Reporting from SoCap 2010:
There’s a lot of buzz in the social and environmental sector about the innovative entrepreneurs who are changing the mindset of business as purely profit-driven. But what about the large, established multinationals of the world? Are these companies, with their massive infrastructure and wide reach, really committed to creating a sustainable future? The 200 companies that form the World Business Council for Sustainable Development appear to be. The WBCSD was established in 1992 following the Rio Earth Summit to start a conversation around how businesses can catalyze a change towards sustainable development. Now, a subgroup of 29 companies has created “Vision for 2050,” a map of the strategic milestones that must be met to achieve sustainability by the middle of this century.
The 29 companies involved in this initiative, including Boeing, PricewaterhouseCoopers, P&G, Infosys, among others, started by creating a goal: 9 billion people living well and within the limits of the planet by 2050. Based on this goal they developed a pathway to sustainability broken down into 9 elements: people’s values, human development, economy, agriculture, forests, energy & power, buildings, mobility, and materials. They back-casted the “must-haves” and “must not happens” for each element. These are the major strategic initiatives that must be obtained and the major scenarios that must be avoided decade-by-decade (full details are available on WBCSD’s report).
Speaking at SoCap 2010, Bob Horn of Stanford University described the implications of having developed the vision, which was recently unveiled at the World CEO Forum, and the necessary steps to turn the vision into action. The first major implication is that there is now a first draft of a “standard world tool” for scenario analysis and progress checking that does not require any unachievable scientific breakthroughs. The second is that there is a first draft of the 50 concrete global metrics of success and, more importantly, that 29 major multinational corporations have actually agreed to these metrics. The corporations have publicly adopted the Global Footprint Network concept as a way of thinking about their companies’ and consumers’ impact on sustainability. Finally, there is a call to take action based on these metrics. The WBCSD is asking that its member companies sponsor one of the “must haves” by gathering world business leaders to start the conversation.
Weyerhaeuser is one WBCSD company that is demonstrating how companies can start work on the pathway to sustainability. As a forestry products company, Weyerhaeuser understands the importance of forestry management and protection to achieving a sustainable 2050. They have found that businesses are starting to understand that forests are, in essence, a marketplace not just for sourcing wood products, but for sourcing renewable energy, developing efficient water systems, and learning better industrial design through biomimicry. Weyerhaeuser is working with Alcoa to meet Alcoa’s goal of replacing 30% of the coal used to power steel smelters with biomass. They are purchasing forest land in Brazil to plant for fuel. However, as Bob Ewing of Weyerhaeuser explained at SoCap, Alcoa needs an additional financial incentive to make this initiative attractive. As a result, Weyerhaeuser is helping Alcoa develop additional revenue streams from environmental offsets and new forestry-sourced product lines.
Of course, there are still questions about this vision for a sustainable 2050, many of which were voiced at the SoCap panel. For example, what does “living well” really mean? Does it mean that 9 billion people are living at the same standard of living, and as result the same consumption factor, as Americans are currently living? Does the focus on pure financial incentives open the door for potential abuses? And how can WBCSD ensure that companies are turning their vision into action?
Vale is a second year MBA student at Duke University’s Fuqua School of Business and is interested in how for-profit businesses are finding innovative ways to create social and environmental value and how capital is being driven towards those businesses. Prior to enrolling at Fuqua she was the Deputy Director at Empowerment Group, a non-profit microenterprise development organization based in Philadelphia. This summer she interned with B Lab, auditing certified B corporations and working on the organization’s policy and capital markets initiatives. Vale has a BA in Economics and Political Science from Swarthmore College.