Let's face it: true sustainability may not make economic sense

Wouldn't it be nice if a company's best decision matched its best environmental decision? Some say that's often the case already, and that if companies would only wake up and realize that, the contrast between profit and planet would diminish. I had the conversation about this again last week, fortunately, we agreed. It really doesn't happen often, especially when you're surrounded by investors and ESG bankers out in the world.

The business case for sustainability rests on several core arguments. Green practices create positive brand associations with consumers, policymakers, and regulators. They also anticipate regulatory trends and position the company advantageously when such policies become law. The mindset that strives for greater material and waste efficiency carries over into other areas. Likewise, the innovation required to solve environmental problems encourages innovation in general. And employees have higher morale when they believe in what their company is doing. That's why we now see "purpose"-driven companies and those that tell themselves that what they're doing is saving the world. Screw it.

These considerations and actions support the idea that the three points of the famous "triple bottom line" - people, profit, and the planet - are not inherently contradictory.

Unfortunately, 90% of the time the interests of profit are in blatant conflict with the interests of people and the planet, at least by any reasonable calculation. What would happen to your company's bottom line if it switched to a green power provider that costs twice as much? What would happen if it insisted on using only fair-trade products - throughout its supply chain? We're not talking about cosmetic changes like a few solar panels and the bike rack in the parking lot.

We are restricting green practices to a very narrow subset that involves little expense, risk, or disruption to normal business operations by appealing to the business case for sustainability. Such claims have a second, negative effect: they mean that the proper basis for environmentally conscious decisions is what is profitable. They affirm that profit is the right motivation by saying, "Be green and you'll make more profit." As a result, it is common to hear that green companies will likely be the largest business opportunity and that the current pandemic presents opportunities that should be exploited.

Did You Know?

I would also like to address the issue of planting trees. In 90% of cases, we plant trees for forestry. In Germany, 33% of the land is forest and forest land and 90% of it is for the economy. The quality of our soils, plants, animals, and rivers is already suffering.

Native species forests hold up to 42 times more carbon than single-species plantation forests.

Let's take this a step further. What if I told you, "Live your life in service to the planet because you'll make more money that way," and then showed you a few of the rewarding jobs available in the environmental sector? I'd be encouraging a lie because, in general, cutting down trees, draining oceans, and building shopping malls are more profitable than protecting forests from development. "People should make choices based on financial benefits," I'd add. These points, in my opinion, would not convince many people to participate in environmental work.

Similarly, for profit-driven reasons, few companies will adopt important environmental ethics.

Naturally, many people – and even some companies – take important steps towards sustainable development. We need to appeal to the real reasons behind these decisions if we want to do more of the same thing. The real motives are clear: love, care, and a desire to serve other people. We want to help each other, I'm still convinced. However, we are increasingly preventing this with these damned structures and systems.

Let's stop pretending. Let's stop sugarcoating everything and lets God damn it stop ignoring things. It may not be business sense, at least not in a way that can be predicted or quantified, if your company is to make a major move towards sustainability. You will have anything but the numbers to trust. It's the same thing at a personal level. Therefore, I appeal to new capital forms.

Usually, anxiety, uncertainty, and a moment of self-definition are when we go deeper into service. Who's that I am and what's that I serve? What am I doing here, actually? The same questions arise, both inside and outside the business world.

The phrase "business case for sustainability" implies something true. When we take a step toward stewardship, the world eventually returns our generosity, albeit in an uncertain form and at an unpredictable time. A business "case" includes numbers and predictions, but the general principle it attempts to convey is that the gift moves in a circle. What you do to the world will eventually come back to haunt you.

Typically, such principles are found in the realms of spirituality or religion, distinct from and in opposition to the world of commerce. It is past time to put an end to this estrangement. Even the most jaded business leader, at some level, longs to align their productive life with their deepest concern. What we are currently witnessing is the polar opposite: a deep mental & health crisis that pervades all social classes and cultures of our time. This does not imply disregarding business realities or throwing caution to the wind. It entails taking the next, slightly frightening, slightly outrageous step. It is taking a risk for which no credible "business case" exists. It stems from a different motivation.

Taking the next step always takes some courage because it goes against conventional wisdom and predictable financial self-interest. We will one day, hopefully soon, have to change the economic environment to remove the dichotomy between profit and environmental well-being. Green taxes, that is, shift the taxation of sales and income to pollution and resource extraction. Which doesn't just mean introducing a CO2 tax, that's too easy and basically nonsense. Furthermore, we need anti-ecocide laws that promote the alignment of ecology and money, but we will never be able to rely on self-interest alone to enforce love. There will always be a next step that makes no logical sense by the numbers.

This is a very different type of sustainability management. It stems from questions like, "Who exactly are you?" "What is it that you are concerned about?" and "Who do you work for?" Courage emerges from a thorough examination of such issues.

The other business case, based on profit, is merely a tactical device, a means of granting the bean counters - and our own internal bean counter - permission to say yes to what we all truly desire. Is it naive to believe that sustainability statements include anything other than greenwashing, marketing, and so on? Perhaps it is, but it is no more naive than believing that anyone will sacrifice measurable self-interest in order to serve our beautiful world.

If you liked this, feel free to share it with a friend. If you disagree, feel free to share it with a friend or your thoughts with me.

Happy Saturday!

Malte