Reprinted from Greenbiz.com, 16 Feb 2016
People like me — professional optimists in the field of sustainability — are fond of pointing out the positive. And lately there have been many positives to point out, such as the global adoption of the Sustainable Development Goals and the Paris Agreement on climate change.
However, sometimes even optimists need to wake up and smell the coffee. This metaphor is not as positive as it sounds (I love the smell of coffee), because it means that in some important respects, we optimists are sometimes living in a dream world.
Last week I woke up from a happy dream about global agreements and was reminded of the following stark fact: While there are happy signs of forward motion on sustainability, all around us, we are still, in real physical terms, just getting started on the actual challenge of sustainability transformation. This is especially true in the business sector.
Case in point: A comprehensive new research study in the Journal of Cleaner Production makes it very clear that corporate sustainability programs are still a long, long way from the actual practice of biophysical sustainability.
You might say, “Yes, well, we knew that already.” So did I. But the numbers were still shocking, even to me (and I’ve been tracking the trends in sustainability for nearly 30 years).
Researchers in Denmark recently analyzed 40,000 corporate responsibility, sustainability, and CSR reports, dating back to the year 2000. (Just the thought of looking at 40,000 such reports is already shocking.) The authors focused only on companies producing physical products; they excluded services such as finance and retail. And they found that the number of those companies making reference to actual ecological limits — the hard-and-fast physical boundaries that we must live within, here on planet Earth — was exceedingly small: just 5 percent.
What is more worrying: That 5 percent figure had not changed significantly over a 15-year period. Many more companies produce reports, of course; but the portion of them referencing the limits of ecosystems was static. By that measure, corporate sustainability reporting has not improved, on average, in a decade and a half.
The title of the article by Anders Bjørn et al. is framed as a question: “Is Earth recognized as a finite system in corporate responsibility reporting?” After 40,000 reports, the authors summarize their answer this way: “Not really.”
The story actually gets worse from there, but it’s time to fill in some details. By “ecological limits,” the researchers were referring to things like the agreed 2-degrees-C limit on global temperature rise from greenhouse gas emissions, the limits of forests or fish to regenerate themselves, and other tipping points in ecosystems. They also carefully excluded references to big-picture, long-term-vision terms like “circular economy” or “cradle to cradle,” and focused on concrete references to “quantifiable disturbances in nature.”
We know a great deal about these limits and disturbances nowadays, thanks to concepts like Planetary Boundaries. But that knowledge has not made its way into corporate sustainability reporting. If any ecological limits were mentioned in those reports at all, it was most often 2 degrees: other limits were hardly on the corporate radar screen.
Mentioning limits in your corporate report is one thing; actually managing your business with limits in mind is another. Can you guess how many companies — out of 40,000 that were analyzed — used ecological limits for real target setting? for management of the business? for adjustments in their product portfolio? Hint: It was much, much less than 5 percent.
Answer: 31 companies. In percentage terms, that’s 0.3 percent.
From there, the authors go on to analyze just why these numbers are so low, and they do a remarkably thorough job — for example, Bjørn et al. compared their data with the CDP data, and found that 17 companies listed by CDP as “committed to GHG emissions reduction targets that limit global warming to below 2 degrees Celsius” did not show up in their study’s database, because the 17 companies in question did not actually mention 2 degrees “or any other climate change-related ecological limit” in their published reports.
The authors also looked into three case studies of companies that have made commitments to manage their operations and products with ecological limits in mind (in this case related to climate change). They chose Alstom, Ricoh, and Nissan — two of three are Japanese, because it turns out that Japanese firms are over-represented in the list of companies publicly embracing quantifiable ecological limits. The findings? These best-in-class companies still “did not directly report progress towards planned changes based on ecological limits.”
This is a ground-breaking, potentially worldview-altering study that deserves deep reflection, by everyone in the sustainability community (I have only summarized its most news-worthy points). Despite many years of successful efforts to get sustainability on the table — the concept is now thoroughly mainstreamed into corporate management, and its adoption continues to spread — this study suggests that the way we practice sustainability, even just from an environmental perspective, is still woefully lacking.
Until business management starts to pay serious attention to the limits of our planet’s ecological systems, and to manage its operations with these limits in mind, our planet’s ecosystems remain at grave risk. (I wonder what a similar study would find when it comes to the social dimension?)
After also reviewing many of the initiatives that do exist to promote a more serious engagement with limits (such as the setting of “science-based targets” or “One-Planet Thinking”), Bjørn et al. sound yet another note of caution. They remind us that so far, eco-efficiency has not managed to decouple environmental impact from economic growth. So efficiency alone won’t cut it; deeper changes are necessary. For that reason, “we find it problematic” (they conclude with academic understatement) “that none of the recent initiatives appears to ask companies to reflect upon the role of their products in a societal transformation towards sustainability.”
I still believe we should celebrate sustainability’s recent successes: They are hugely meaningful, and thousands if not millions of people have struggled to get us this far. It’s hard work transforming economic systems, and we need to celebrate every major step towards victory.
But we also need to bear in mind: the world’s sustainability journey is truly just beginning. And the alarm clock is ringing ever louder.