Predicting the future – who takes responsibility?

The headline refers to an article in The Economist`s June 11th edition regarding the Three Gorges dam project in China. The dam has always been controversial as it has a destructive impact on the environment with draughts and resettlement of 1.4 million people. But who is responsible in the long run? According to Mr. Mao, an economist, nobody is taking real responsibility if there are any problems in the future.

That rises the question on how short term perspectives can reach long-term goals. Decisions on carrying out big projects like the Three Gorges in China or, for example, the nuclear phase-out in Germany are made by the present government, hopefully with the help of experts in the field. In industrial countries these decisions are often based on a strong domestic opinion before elections, like the debate on the nuclear phase-out that came up shortly after the tsunami in Japan. Usually a government period lasts for four years whereas its decisions sometimes affect an entire generation or even the regional climate.

The question is how decision-making can involve greater responsibility than just fulfilling short-term goals (winning the election). Today more long-term words like sustainability and green technology have already become buzzwords so in the future it will be more important, I think, to concentrate on the process in becoming sustainable or green or renewable. This allows a more sophistic, process-oriented approach and gives tangible results.

Let me give an example. Wind energy is supposed to be clean. The process of building new wind energy stations includes the change and recycling of wings. But one might have forgotten that still today it is unknown how to recycle these huge steel wings. So wind energy is clean but maybe not sustainable in the long run.
By the way, energy from the damming up of floods and rivers is clean, too. Can Three Gorges be considered as a sustainable project anyway? No, because the process included resettlement and climate change – only two of many consequences that, according to Mr. Mao, no one will be responsible for in the long term. Future technologies and decisions do require responsibility and risk management during the entire process.

Sustainable business outlook

The last two weeks I have spent many hours on conferences listening to some great speeches on how to implement sustainability in business. First out was a conference called Sustainable Business Outlook where Nordic companies presented their best practices.
Most of them focused on green business like recycling and the energy savings of green buildings or new products but some speeches even covered the social aspect of sustainability. SCA, a global hygiene and paper company, for example invested money in educating 5000 nurses in China on how to handle incontinence and break taboos on this disease. The company also sells small packages of hygiene products in developing countries to enable people with low income to buy them – an approach in sharp contrast to the European and American concept with its big packages lasting for several weeks in favor of reduced transportation costs for consumers.

Sustainability can be accomplished in many ways and it is extremely important to embed it throughout organizations to drive efficiencies, cost savings and differentiation in markets through innovation. So after showing some best practices from the industry it was Accenture`s turn to present a global study on how to transform sustainability into value creation for stakeholders.
The most challenging part of the equation is how to accomplish a high Human Development Index and a low Ecological footprint or to put it this way: how can the product of number of people, GDP per person and the use of resources be minimized? Accenture conducted a survey among 50 CEOs and over 50 C-level executives called Vision 2050 and asked three questions: 1. What does a sustainable world look like? 2. How can we realize it? 3. What roles can business play to ensure more rapid progress towards this world? The complete report can be found on Accenture`s homepage. I just want to name a few results: implement sustainability in all areas of your business from strategy, branding, marketing and business development to operations and governance. Accomplish resource efficiency and take control over true costs like carbon and water. Put incentives on sustainable innovations and understand the role of mobile telecommunication in the growing markets like Africa, Latin America and Asia. Current value can be created by innovation and productivity gains whereas future value can be created by building tangible assets like marketing/branding and by good risk management. According to 44% of the CEOs it will take 5-10 years to embed sustainability into core business. This is pretty soon.

One group who already has incorporated sustainability is the wide range of social entrepreneurs. This is what my second conference was about called “The social entrepreneur as a transformer of the society”. Community Interest companies are, according to Wikipedia, companies who are designed for social enterprises that want to use their profits for the public good. Today many small businesses are started to change behaviors in society by hacking existing structures (for example Grameen bank) compared to former times where different social initiatives were started, for example Greenpeace or WWF. The conference provided a first glance on how social enterprises could be started and how social work could be conducted. One of the challenges that these social entrepreneurs faced was how to combine sustainability and profitability. One entrepreneur pointed out that a high form of transparency helped to overcome this gap.
By the way, in the mid of June Stockholm will be the host of the ICSB-conference titled “Back to the Future – changes in perspective of global entrepreneurship and innovation” with a long list of distinguished speakers and interesting sessions like Creative Environments, Globalization and its impact on Entrepreneurship, Sustainable Entrepreneurship and Innovation (www.icsb2011.org).