Does Wall Street really care about sustainability? This was one of the questions in the air at the Ceres conference last week, where managers of trillions of dollars of assets gathered to assess and advance the state of ESG/SRI/sustainable/impact investment.Sprint/Nextel CEO Dan Hesse observed that he’s never been asked about Sprint’s sustainability initiatives on a quarterly analysts call–despite Sprint’s rapid rise up the Newsweek green rankings to #3. Anne Stausboll, CEO of investment giant California Public Employees Retirement System (CalPERS), wasn’t surprised. There are three kinds of investors, she said: traders, raiders and owners. The traders are looking for short term gains, and they’re the ones on those calls. CalPERS sees itself as owners–with an investment horizon of 100 years–and just isn’t interested in those calls.
Often we find what we’re looking for. What is your company looking for?
It seems the theme’s a meme. It’s there in The Upcycle, the new book from Bill McDonough and Michael Braungart, and Flourishing, the latest gem from John Ehrenfeld. It’s even on many lips at FortuneGreen this week.
Think about it:
That’s what I’m talking about these days with our clients.
“For 25 years sustainable development has been held up as the solution to the world’s problems. But instead we have had ever more pollution, biodiversity loss and climate change. Sustainability has been abused like few other terms in history. It is time to think not just about sustaining the world’s badly damaged ecosystems and human communities, but about regenerating them instead?” That introduction to this year’s Schumacher Lectures in the UK offers good food for thought this Earth Day.E.F. Schumacher, author of the 1973 classic Small is Beautiful, had a career that included two decades as Chief Economic Advisor to the UK National Coal Board and more notable final years as an advocate for “appropriate technologies”—which Wikipedia describes as “encompassing technological choice and application that is small-scale, decentralized, labor-intensive, energy-efficient, environmentally sound, and locally controlled.”
Fritz was one of a handful of seminal thinkers—including Robert Rodale and Buckminster Fuller—who were speaking, way back in the 1970s, about regeneration, regenerative economies, the regenerative capacity of earth’s ecosystems. These regenerative roots of what we now call the sustainability movement provide, I think, a more fertile meme than mere “sustainability.”
Here’s a test to see if I’m right:
If your company were focused on building regenerative capacity—its own, of its value chain, of its communities, of the local and planetary ecosystems that support it—how might you do your business differently?
What new opportunities might emerge?
That’s why Natural Logic is looking for 3 companies to join us in a business experiment—a phased, disciplined, and frankly confrontive exploration of the massive business value at the intersection of your business, your purpose and what the world needs from you.Will yours be one of them?
Though even that can be profitable. The ecoefficiency initiatives that characterized early sustainability efforts delivered nearly half a billion dollars to Interface‘s bottom line 1996-2012—contributing more than a third its total operating income in that period (and probably kept the company alive during the 2001-2 real estate downturn, according to its late CEO Ray Anderson).
Growing top line revenue makes a much more interesting story to most companies than trimming expenses, even as dramatically as Interface has done. After Natural Logic helped Levi Strauss & Co build its sustainability strategy a few years ago, Levi’s® took its learnings to market. In a big way. Guided by lifecycle assessments that pegged the biggest shares of footprint for a pair of blue jeans to growing cotton and laundering the jeans—both activities outside its direct control—the company took responsibility and took two bold steps (among many others):
In fact nearly half of the 2600 respondents to the latest Sloan/BCG sustainability survey say they’ve “changed their business models as a result of sustainability opportunities,” and more than one-third reported profit from their sustainability initiatives.
Where can companies find those opportunities?
We’ve learned, in our work with Natural Logic‘s clients, that the real opportunity lives in deep innovation at the constellation of profit, brand, risk —and purpose. Taken together, in their interactions and interdependencies, this constellation opens the door to a new level of business value in service of societal and environmental impact.
In fact many of the 29 companies that participated in WBCSD’s Vision 2050 project (“a new agenda for business laying out a pathway to a world in which nine billion people can live well, and within the planet’s resources, by mid-century”) found that what the world really needs—and what they know how to do—and perhaps is what they’re really here to do.
And yet… while 49% of CFOs (in a recent Deloitte study) saw a significant link between sustainability performance and financial performance, “only 39% feel that it is ‘very’ important to communicate the value of sustainability to their employees.”
To be continued…