9 – Hart on Sustainability

9 – Hart on Sustainability

Sustainability

This podcast is the first in a series of two shows that will highlight our conversation about sustainability with Cornell Professor Stuart Hart – founder of Cornell’s Center for Sustainable Global Enterprise. In this first segment, Hart provides an overview of the concept of sustainability and in the next segment, he will discuss ideas and strategies related to bottom or base of the pyramid, often called “BOP”.

Transcript

Hart: So it seems to me that what’s interesting about sustainability is the degree to which it can really fuel and drive the entrepreneurial process. It’s a lens through which to look for entrepreneurial opportunities and to create entrepreneurial opportunities.

Kristen: Welcome to “Sound Advice” – the brief audio download that brings the best of eClips to you. I’m Kirsten Barker.

eClips recently had the opportunity to sit down for a conversation with Stuart Hart – a Cornell business school professor and founder of Cornell’s Center for Sustainable Global Enterprise.

This podcast is the first in a series of two shows that will highlight our conversation about sustainability with Hart. In this first segment, Hart provides an overview of the concept of sustainability and in the next segment, he will discuss ideas and strategies related to bottom or base of the pyramid, often called “BOP”.

To begin our discussion, Hart points out the difficulty in pinning down a precise definition of the much-used term “sustainability.” Quoting world-renowned architect and designer, Will McDonough, whose career has focused on designing environmentally sustainable buildings, Hart highlights the problems with the term. He shares why the very word “sustainability” has its issues….

Hart: A lot of people know Bill McDonough. So I think one of the best, somewhat tongue in cheek observations that he’s made about the term sustainable it that it’s probably not a very good term you know, to capture what it is we’re really talking about here. Because it doesn’t come across as very exciting like … so Bill made the point several years ago that what if you saw an old friend, hadn’t seen him in a long time and you’re reminiscing a bit and they ask you, oh so you know, you’re married, you know, they ask, well, how’s your wife, how’s your marriage and your response was, oh it’s sustainable, what would they think. Right. It’s not very exciting. It sort of sends the signal that it’s just about kind of a steady state and a humdrum, right. Nothing could be further from the truth.

Kristen: One of the main misconceptions about sustainability is that students and professionals interested in the area are presumed to be anti-business. Hart feels this is an unfortunate outcome of regulations instituted in the 70s, known as “end of the pipe” policies, in which sustainability concerns became viewed as business costs rather than opportunities.

Hart: Back in the early 70s I think I saw corporations as the enemy and to some degree they probably were ’cause they showed absolutely no inclination to deal with the stuff proactively at that time. So probably they needed the baseball bat in the back of the head in the form of command to control regulation which is what they got and at the end of the day while that was important, I think that somewhat ironically you know, that’s led to future problems. What I mean by that is that it solved … any new initiative solves some problems and creates new ones and unfortunately the new problems created by command to control, end of pipe regulation that just forced companies to clean up at the end of the pipe, it set the tone that all this environmental sustainability social stuff was just going to be added cost, it was going to be an added liability and we spent the last 30 years plus trying to dig out from that. So I think we arrive at a very interesting point now where I think we’re finally beginning to get out from under that mindset. Because it is just a mental model, no one decreed it to be true and it need not be true, so a lot of what I do is about shattering the trade off mythology that you must trade off environmental quality or social equity with economic growth or financial performance that not need be the case at all.

Kristen: So when it comes down to it, what is sustainability? Let’s listen as Stuart Hart shares his thoughts…

Hart: So sustainability, I think again is tribal to some degree. You know, there are many different factions and kind of people that come from different directions that all use the same term. You know you’ve got people that are more the kind of the hard core greenies, you know, that are looking at it through an environmental lens primarily, there are the social justice kind of people that would begin to use that kind of terminology, there’s you know, just the technologist that think about this as essentially you know, a clean tech kind of thing. You know there are those that are really concerned about world development, poverty issues. You know that also use the term sustainability and the problem is that often they don’t talk to each other and sometimes they see each other as being in conflict with one another like sometimes the greenies, you know, and the people that are concerned about poverty issues, see themselves as being in conflict, which is really rather unfortunate, but I think it happens. To make matter worse they sometimes use the same terms to describe what they’re doing. So there’s this real confusion which is I think what muddies the water and what frustrates a lot of people in the business world because when they hear this term and then they see people using the term and meaning completely different things, it becomes frustrating and their first reaction is to say, well, you know, until you can give me a strict definition of what the sustainability thing is all about then I don’t really see how we can address this in the company. And that’s an easy way to just kind of set it aside, right.

Kristen: Despite the fact that the word still may mean many things to many people depending on their background, Hart feels that the one universal truth about sustainability is that it holds opportunity for everyone.

Hart: To me the interesting part about sustainability is it offers up potential to be really creative, ‘cause it introduces new dimensions that previously didn’t get much consideration and if you can figure out how to bring these new issues forward, you know the idea of creating livelihoods for 6.5 billion people in a way that actually moves us toward regeneration of the underlying natural capital, that’s a really interesting problem, right. And it’s by figuring out how do you kind of juggle these apparently irreconcilable conflicts you know, these sort of paradoxes, that’s where creativity comes from.

Kristen: Core to the creative way of looking at opportunities is to go beyond what Hart calls “greening” to a leapfrog approach he describes as “beyond greening”….

Hart: Essentially what you can do is make obsolete old ways of living that have the potential to leapfrog as to more a sustainable world. First approach would be reflective of what I would call greening, which is more about incremental improvement to what already exists. The second approach would be more reflective of what I call beyond greening, which is all about getting to tomorrow’s technologies and serving the markets of tomorrow which you know in large measure includes the other 2/3 of humanity which are currently underserved, badly served or even exploited by the economic process so far in the developing world.

Kristen: While greening seems to cater more to those who are looking to maximize efficiencies within a business, the concept of beyond greening is one that will resonate with entrepreneurs looking to find a completely new way to do business.

Hart: So if we think about greening versus beyond greening. And I think greening is still the dominant approach when people talk about business and sustainability, what first comes to mind are greening strategies, they are the most widespread, the best established not surprisingly. Those kinds of strategies would include things like pollution prevention, eco-efficiency where it now becomes clear that when it comes to company facilities or plant operations that you need not produce a lot of waste, emissions and toxics and so forth in the process of operating profitably. After all those are raw materials that you’ve paid money for, why do you want to pump them out into the environment and get no revenue. You’d rather derive raw materials into products you can sell. That’s called eco-efficiency. That’s a greening kind of approach and even the broader way of thinking about it would be product stewardship, where you think about not just your plant operations, but also the broader life cycle of the whole product system, where the raw materials come from, what are the impacts associated with that upstream and then what happens to the product in use, what are the impacts of the product in use. Beyond greening is really more about tomorrow’s technologies and markets, and when I say that I don’t mean that this is way off in the future. I mean that any company needs to have a portfolio both greening and beyond greening strategies today. Because you are essentially setting the tone in creating the options for the future today, right, you don’t wait. If you wait it’s too late. So beyond greening is all about the competencies, skills, and technologies that you would need for tomorrow. It’s great to incrementally improve and reduce the negative impact of what you do today. But ultimately what you do today will probably be made obsolete.

Kristen: Hart also thinks that both greening and beyond greening feed into the overall concept of sustainability and ultimately drive the entrepreneurial process.

Hart: So it seems to me that what’s interesting about sustainability is the degree to which it can really fuel and drive the entrepreneurial process. It’s a lens through which to look for entrepreneurial opportunities and to create entrepreneurial opportunities. That’s what’s exciting about it. Both in the greening space which is around current products and processes and you know reducing the negative impact of current products and processes but I think even more importantly in the beyond greening space where you think about next generation inherently clean technology and what are the commercialization strategy most appropriate to getting them out there and to me, you know, the most compelling and most interesting angle there is thinking about the other two thirds of humanity, you know the underserved of the world. That’s where the clean tech agenda and the poverty agenda connect.

Kristen: Hart is passionate about connecting those two agendas: poverty and clean tech. And while the path to do so is not clearly defined, for entrepreneurs, this built-in ambiguity allows for the pursuit of incredible opportunities for anyone willing give sustainable enterprise a try.

Hart: So the opportunity exists both for people, individuals but also organizations to put their own unique stamp on what they mean by sustainability. There’s no one pathway and I think that’s one of the exciting things about it. At the end of the day though … the whole area of sustainable enterprise does kind of require you to focus in a pretty substantial way both internally, how do you act as a change agent inside of an existing corporation or as an entrepreneur in the new setting, but then also to understand in a much deeper way what are the external driving forces out there in the world, and understand what’s driving the world you know, what is really going on out there in terms of the broader global environment and the broader social environment of 6 1/2 billion people. You know 4 1/2 billion of which live in poverty.

Kristen: It’s impossible to listen to Hart without feeling convinced sustainability is a noble cause and one we should care about…but he goes a step farther – arguing it is absolutely critical for businesses to take notice and change their actions today.

Hart: And then the other piece, you know the more external piece to the beyond greening strategy is about not just serving existing markets better, but how do we bring the entire human community of 6.5 billion soon to be perhaps 8 or 9 billion, if we’re successful in stabilizing the human population at that level maybe in 20 or 30 years, how do we bring that entire population, the whole human community into what I would think of as the capitalist dream. Because so far let’s face, global capitalism has served the needs only of about 800 million maybe a billion relatively rich people like us. Yeah, there are others that are flocking to the market economy in places like China, and India and elsewhere, this would be Tom Friedman’s flat world, but at best that’s maybe another billion. You’re still talking about 4, 4.5 billion or more people who have been largely bypassed, ignored or even damaged by the process of economic globalization so far and those are mostly rural people or those that are in the process of moving to the city looking for wage employment and living at urban slums and shanty towns. And less capitalism and less companies and less entrepreneurs can figure out how to embrace that other two thirds of humanity and do so in a way that doesn’t destroy the underlying planet… the planet, the ecosystems that support us and it’s difficult to see how we get to a sustainable world.

Kristen: Thanks for listening to this first of 2 segments on sustainability . Tune in to the next part of this series to hear Stuart Hart discuss the concept of the base of the pyramid and why that is critical to understand the importance of sustainability.

If you are interested in hearing additional comments from Stuart Hart or comments from other entrepreneurs on the topic of sustainability, please check our website at eclips.cornell.edu.

That’s E-C-L-I-P-S. cornell.edu.

And remember, if it is a business topic of interest, eClips will bring you “Sound Advice”…


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