With the declaration in parliament of a climate emergency and recent high-profile protests of Extinction Rebellion, it is clear that issues such as climate change and unsustainable ways of living are energising huge numbers of people. The growing preference among millennials for eco-friendly products (a 2017 survey revealed that 68% of millennials bought a product with a social or environmental benefit in the past 12 months) should give businesses pause for thought, especially since millennials now represent all adults between the ages of 23 and 38.
But it is also important to recognise that there is much more to sustainability than just environmental issues. This blog will explore what it means to be a sustainable business.
The hunt for profit
Picture the scene: a young naturalist called Stellar approaches you, describing his new discovery that will make you both rich. A huge “sea cow”, similar to the manatee but three times as large, that lives in the icy seas between Russia and Alaska. This beast is nine metres long and weighs up to ten tonnes, with tough grey skin and a thick layer of blubber.
You realise the commercial possibilities at once: the blubber will make fine, odourless lamp oil, the skin can be used to make strong shoes or warm waterproofs, its dense bones might be carved into attractive decorations, and each animal will provide meat to feed many people. By a stroke of luck, the meat is tasty and spoils remarkably slowly thanks to its high salt content.
Best of all, there will be no difficulty in hunting Stellar’s Sea Cow because they are so buoyant that they cannot sink below the surface of the water, leaving the friendly and slow-moving animals at the mercy of harpoons.
Several years of spectacular success follow – your ships land sea cow after sea cow, generating tremendous profit and allowing you to send even more ships to the Bering Sea. Your high-quality lamp oil and “mermaid’s ivory” become famous the world over.
But then revenues start to falter, and your crews report unusual difficulty in tracking down the huge animals. They are still catching enough to break even, but clearly something is not right.
A few years later, you are bankrupt, your ships are rotting in port, and Stellar’s Sea Cow is extinct.
Georg Wilhelm Stellar discovered his sea cow in 1741. By 1768, just 27 years later, they were extinct, having been hunted to oblivion by enterprising Europeans. Although there are many species that have suffered similar fates, Stellar’s Sea Cow is notable for the speed of its decline, and the fact that it was human greed rather than habitat destruction that led to its extinction.
This tragic story illustrates, perhaps rather ghoulishly, the meaning of unsustainable business. Initial success led to a ‘gold rush’ that quickly outpaced the sea cow’s ability to reproduce. When the hunters could no longer meet demand due to the collapsing population, the whole edifice came crashing down.
Sustainable business practices
What is meant by the phrase ‘sustainable business’? It’s not just about placing a few recycling bins around the office; it represents a fundamental shift in the way a business interacts with the world around it.
To take the waste example: minimising landfill is the duty of all responsible companies, but a sustainable business will also take care to preserve its financial and human resources. This means challenging organisational profligacy and ensuring employees don’t burn out, as well as striving towards positive involvement in local communities.
In practice, this could be achieved in part by offering development opportunities to all employees rather than just select groups, reducing churn and avoiding the huge costs of replacing staff. At the same time, businesses acting in this way will nurture a community of high-performing employees invested in the long-term success of the organisation.
Sustainable leaders practice systemic thinking – the ability to take a step back and consider how your business impacts upon its social, economic and environmental surroundings. This is best illustrated by the locust and honeybee theory1.
The locust and the honeybee
Historically, companies have taken a locust approach to business. Such single-minded pursuit of profit and growth for shareholders can lead to strong returns, but it encourages short-termism because leaders are driven to constantly pursue the fastest source of income. Like the locust, this kind of business decimates its surroundings by devouring everything that is available.
Yet the ‘profit at any cost’ model of business is fast falling out of favour, not just because the long-term failings of such practices are making themselves known, but because consumers and employees are beginning to look more and more favourably upon sustainable businesses.
The honeybee approach is therefore gaining traction. This model emphasises acting in the interests of more than just the CEO, as well as ensuring that the operating context is sustainable. By aiming for the path that benefits the broadest section of stakeholders, honeybee businesses tend towards the long-term view.
By leading with, not over, others, business leaders will encourage the sort of employee buy-in that propels long-term success. If you want your business to still be going strong in 100 years, you can’t create a system that relies on any one individual, or one that strip mines its source of income.
We’ll be publishing more information about sustainable business over the next few weeks, so follow us on social media to keep abreast of the latest news and research.