18th century) as the Great Binding Law, Gayanashagowa. It reads, “Look and listen for the welfare of the whole people and have always in view not only the present but those whose faces are yet beneath the surface of the ground — the unborn of the future Nation.”

Committed as I am to increasing awareness of this concept, and building on the work of others, particularly the members of the Brundtland Commission (Report, October 1987), the attendees at the Rio Earth Summit (1992), and the sponsors and participants in the recent Regeneration Project, I chose the term sustainability to represent the concept of the next seven generations.

And, as part of my commitment, there are now over a 1,200 voices of sustainability that we have curated and indexed in our search engine, EarthSayers.tv, voices of sustainability. Each of these voices – it’s all video – give definition and understanding to the term and demonstrate the strength of integrating planet, people and profit in words and actions.

A March 2013 New York Times opinion piece (bit.ly/thinksilos) talks about sustainability – the “realms” of environment, social, and economic- as being better represented as nested into one another, rather than remaining disconnected in silos or illustrated as columns or chopped up into disciplines. They call it a new architecture.

The term is not solely the purview of business owners or environmentalist or economists, all though often, as in Elizabeth Scharpf’s article, it is represented as being all about commerce, supply chains, indexes etc. and its “buzziness” viewed not as a measurement of awareness but a sell-out, a cover for misdeeds, fakery. This is called dissing. And dissing makes for news hence, I guess, the assumption-laden title of this piece in a place with considerable distribution.

As an antidote to buzz, I can recommend five sustainability thought leaders to hear from, or any one of them will do, so readers may find helpful in understanding the term and feel more confident using it. Here they are:

Steve Cochran,bit.ly/earthsayercochran, National Center for Sustainability; Dr. Karl-Henrik Robert, bit.ly/earthsayerKarl, Founder of the Natural Step; Ms. Hunter Lovins,bit.ly/earthsayerlovins, Natural Capital Solutions; llarion Merculieff (Aleut) bit.ly/earthsayerllarion; and Professor Stuart Hart, bit.ly/earthsayerhart, Samuel C. Johnson Chair in Sustainable Global Enterprise at Cornell University’s Johnson School.

Posted by EarthSayer | Report as abusive