Management in the Age of the Anthropocene
Professor Jennifer Howard-Grenville reflects on a recent talk by Professor Andrew J. Hoffman, jointly sponsored by the Cambridge Institute for Sustainability Leadership (CISL) and the Cambridge Judge Business School (CJBS)
24 May 2016
The words 'business' and 'sustainability' are increasingly being used together, but what exactly is meant by 'business sustainability' and how does our thinking need to evolve? In his talk on May 10 co-hosted by CISL and CJBS, Andrew J. Hoffman argued for business leaders, academics, and students to update their thinking from a '1.0' to '2.0' version of how business organisations might tackle sustainability issues.
'Business sustainability 2.0' relies less on the '1.0' response of firms innovating their products and processes to reduce environmental and social burdens, and more on them seeing themselves as part of a complex system. In this system, environmental and social impacts are far-reaching, hard to localise to a single firm or even single industry, and are often amplified in unpredictable ways. The necessary shifts in how we manage within such systems will only occur through concerted work across sectors, and with the collaboration of firms, non-profits, and policymakers.
As Andy spoke of the historical changes in how businesses have responded to sustainability issues, drawing on his recently published chapter on the topic, he noted that prior shifts have been triggered by crises that cause a period of foment. The question of how much crisis is enough to trigger a shift towards business sustainability 2.0 is almost certainly unanswerable. But there is no doubt that crises will continue to crop up as the earth’s planetary systems change.
I would argue that the recent devastating wildfire in Fort McMurray, Alberta, Canada, which forced a complete evacuation of the city at the heart of that country’s oil sands operations, is a case in point. The oil sands reserves in the province of Alberta comprise the third largest oil reserves globally (following Venezuela and Saudi Arabia), and their continued development is all but inevitable. However, the very conditions that enabled the wildfire to take hold – drought and much higher than normal temperatures in the boreal forest surrounding Fort McMurray – are the product of climate change, to which fossil fuel use is a major contributor. So, the very process in which oil sands companies are engaged creates, through a complex and long-developing set of impacts, conditions that threaten their operations in fundamentally unpredictable ways. The New York Times reports that wildfires in Northern boreal forests are becoming more widespread in general, suggesting that this is just one of other potential crises. But, how much crisis is enough to trigger business organisations, governments, and others to shift their thinking and actions to Business Sustainability 2.0?
Even absent a crisis, we can begin to rewire how we think about the very notion of sustainability and its implications for business. One powerful message that I find resonates with business organisations and students is drawn from work by John Ehrenfeld, former Executive Director of the International Society for Industrial Ecology and Director of the MIT Program on Technology, Business, and Environment, who asserts that “reducing unsustainability, although critical, will not create sustainability”.
Sustainability involves creating and enabling resilience and flourishing, which may, as Andy pointed out, be measured in myriad ways not tied to traditional economic metrics. Reducing unsustainability tends to lead to piecemeal actions in the name of, say, 10 per cent reductions in waste to landfill. But sustainability resets the frame and invites us to envision an economic and social system in which people flourish within planetary boundaries.
The good news is that a number of companies that work with CISL and CJBS have started to accept this invitation and are working in creative ways to make Business Sustainability 2.0 a reality. CISL’s recently published Rewiring the Economy sets out ten tasks for business, government and finance leaders around the world to tackle collaboratively to create an economy that encourages sustainable business practices and delivers positive outcomes for people and societies. Progress on these ten tasks is already apparent, for example Jaguar Land Rover’s REALCAR project, the Pacific Alliance with 27 countries pledging to work with government to create a supportive environment for green growth, or CISL’s latest work with investors to integrate carbon risk into their investment strategies.
For those of us involved in higher education and the development of the business leaders for the future, we also need to embrace the invitation. The JBS Master's in Social Innovation joins CISL's Master's in Sustainability Leadership as an emerging suite of programmes at Cambridge designed explicitly to inspire and equip leaders of the future to be agents of change within their organisations and wider context for social and environmental impact. In the CJBS MBA programme, a newly designed core module around Business and Society has been introduced into the syllabus, and I look forward to seeing its impact in encouraging students to consider how business might best engage with social and environmental realities.
While none of us can really predict what Business Sustainability 2.0 will look like, Andy Hoffman’s talk was inspiring and timely for those of us looking to be a part of the transition.