On Sustainability

"Sustainable development," they say. A term thrown around by everyone from slick corporate consultants at the World Bank to those doom mongering deep ecologists. But how do we truly understand this so-called "sustainable development"? By studying it in practice, of course.

So let's dive in. First, let's define sustainable development. The World Bank, UNEP, and EPA all have their own definitions, but to avoid being boring, we'll go with The Seven Generations definition. The Seven Generations definition of sustainability is a principle that is based on the belief that decisions made today should consider the impact they will have on the next seven generations. This principle is grounded in the belief that the actions of each generation should not diminish the opportunities available to future generations, and that people have a responsibility to preserve and protect natural resources for future generations.

In the context of sustainability, this principle suggests that decisions made today should take into account the long-term consequences they will have on the environment and the well-being of future generations. It is a call to think beyond the immediate needs and concerns of the present and to consider the impact that our actions will have on the world that future generations will inherit.

It is difficult to determine the exact factors that drive businesses to adopt sustainable practices. It is likely that a combination of factors, including government programs, pressure from environmental activists, and concerns about their own long-term viability, play a role. There is also likely to be resistance to sustainability from extractive industries, agricultural interests, and the lumber industry, as these sectors may stand to lose from the adoption of more sustainable practices.

As for "pro-business environmentalists," it is possible that they may have some influence on business practices. These individuals and organizations may be able to use their knowledge and expertise to advocate for more sustainable practices within businesses and help them to understand the potential benefits of sustainability. However, it is important to recognize that there may also be conflicts of interest and that the primary motivation of these organizations may be to promote their own agendas rather than the broader goal of sustainability.

Environmentalists, including both radical groups like Greenpeace and more moderate organizations like the Rocky Mountain Institute (RMI), can influence government laws and practices through a variety of methods. These can include lobbying for specific legislation or regulations, participating in protests and demonstrations, and using social media and other forms of communication to raise awareness about environmental issues. In some cases, environmentalists may also use legal action to challenge government policies or practices that they believe are harmful to the environment.

Environmentalists can also have an impact on business practices through similar methods, such as lobbying for more sustainable practices within businesses, participating in shareholder activism, and using social media and other forms of communication to raise awareness about environmental issues. In addition, some environmentalists may work directly with businesses to help them adopt more sustainable practices, either as consultants or through partnerships.

One of the problems with sustainability is that the term can be used to serve specific interests, often by twisting its definition to fit a particular agenda. This can make it difficult to determine the true motivations behind sustainability efforts and to assess their potential impacts.

Another issue with sustainability is the use of force and state power against activists overseas. This can include violence, intimidation, and other forms of repression, which can have serious negative impacts on sustainability efforts and the people who are working to promote them.

In addition, there have been instances where environmentalists have failed to incorporate local economic interests in their definitions of sustainability. This can lead to conflict with local communities, who may feel that their needs and concerns are not being taken into account.

The economics of sustainability can also be complex. The short and long-term consequences of sustainability programs can vary depending on the specific circumstances and the specific goals of the program. Defining the economic benefits of sustainability can also be challenging, as the benefits may not always be immediately apparent and may take time to materialize. In some situations, it may be necessary to broaden the definition of sustainability to incorporate the immediate economic interests of affected populations, as these interests may be closely linked to the long-term sustainability of the community.

There are a wide range of organizations that support sustainability in the US, Europe, and the developing world. These can include environmental groups, advocacy organizations, and government agencies, among others. These organizations often work to promote sustainable practices and policies through a variety of methods, such as lobbying for specific legislation or regulations, participating in protests and demonstrations, and using social media and other forms of communication to raise awareness about environmental issues.

Sustainability can intersect with anti-colonial and anti-corruption movements in a number of ways. For example, colonial-era policies and practices may have had negative impacts on the environment, and addressing these impacts may be an important part of promoting sustainability. Similarly, corruption can undermine the effectiveness of sustainability efforts, as it can divert resources away from these efforts and make it difficult to hold those responsible accountable.

Political campaigns based on sustainability can have a variety of outcomes. In some cases, these campaigns may be successful in promoting sustainable practices and policies, while in other cases they may not achieve their desired goals. The outcome of a particular campaign may depend on a range of factors, including the specific goals of the campaign, the level of support it receives, and the resources available to those promoting it.

Skeptical sarcasm aside, the issues surrounding sustainable development are complex and multifaceted. It will take careful examination and consideration to truly understand the concept and its impacts. Many large international corporations set sustainability targets in areas such as carbon emissions reduction, water management, biodiversity conservation, social responsibility, and waste reduction, but often struggle to meet these targets due to the complexity of the issues and the challenges of transitioning to more sustainable practices.

As a society, we are constantly bombarded with calls for sustainability. Companies large and small tout their commitment to reducing carbon emissions, conserving water, protecting biodiversity, promoting social responsibility, and reducing waste. But are these lofty goals really achievable?

Take carbon emissions reduction targets, for example. Many companies have set ambitious targets to reduce their carbon emissions in order to combat climate change. But the reality is that transitioning to low-carbon operations and supply chains is no easy feat. It requires significant investment and a complete overhaul of business practices, and it's not surprising that these targets are often missed.

Water management targets are another area where companies may struggle to deliver. Reducing water use and improving the quality of water discharged from operations can be challenging, especially in regions where water is scarce or where there are regulatory challenges.

Biodiversity conservation targets are no less daunting. Protecting endangered species and preserving natural habitats sounds noble, but the complexity of biodiversity and the many factors that can impact it make these goals difficult to achieve.

Social responsibility targets can also be problematic. Improving working conditions and reducing poverty in supply chains are worthy goals, but the complexity of social issues and the many stakeholders involved can make it difficult for companies to deliver on these commitments.

And let's not forget about waste reduction targets. Reducing the amount of waste produced and increasing recycling rates may sound straightforward, but the complexity of waste management and the many factors that can impact it make these goals difficult to achieve.

So the next time you see a company boasting about its sustainability commitments, take it with a grain of salt. These goals may be admirable, but they are also very difficult to achieve in practice.

This brings us the current incarnation of Sustainability: "ESG".

ESG (environmental, social, and governance) is all the rage these days, and it's no surprise that the big players in the game are the ones leading the charge. These companies, perched at the top of their respective food chains, have long relied on profits to get them where they are. But now, they're preaching the virtues of ESG and using it as a way to differentiate themselves from the competition. They shame those who still focus on profits and make it difficult for them to succeed.

This shift towards ESG is changing the game for smaller players. It creates a new "barrier to entry" for those without the resources or reputation to promote their own ESG initiatives. The larger companies, who can effectively control the narrative, may concentrate power and turn the market into an oligarchy or corportacracy, rather than a constitutional republic. And if these companies can wield their power over media, social media, and government to shape public opinion and policy in their favor, it's a particularly concerning development.

ESG is a big business, worth an estimated $35 trillion in investments and has grown 15% in the last two years. However, the foundation of this multi-trillion dollar industry is not what it appears to be. MSCI, a company that produces ratings for ESG practices, has come to dominate the industry and earns 40 cents on every dollar spent on ESG ratings. However, MSCI's ratings are subjective and based on unregulated data, and the company has been known to upgrade ratings for companies simply by changing its methodology or weighting of scores. Companies with higher ESG ratings can benefit by getting included in funds and lowering their cost of capital, and are keen to have good ratings. There have been concerns about conflicts of interest as MSCI also consults for companies on ESG issues.

This is similar to the case of Arthur Andersen, a multinational professional services firm that was once one of the largest accounting firms in the world. The company was known for providing audit, tax, and consulting services to a wide range of clients. However, the firm faced significant controversy and ultimately collapsed due to conflicts of interest. One of the major conflicts of interest that contributed to the downfall of Arthur Andersen was the company's dual role as both an auditor and a consultant for many of its clients. This dual role created significant conflicts of interest and raised concerns about the independence and objectivity of the firm's audit work, as the firm's financial interests were closely aligned with those of its clients.

In 2002, Arthur Andersen was convicted of obstructing an investigation into its audit of Enron, a major energy company that had collapsed due to accounting fraud. The conviction and the resulting loss of its license to practice as an accounting firm led to the collapse of Arthur Andersen and the loss of tens of thousands of jobs. The scandal and the subsequent collapse of Arthur Andersen served as a cautionary tale about the dangers of conflicts of interest in the professional services industry.

Meanwhile within the companies themselves. Implementing ESG can also be a significant investment of time and resources for companies notwithstanding the benefit it can bring to companies in many ways, such as building a positive reputation and establishing trust with stakeholders, identifying and mitigating risks, and creating long-term value for shareholders.

In the current business environment, companies are facing increased competition and tight budgets. This can drive companies to be more efficient and innovative, but it can also make it difficult for companies to invest in initiatives such as ESG, which may not have an immediate financial return.

As before, meeting ESG targets can be challenging for companies, as they are under pressure from the SEC to disclose more information about their ESG practices, which can be costly and difficult to comply with. Additionally, companies need to maintain financial autonomy in order to survive and thrive in the competitive business environment, which can make it difficult to justify investments in initiatives that may not have an immediate financial return. Companies may also face conflicting requirements, such as needing to reduce their carbon footprint while also decreasing costs and profits.

To successfully meet ESG targets, companies can implement strategies such as empowering departments to take ownership of their ESG goals, directly budgeting for EHS initiatives, and focusing on culture change to increase employee engagement and buy-in. Additionally, companies should set targets that are achievable and do not cause major financial harm or failure.

As we grapple with the pressing issues of environmental degradation and societal inequality, it becomes increasingly imperative that companies take a proactive stance towards responsible and sustainable practices. Environmental, Social and Governance (ESG) targets provide a roadmap for companies to operate in a responsible and sustainable manner and have become a crucial consideration for investors, consumers and other stakeholders.

While ESG targets can offer numerous advantages, such as enhancing a company's reputation, identifying and mitigating risks, and creating long-term value, they also pose a unique set of challenges. The process of implementing ESG targets can be a significant investment of time and resources and requires a significant shift in corporate culture, strategy and operations. Additionally, the lack of standardization and regulation within the ESG industry can make it challenging for companies to measure and report on their progress. Despite these challenges, it is of paramount importance that companies take a proactive stance towards meeting ESG targets. Environmental stewardship, particularly in relation to water, is a critical and vital goal for companies to strive towards. By implementing the right strategies, companies can successfully navigate the challenges of meeting ESG targets while also fulfilling their responsibilities to society and the environment. It's crucial that companies set realistic and targeted goals, and avoid actions that may result in backlash from voters, consumers or workers. This ensures that the company's efforts in meeting ESG targets are not only beneficial for the environment but also for the public and their employees.

Implementing ESG targets may offer advantages for companies, but it poses significant challenges as well. The lack of standardization and regulation within the ESG industry can make it difficult for companies to measure and report on their progress. Implementing ESG targets requires a significant shift in corporate culture, strategy and operations, which can be a significant investment of time and resources. Despite these challenges, it's crucial for companies to take a proactive stance towards meeting ESG targets, particularly in relation to environmental stewardship. By setting realistic and targeted goals and avoiding actions that may result in backlash, companies can navigate the challenges and fulfill their responsibilities to society and the environment. Responsible and sustainable practices are no longer optional, but a mandatory requirement to remain competitive and respected in today's business environment. Success in meeting ESG targets may be unlikely, but companies will steadily ratchet up their targets regardless.