What is a sustainable business anyway?
Once you penetrate some of the sustainability hype the key question at board level is this: what action are you actually prepared to take? For a problem like climate change, where there is no regulatory hurdle and action is voluntary though enlightened by self interest, what action is enough?
In my aviation days we foreswore the idea of a sustainable business but, rather, envisioned a sustainable society made up of a balanced bunch of over and under polluters. Admittedly, a convenient argument for an industry with real constraints and few viable alternatives. This is the reality of macro level emissions trading systems; they allow actors in the economy to find a natural equilibrium by setting the upper limit and allowing a market for pollution permits to evolve. Air travel, it seems, might just be the luxury society affords itself and instead turns to other actors to deliver the goods on CO2 performance.
15 years on are we seeing the same fundamental arguments played out again, this time in the tech sector? Is green efficient software code and low energy data centres really where its at? It probably is if the real motive is if energy cost reduction is the real goal but is this really the biggest opportunity to save the planet? This is a question as fundamental as Ted Levitt and the marketing myopia problem: do we want a sustainable business or a sustainable planet?
This question came rushing back at me after watching this extraordinray video from last week's Aspen Environment Forum. In this clip, Auden Schendler of the Aspen Ski Company, arguably a business on the front line of the global climate change problem, makes a forthright case that recycling ski passes or even eliminating CO2 from his business is a complete waste of time.
People focus on what they can understand. ........... That is a distraction it's not just that it doesn't matter, it's actively bad. When you focus on recycling this ski pass you're missing the big picture. ............ Well, everything we do on the ground is irrelevant. You could take the entire emissions from the ski industry, eliminate and we would still go out of business in one hundred years.
The most important thing we ever did was file an amicus brief to the Supreme Court on Massachusetts versus EPA asking them to regulate CO2 as a pollutant.
Where this gets interesting is when Elizabeth Lowery of GM backs up Auden's words completely and decries the distraction of internal GM people who come up with the dreaded environment 'idea of the month'. But Auden shot back and challenged that GM was likely to give in to similar ill informed demands when they come from customers rather than employees. At this point we learn that GM apparently executes a 'combination' of well intentioned but ill advised customer demands together with initiatives that actually contribute towards solving the problem.
In a stunning admission Lowery said:
.....certainly we have had to do some projects that maybe were not totally aligned with solving that problem because you have to do something today to keep customers happy
GM are doing some great stuff on the environment - no criticism there - but this is an important illustration of the dilemmas we face in addressing climate change with market instruments. But is Aspen Ski Company going way outside the boundaries of its core mission by filing Supreme Court briefs on a skirmish between a state and the US federal government? Is GM failing to do the right thing for the planet by compromising the efficacy of its climate initiative in deference to ill informed customer demands and thereby maximise profits. These are diametrically opposite approaches. GM it seems will accept incremental if flawed progress whilst Aspen Ski Company will sacrifice action for idealism. Which approach delivers more for the planet?