The Ecology of Commerce Revised Edition: A Declaration of Sustainability

Preface

Books originate in strange moments and places. This one began in the Waldorf-Astoria ballroom in 1991. A company I founded had been nominated for the Council on Economic Priorities’ Environmental Stewardship Award. Although there were many environmental awards being handed out at that time, some of which were ersatz, CEP’s tough stance on social and environmental responsibility gave the award some weight. The list of initiatives our company had taken was long, and we weren’t surprised to have been nominated, but when George Plimpton announced we’d won, I walked to the podium, looked out at the sea of pearls and black ties, and fell mute. Instead of thanking everyone, I stood there in silence, suddenly realizing that my company did not deserve the award and that no one else did, either.

What we had done was scratch the surface of the problem, taken a few risks, put a fair amount of money where our mouths were, but in the end the impact on the environment was only marginally different than if we had done nothing at all. The recycled toner cartridges, the sustainably harvested woods, the replanted trees, the soy-based inks, and the monetary gifts to nonprofits were all well and good, but basically we were in the junk-mail business, selling products by catalog. All the recycling in the world would not change the fact that doing business today is an energy-intensive endeavor that gulps down resources.

I don’t mean to decry the efforts made by companies to reduce their negative impact on the environment. I applaud them greatly. But it was clear to me in that moment that there was no way to there from here, that all companies were essentially proscribed from becoming ecologically sound, and that awards to institutions that had ventured to the environmental margins only underlined the fact that commerce and sustainability were antithetical by default, not by intention. Management is being told that if it wakes up and genuflects, pronouncing its amendes honorables, substituting biopolymers for polystyrene, we will be on the path to an environmentally sound world. Nothing could be further from the truth. The problem isn’t the half measures but the illusion they foster that subtle course corrections can guide us to a good life that will include a conserved nature and expansive shopping malls. The companies that are changing their ways, reducing pollution, redesigning their products and methods of manufacture, have many different motives. In some cases, they would like to escape regulatory liabilities; some want to change their reputation with consumers; others would like to avoid perceived or future liabilities; and then there are those companies, mostly small, which are trying to fundamentally change the nature of business and move toward socially responsible commerce.

The problems we face are vast and complex, but they come down to this: we are 6.8 billion living together on one planet. The process of fulfilling our wants and needs is stripping the earth of its biotic capacity to produce life; a climactic burst of consumption by a single species is overwhelming the skies, earth, waters, and fauna. Every living system on Earth is in decline. Making matters worse, we are in the middle of a once-in-a-billion-years’ blowout sale of hydrocarbons. They are being combusted into the atmosphere at a rate that will effectively double-glaze the planet in the twenty-first century, with disastrous climatic results predicted by scientists. The cornucopia of resources that are being extracted, mined, and harvested is so poorly distributed that 20 percent of the earth’s people are chronically hungry, while another 20 percent, largely in the North, control and consume nearly 80 percent of the world’s wealth. Since business in its myriad forms is primarily responsible for this plunder, it is appropriate that a growing number of companies ask themselves, how do we conduct business honorably in the latter days of industrialism and the beginning of an ecological age? Companies are coming to realize that they may succeed according to conventional standards and still be violating profoundly important biological systems. The question is, can we create profitable companies that do not destroy, directly or indirectly, the world around them?

Many companies today no longer accept the maxim that the business of business is business. Their new premise is simple: Corporations, because they are the dominant institution on the planet, must squarely address social justice and environmental issues that afflict humankind. Nonprofit organizations such as Business Alliance for Local Living Economies (BALLE) and the U.S. Green Building Council (USGBC) consultants such as SustainAbility, Ltd., and Natural Logic, socially responsible investment companies like Portfolio 21, and thousands of family-owned companies are drawing up a new code of conduct for corporate life that integrates social, ethical, and environmental principles.

To create an enduring society we will need a system of commerce and production where each and every act is inherently sustainable and restorative. Business will need to integrate economic, biologic, and human systems to create a sustainable method of commerce. As hard as we may try to become sustainable on a company-by-company level, we cannot fully succeed until the institutions surrounding commerce are redesigned. Just as every act in an industrial society leads to environmental degradation, regardless of intention, we must design a system where the opposite is true, where doing good is like falling off a log, where the natural, everyday acts of work and life accumulate into a better world as a matter of course, not a matter of conscious altruism. That is what this book tries to imagine.

To transform commerce, we need to define honestly and forthrightly the array of problems we face. Chapters 1–3, 6, and 7 address this. These chapters are not litanies of environmental disasters; they are necessary prefaces to solutions. Although I think the problems we face are more severe than we realize, embedded in each problem is a realizable and crucial design solution. In order to achieve those solutions, we must begin with a set of objectives. I would start with these:

1. Reduce carbon emissions of energy 80 percent by 2030 and total natural resource usage 80 percent by 2050. This is not as difficult as it sounds. In material terms, it amounts to making things last twice as long using half the resources. We already have the technology to do this in every economic sector, including energy.

2. Provide secure, stable, and meaningful employment for people everywhere. The concept that moving toward environmental restoration is economically hazardous is upside down. It is the present take-make-waste system that has over 1 billion people who want a job unemployed. Creating a restored, safe, secure world is the greatest job-creation program there is.

3. Be self-organizing rather than regulated or morally mandated. Humans want to flourish and prosper, and they resist systems that interfere with those deep impulses. Our instinct for survival coupled with our desire to protect our families is at the root of our destructive impulses, and our creative. What kind of political-economic system will harness humanity’s timeless needs and cumulate them into a world that heals the future?

4. Honor market principles. No plan to reverse environmental degradation can be enacted if it requires a wholesale change in the basic dynamics of the market. We have to recognize and respect who we are; this includes a strong instinct to shop the market and buy products of comparable quality at the lowest price. We ask people to pay more to save the planet. They won’t do it in most cases because they can’t. This does not propose unregulated markets. It means getting the true cost of production integrated into market prices so that purchasing choices lead to optimum outcomes.

5. Be more rewarding than our present way of life. We need to invite people into a world that delivers the goods (and goodness), not subtracts them, that intrigues without threatening, a new way of life in which they can participate, enjoy, and create. Present-day limits need to become tomorrow’s opportunities.

6. Restore habitats, ecosystems, and societies to their optimum. The unspoken secret of environmentalism is that there is no such thing as sustainability. Habitats can endure over millennia, but it’s practically impossible to calculate the sustainability of specific fisheries, tracts of land, and actual forests. We passed the point where present planetary resources can be relied on to support the population for the next fifty years. A viable transformation must turn back the resource clock and devote itself to restoring damaged and deteriorating living and social systems. Restoration is far more compelling than the algebra of sustainability.

7. Rely on current income. The accumulated trust fund of worldwide resources is petering out. Human communities need to act like natural ones, living within a natural ebb and flow of energy from the sun and plants. This means redesigning all industrial, residential, and transportation processes so that whatever we use springs easily from the earth (and sun) and gracefully cycles back to it.

8. Be fun and engaging, and strive for an aesthetic outcome. Restoration comes about through the accumulated daily acts of billions of participants. Some think humans are predatory by nature. I cast my vote with those who feel humans take the shape of their culture, and that shifts in culture can occur in rare moments with remarkable speed and vigor. Good design can release humankind from its neurotic acts of destruction, and aim it toward a destiny that is far more enduring. The urge to create beauty and justice is an untapped power, and it exists in all levels of society.

Chapters 4 and 5 and chapters 8 through 10 present specific routes to accomplish these objectives. As you read them, imagine yourself a designer, remaking a world where commerce and environmental restoration are synonymous. What would such a system look like? How would it feel to work in it? What are the obstacles preventing us from doing the right thing? How do we change or remove those barriers?

As you seek your own answers to these questions, keep this critical point in mind: Our human destiny is inextricably linked to the actions of all other living things. Respecting this principle is the fundamental challenge in changing the nature of business

Introduction to the Revised Edition

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When The Ecology of Commerce was published in 1993, it garnered a unique distinction: it was boycotted by every major business publication in the United States. That would not have been remarkable were it not for the fact that my two previous books, The Next Economy and Growing a Business, were reviewed by over 200 publications. Only Michael Pellecchia of the Dallas Morning News reviewed it from a business perspective. Although reviews were written for Forbes, Dun’s, and BusinessWeek, the authors told me that their editors killed the reviews. The snubs were not personal. They were emblematic of the denial that existed in the business world about the environment. In blunt language, The Ecology of Commerce stated that business is destroying the world, no one does it better. Being dismissed was understandable. Despite that, the book became a national bestseller and has never stopped selling.

Then as now, the country was sorting through a banking collapse pervaded by duplicity, fraud, flouting of regulation, and the enrichment of a small elite at the expense of taxpayers. Then as now, the country was denying the extent and magnitude of the environmental problems we face. Nevertheless, the book found its way into the world and became and remains a college text for courses as wide-ranging as business, ethics, economics, and biology. It was translated into fourteen languages. CEOs from France to Japan read it and passed it on to their senior management. In my opinion, the most remarkable reader was Ray Anderson, the founding CEO of Interface, a billion-dollar company that is the global leader in modular carpets. Ray took the book to heart on all levels and used it to draft an environmental message to his staff in 1994. He committed himself to making Interface the leading corporation in the world with respect to sustainability, with the ultimate aim of zero waste, zero carbon, and zero emissions by 2020. He is more than halfway there. In the process he became one of the most articulate spokespersons in the world for sustainability, eventually co-chairing the President’s Council on Sustainable Development under President Clinton. If he had been the only person to read the book, it would have been well worth the effort.

But Ray was not the only person. Rick Fedrizzi was employed at Carrier as director of environmental marketing when he first read the book in 1993. According to Rick, he didn’t know what his job title actually meant until he read The Ecology of Commerce. He left Carrier and now leads one of the largest environmental nongovernmental organization (NGO) in the world, the U.S. Green Building Council, a nonprofit group unlike any that preceded it because it consists almost entirely of people who are engaged in business on a daily basis: architects, planners, interior designers, contractors, developers, and government officials.

Today, every major corporation in the world has to address environmental issues in its reporting and communications, if not its products and services. Green has become a widely, and often misused, term, covering everything from changes in recycled content on packaging to higher-mileage cars. In short, any gesture or movement toward energy or material reduction can be labeled green. Despite the misuse of the term, environmental literacy in corporations has soared. From Walmart to Hewlett-Packard, executives and staff who could not be bothered about the environment seventeen years ago know more today than most activists did in the 1990s. To call it a sea change would be an understatement. While the inertia of commercial systems still overwhelms the marketplace, behind the scenes and in the labs it is a different world. I do not think there is a corporation today that thinks the future will allow business as usual . . . even if they act that way.

In revising the new edition, I tried to bring it up to date without losing its original voice. In reading and rewriting it, though, I could not help but notice how some ideas that were novel in 1993 have now become common sense, at least in progressive business schools. At the same time, there remains a stubborn resistance in business to the very basic tenets of science, including physics, ecology, and biology. Rereading this edition made me want to cheer the changes that have occurred, and at the same I was jumping up and down the commercial sidelines wringing a towel in frustration at the way trade associations and politicians have resisted or, at best, moved with glacial speed toward reform and innovation.

When The Ecology of Commerce came out, two important books had just been published: The End of Nature by Bill McKibben and Earth in the Balance by Al Gore. Both were bestsellers, both dealt head-on with climate change, both were prescient, and both were soon forgotten in policy circles. Yet both books were right on the mark, and much of the business community ignored, denied, or ridiculed these works. Elaborate rationalizations and pseudoscience have been and continue to be trumped up in the Wall Street Journal and trade journals. What McKibben and Gore pointed to then is true today: the mechanism whereby tri-atomic molecules like carbon dioxide or water trap and reradiate heat is not an emotional issue, an interpretive issue, a religious or political issue; it is a matter of science. How business, which uses science relentlessly to pursue product development, can turn a blind eye to the laws of physics is inexplicable unless one accepts that institutions will breathe their own exhaust as long as they think they can profit by it. This intransigency hasn’t changed as much as one would have hoped, but it is more about human nature than it is about commerce—the inability to subordinate short-term monetary gains to the long-term well-being of humanity.

Were I to write a wholly new book today, I would emphasize that sustainability is one of the most certain paths to innovation for companies seeking a competitive edge. Conversely, foot dragging—or fear of environmental literacy and responsibility—smacks of fiduciary irresponsibility on a board level. The changes on the ecological map of the world are now writ large, whether it is oceans, topsoil, climatic volatility, resource shortages, environmental health, or food security. What is different now is that what were considered disparate issues are converging. You cannot address social justice issues without environmental justice. You cannot imagine a prosperous world without a stable climate. You cannot imagine a functioning agricultural system without addressing biological diversity and hydrology. And you cannot imagine a meaningful education for a child without a broad-based understanding of the environment.

Most important, I believe that the concern and emphasis on the environment is no longer a social, business, or ethical issue alone. It is a civilizational issue. Although the planet has a very clear set of operating instructions, we are still fumbling around to find them. It may be that the nature of a global, connected society is that information travels more quickly, but the capacity to act globally on that information is slower. For this reason entrepreneurs are critically important, since it is in business, commerce, and the marketplace where people can rapidly change technologies, habits, and perception. There was no concept of venture philanthropy, social enterprise, or slow money when The Ecology of Commerce was written. Today, business, which has been separate from the world of nonprofits, is mashing itself up into brilliant new forms that discard previous concepts of what a business is and isn’t.

When asked if I am pessimistic or optimistic about the future, my answer is always the same: if you look at the science about what is happening on earth and aren’t pessimistic, you don’t understand data. But if you meet the people who are working to restore this earth and the lives of the poor and you aren’t optimistic, you haven’t got a pulse. What I see everywhere in the world are brilliant, caring people willing to confront despair, power, and incalculable odds in order to restore some semblance of grace, justice, and beauty to this world. The poet Adrienne Rich wrote, So much has been destroyed I have cast my lot with those who, age after age, perversely, with no extraordinary power, reconstitute the world. There could be no better description of what I see in large companies, small companies, micro-lending nonprofits, social venture funds, and more. Humanity is coalescing. It is reconstituting the world, and the action is taking place in schoolrooms, farms, jungles, villages, campuses, refugee camps, deserts, fisheries, and slums, and business in its myriad new forms is there, reimagining the world, trying to bridge the gap from a troubled present to a future that is inclusive, honoring, and just. The alternative is unthinkable. The choices are more than clear. Not only is the living world something to save, but it is also our guide to a livable future.

What do we know about life? In the words of biologist Janine Benyus, life creates the conditions that are conducive to life. I can think of no better motto for a future economy. At this writing, we have tens of thousands of abandoned homes without people and tens of