Without further ado, let's get back to where we left off.
Hi Hunter, thanks again for talking with us. Much of what ties together your work involves demonstrating that there is a business case for sustainability. What are the problems we're facing, and how does business play a role?
Capitalism is the worst economic system except for all the rest! It has many flaws that its critics are quick to point out. What we now have is what you might call a "market democracy," which can be summed up as: How many politicians can you afford to buy? This sort of capitalism is a part of what's driving us in the direction of "unsustainability." But it is also bad capitalism. I believe capitalism, conducted according to its real logic, is an important part of the solution to the very serious challenges facing us today. The business community has not only the opportunity, but the obligation to step up and take a leadership role in crafting a future that works for us all. The business leaders that accept this challenge will be the billionaires of tomorrow. The rest .well, as Ed Wollard of DuPont once said, "They won't be a problem, because they won't be around."Make no mistake about it; we live in very challenging times. You can work yourself up into a pretty fair case of getting scared about the future, if you look at all of the challenges facing us. We have just had the warmest, or second warmest, year ever in recorded history. Climate change is clearly real. In early February, even some of the Evangelical Christian leaders acknowledged that climate change is real, and that what humans are doing changing the climate is "Destroying God's Creation."
This is sobering stuff. And the news keeps getting worse. Recently, the British Prime Minister stated that humankind has less than 10 years to reduce emissions of carbon and other greenhouse gasses before we're facing runaway climate change.
In such a grim situation, business as usual is no longer acceptable. The way we now do business, the market system, capitalism, is part of what is creating the challenges. So, what do we do? Do we completely overthrow capitalism? Well, that's been tried, and it didn't work. The communist system was just as destructive of the environment and people. To the extent that it wasn't, it was because it was so inefficient that it couldn't destroy people and the environment faster.
So, how do we work within the system that we now have? What about it do you think needs to be changed?
That's the real question. The system that we have in front of us is exactly what we have to work with. But I am optimistic that it will be enough.
First, let's be clear what we are dealing with. Of the one hundred largest economic entities on the planet, well over half aren't countries anymore, they're companies. In David Korten's words, "These guys rule the world." The business community may be the only institution left on the planet wealthy enough, and well enough managed to tackle the problems facing us.
A good capitalist enhances all forms of capital, in order to create even greater wealth. But the way we are currently practicing capitalism is actually a violation of this logic. The present system enhances manufactured and financial capital, but it does so at the expense of protecting and enhancing human capital: culture, community, transmission of intact values, and, natural capital: the capacity of the planet to sustain life. To be called good capitalists, we should be enhancing all forms of capital.
But some of the forms of capital are more valuable than others. Indeed, natural capital, which underpins the ability of the planet to support life, and thus all economies, can be said to have an infinite value, because without it you don't have a future, and thus you don't have economics. But none of this value is counted on anyone's balance sheet. So we are treating this capital as if it has a value of zero. This is clearly wrong. Even conservatively estimated, the value of natural capital is at least as significant as all of the capital that is counted, it contributes something like 30 trillion dollars a year of worth to the economy that we do count. The way in which we're currently behaving is just bad capitalism.
In Natural Capitalism, the book I co-wrote with Amory Lovins and Paul Hawken, we argued that it's actually in the interest of business to behave more sustainably, to behave more responsibly, to the planet and to people.
We created a set of principles to guide business in creating even greater value. The first of these principles is to use resources dramatically more productively. This is in the interest of business because doing so is profitable now. But it also solves most of the problems we now face. It slows down depletion and pollution, and it buys us time to implement the second principle: to fundamentally redesign products and processes in society so that they are manufactured in the way that nature does business. Doing this would eliminate toxins, eliminate waste, and create an economy that, as nature does, runs on sunlight. The final principle is to manage all institutions to be restorative of human and natural capital. Business can achieve a great deal through reducing waste, but if it is to be truly sustainable, able to endure indefinitely, it must create more of the forms of capital that is in short supply as a part of "business as usual."
Much of the work that I do now is to show companies, communities and countries how to take advantage of these sorts of opportunities. Take companies, for example. Many people who want companies to behave more responsibly have put forth what is called "the triple bottom line" arguing that companies should measure not only profit, but also protection of people and the planet. I actually think this is wrong. It would be nice if companies, out of the goodness of their corporate hearts want to manage this way, but realistically, few will. When things get tight, companies will revert to managing for what they see as the "real" bottom line." And in so doing, they will miss the enormous opportunity facing them.
Given the challenges now facing the world, companies that become part of the solution can achieve greater and more durable profits. A corporate commitment to behave in more sustainable ways actually enhances every aspect of shareholder value, whether it be increased profits, increased market share, the ability to drive innovation, to attract the best talent, to reduce cost, and reduce risk. We call this approach "the integrated bottom line."
Companies that embrace sustainability can increase market share, and differentiate their brand. This is the same strategy we were talking about in regard to helping the Afghans badge their carpets and their fruits and nuts as sustainably-produced. The same logic applies to companies in this country.
When you pull together all of the opportunities in the sustainability realm, you have the recipe for prosperity over the coming decades; for durable competitive advantage. For those of you who want the proof of this assertion, check out the numerous documents on my website: www.natcapsolutions.org. But what is heartening to me now is the diversity of groups coming to us to get help in implementing these ideas. The real proof will be their success. Natural Capitalism Solutions, my company, is now working with a manufacturing company in Chicago, a food services company in California, and even the Fort Carson Army post, which has committed itself to become sustainable by 2027.
They are representative of the opportunities facing companies. PortionPac has for years produced cleaning solutions that are safer and more efficient to use than the products that their competitors offer. They sell portion controlled solution rather than gallon jugs that contain mostly water. When the PortionPac management heard about sustainability they realized that this is what they had been trying to do all along. They approached us and asked, "How can we use the concepts of sustainability to run our company even more profitably?" It's heartening to see ordinary corporate managers getting excited about ways to treat their people better, ways to be more environmentally responsible, as the route to enhance their shareholders' value.
Fort Carson is an interesting example. It is a military base that has set far more aggressive sustainability goals than most cities, including 100% renewable energy and zero waste by 2027, along with a 40% reduction in vehicle traffic from present levels. At the same time, the Army Post is scheduled to expand by about 50% in the next three years—making sustainable growth planning an urgent priority. Christopher Juniper on the Natural Capitalism staff is helping the Mountain Post implement the Federal order that directs all parts of the Federal system to become more sustainable. The Garrison Commander also realizes that if his base does not behave as a good neighbor, the surrounding communities will not want the base occupying all that valuable real estate. So the base has taken the lead in creating conservation easements with neighbors, reducing its use of energy and water, implementing alternative transport systems like plug in hybrid vehicles, designing green buildings, and generally taking a leadership role in bringing such opportunities to the Colorado Springs region.
With a majority of Ft. Carson soldiers and civilian staff living off base, sustainable transportation is a major focus of our efforts. It is not lost on these soldiers, many of whom are headed for Iraq, that what they do to reduce oil use on the base can help their mission overseas. Given the state of oil production and consumption, it is clear the U.S. needs a more holistic approach to energy planning, and Ft Carson is helping find the alternative fuels and indeed alternative systems for transportation that will make the future possible.
Setting such indicators is a good way for a community or indeed a company to begin a sustainability effort. A similar process, undertaken in Seattle, realized that just measuring changes in local gross economic activity, such as we do at a national level with GDP, was giving them a rather meaningless number. It doesn't tell you anything about whether your life is getting better or worse. So the people in Seattle chose measures that were truly meaningful to them. They chose to measure things such as: How many farmer's markets are there in the community? How many salmon are in the river? These, in my opinion, are much better indicators of overall quality of life than whether or not the flow of money buying goods and services and bads and nuisances is going up or down.
To have these communities in Southern Colorado, all discussing at a public level: What is it that contributes to a higher quality of life? What is it to become sustainable as an entire county? This is very heartening.
About six years ago, a visionary man named Dr. Richard Gray wrote to me, asking, "Do you think it would worth creating a business school teaching sustainability?" I wrote him back, and said, "How can I help?" In 2003, we enrolled our first class.
That first cohort has now graduated, and we're now enrolling 50 students a semester. Dick's idea, Presidio School of Management, is a reality. The program doesn't just have one tacked-on elective class on the environment or Corporate Social Responsibility, the way most business schools that say they teach this stuff do. Rather, the program integrates sustainability throughout the entire business school curriculum; it offers the whole core business curriculum, from accounting, management, finance, economics, operations, to marketing. But in every one of these classes, the principles of sustainability are core to everything that the students are working on.
It is my belief that this will turn out MBA's that are better equipped to manage any company today, and certainly the companies that will be the winners of tomorrow. Companies facing the sorts of challenges that I spoke about need the sorts of skills we are teaching at Presidio. So will the companies of the future — new start-up companies that are taking advantage of the new technologies, and are innovating — that are preparing to solve the problems that are facing us.
However, it isn't just the traditional aspects of business where we need new thinking. Society needs people trained in sustainability to begin taking leadership positions in all of the sectors of society, from business and government to civil society. We know how to meet basic human needs in ways that are more profitable, and, at the same time, begin to solve the problems that are facing us; we just need more people out there working on it.
How is the teaching going?
I fly out to San Francisco once a month to teach. This semester I'm teaching every single student in the school in one class or another. My email In-box is bloated with student emails, and yet, it is so exciting to see all of these young people grappling with "How do we actually implement this? What's the best way?" I'm dishing out everything that I know, as fast as I can serve it up. It's one of the best ways I can think of to leverage the information that I have. And it is already bearing fruit.
A group of students, as an assignment for one of my classes, gave a presentation on why the Presidio School of Management should join the Chicago Climate Exchange (CCX), (a voluntary carbon cap-and-trade program created by Dr. Richard Sandor in response to the US decision not to ratify the Kyoto Protocol). The students presented a great argument. Afterwards, they asked, "Can we take this to the Board?" Smile. They did. And Presidio School of Management became a member of CCX.
Thus was created DriveNeutral. You, too, can now offset the carbon from your car by going to the website, filling out a simple calculation, paying whatever amount the efficiency or inefficiency of your car determines you now owe. You'll get a little sticker that says, for a year, you've offset the carbon emissions from your car.
This is the kind of entrepreneurial spirit that gives me hope: Richard created CCX, Presidio students created DriveNeutral, and it's being picked up now by churches, government agencies, schools and even companies — all offering their members ways to reduce their individual carbon emissions. So if you are wondering, "What's the one thing I can do today?" Join DriveNeutral.
Another example of what Presidio students have done, involves my work in Afghanistan. When I was last in Kabul, I was in conversation with some American soldiers who are serving on one of the Provisional Reconstruction Teams in the Panjshir Valley. They were looking for ways to assist a village that has no water, but lots of wind. So, with one of my students at the Presidio, we designed a wind-powered water pump. This soldier is now helping a small company in the Panjshir Valley mass produce these wind pumpers.
Do you have any advice for those of us out here out there working to create change, but frustrated by its slow pace?
A student wrote me a few days ago, frustrated that he now understands all of the challenges facing us, but sometimes he just feels like sitting down and crying.
I wrote back to him and said:
For all of you who feel frustrated, fearful for the future, sad, remember this is not a sprint, we are in the marathon of our lives, on behalf of all future life. Of course you feel strong emotions about the challenges facing us, but if this is to be your life's work, you must also learn how to feel joy at the opportunities, at such victories as we are able to achieve, and the companions we meet along the way. We must learn how to pace ourselves, to let the frustration go without becoming cynical, so that we can go on.
When the feelings become overwhelming, try going out into nature, simply spending time in the natural world can give you courage, grounding, renewal, and determination to go on.
Or, do something, anything, to make a tiny bit of difference: Write to a congressperson. Switch out an incandescent bulb with a compact fluorescent. Walk somewhere instead of driving. Help out a friend. Finding balance is every bit as important as learning how to craft a great argument. Without balance you will simply burn out. And small, unsightly cinders do our movement no good at all.
We will not live to see the sustainable world that we are creating. My mentors, Dave Brower and Dana Meadows, did not live to see the tipping point that I now believe we are now beginning to slide down, in which a sustainable world is becoming possible. It's becoming clear that we can indeed capture this world.
I see how much progress we have made just since they have died, and I know that we could not have made it here without the work that they did. So take heart: what you are doing matters, perhaps more than you can know.
Teilhard de Chardin said: 'The future belongs to those who can bring hope to the next generation.' Martin Luther said: 'If I knew the world would end tomorrow, I would plant a tree today.
If all that you can do on a particularly frustrating day, (and believe me, I have many) is plant one small seed, well, you will have done what was needed at that moment.
Thank you so much, Hunter, for taking the time to talk with us.