Harvard Business Review LogoThe Harvard Business Review has consistently tackled the many issues related to business and sustainability, and done it from a more deeply strategic perspective than most others. David A. Lubin and Daniel C. Esty’s recent article on The Sustainability Imperative is a thoughtful–yet somewhat uninspired–approach to the same territory. For those just beginning to think seriously about corporate sustainability, the article provides a good foundational guide. But as someone engaged in a business that’s already embarked on this journey, I find that it fails to take on some of the more difficult challenges involved.

The article begins with a sad but accurate fact: “Most executives know that how they respond to the challenge of sustainability will profoundly affect the competitiveness–and perhaps even the survival–of their organizations. Yet most are flailing around, launching a hodgepodge of initiatives without any overarching vision or plan.”

Lubin and Esty describe sustainability as a “megatrend” (as in the book by John Nesbit), and they validate its importance by noting that environmental issues are now limiting businesses’ capacity to create value for stakeholders and workers–environmental pressures are increasing business’ liabilities; governments are introducing greater levels of new regulation; and the rising power of China and India has intensified competition for natural resources.

Yes, we know that. That’s the business case for change in a nutshell. The real question is what do we do about it, and on this count, the article falls short of articulating a path to genuine sustainability.

One important omission is the crucial issue of externalities, which receives barely a mention–even though business’ general failure to financially account for the true environmental costs of its operations and the real price of its products’ impacts is a root cause of environmental degradation. If the auto and oil industries, for example, were actually responsible for cleaning up the damage their technologies produce and ameliorating the widespread atmospheric and human health effects that result, you can bet we’d be living in a world of zero-emissions transportation today.

Other key pieces of the sustainability puzzle are missing, too. New forms of collaboration, the importance of corporate missions, the primacy of transparency, and many of the other principles that Bill Breen and I articulate in The Responsibility Revolution are entirely left out of the equation, including:

  • Adopting a holistic and systemic approach to sustainability efforts. At Seventh Generation, we use our Global Imperatives to frame our business strategy. This ensures that everything we do on a corporate level is advancing our broader environmental and social agenda (or at least stays out of its way).
  • Driving change from the top down and the bottom up. IBM exemplified this in 2003, when it refused to rely on some top-level cabal to redefine its values and instead invited its entire global workforce to participate in the process via a massive, online brainstorming session.
  • Doing work that matters now matters more than ever. We can see this idea in action at Organic Valley, whose core purpose (to preserve the country’s fading network of family farms) has fully leveraged its employees’ passion and creativity to make the company the nation’s second largest producer of organic dairy products.
  • Learning to function as a community in order to unleash people’s potential. This is a critical element that all too many commentators ignore. Every sustainability imperative must start with a management imperative to create great workplaces that inspire people to give their all.

Unless it fully embraces ideas like these, the business community is doomed to repeat its present widespread sustainability failures. We’ll simply see more of the same anemic, too-little-too-late brand of “corporate responsibility” that has been defined by incremental change where revolutionary transformation is needed; greenwashing and cause marketing that burnish corporate reputations and distract consumers from deeper problems while doing little to fuel meaningful innovation; and companies that strive merely to be “less bad” instead of aiming for “truly good.”

One need only look to the examples of “success” cited by Lubin and Esty to find ample evidence of the deficiencies created by a corporate responsibility movement that has yet to think big, go deep, and get serious. GE’s Ecomagination program may deserve some credit for its $2.5 billion investment in environmentally preferable technologies, but the authors neglect to report on how GE’s undercuts this accomplishment by engaging in clearly irresponsible activities like lobbying against cleaner locomotives and greenhouse gas reductions.

They also mistakenly note that Clorox’s Greenworks line of eco-friendly cleaning products has generated billions of dollars of sales. Clorox can only dream of such success. According to a report in the Orange County Business Journal, during the 12 months through early August of 2009, the brand brought in $36 million in sales — hardly a billion-dollar business.

The article does, however, end on a perceptive and accurate note, one that we at Seventh Generation must work hard to remember,

“Don’t rest on your green laurels. As we have seen in other business megatrends, early leaders are not guaranteed enduring competitive advantage. Continued innovation is required to stay in front of the pack. Thus, even for those who manage a megatrend well and emerge at the top of a transformed market, the premium does not last indefinitely.”

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