There are two key issues that get in the way of planning strategies and processes that will effectively support sustainable business: measurability and greenwash.
Greenwash happens when organisations claim, on the basis of questionable or zero data, that they are achieving green goals. It is paying lip service to sustainability and broader benefits for society and the environment just for public relations or to support the obligatory section in the annual report.
Measurability is the devil in the details. When looking at environmental impacts, there are many variables, a complex web of downstream and upstream consequences and practically unanswerable arguments about how to account for items that don’t have a fixed monetary value – things like the quality of future life or the cost of survival, in either a corporate or literal sense.
The jury is still out on how King III triple bottom line (TBL) recommendations will be implemented. Green advocates will define TBL as “people, planet, profit” – tellingly, in that order. How businesses cope with this remains to be seen, but it is certain that shareholders and the public will no longer be satisfied only with projects to collect wastepaper around the office or change the light bulbs.
Meanwhile, a couple of knowledgeable commentators point out that technology can make a difference. Some even point out that business can provide the leadership that seems absent among political initiatives and discussions.
Questions and answers
“King III points the way towards TBL accounting,” says Richard Worthington of the World Wildlife Fund (WWF) South Africa. “Integrated accounting of all costs and benefits, including full lifecycle social and ecological impacts, will increasingly be used as a measure of responsible investing and be integrated into taxation systems.
“The actual impact of green initiatives is largely contingent on the extent to which the full lifecycle costs of resource use are factored into the commercial value chain,” he says. “We advocate the ‘zero waste’ approach, which seeks to design waste out of systems and to design production chains to be complimentary – by-products of one value chain can be utilised in another.”
The WWF objective is unlikely to become a working reality in the near future, although it offers many advantages if it can be put into practice.
In the short term, people are looking to IT for improvements, even if there are not complete answers.
“IT makes up about two percent of the carbon emissions worldwide, possibly going to four percent over the next decade as massive data centres are put online,” says Warren Johnson, spokesperson on sustainable IT at Microsoft South Africa. “But IT can also help by reducing the needs for travel and improving efficient manufacturing and logistics.
“Green management technologies alone can provide real results. Power management technologies on PCs save around 30 percent of energy utilised. There are some one million PCs in the top 200 companies in South Africa. “That’s a substantial energy saving. The question is whether companies can initiate and manage green projects that achieve real, practical results. The answer is they can. Technology can produce real results.”
While international talks have established a track record of disagreement, delays and limited – if any – progress, the search is on for practical answers that avoid political gridlock by working on a local scale.
Some of these are promising, the recent opening of the world’s largest offshore wind farm in the UK being just one recent example. The UK now has 5GW capacity in wind power, albeit thanks to massive expenditure and favourable government subsidies. Other projects, like South Africa’s huge investment in ‘clean coal’ power stations may be pragmatic or even economically unavoidable but their publicised green credentials are questionable.
“Desulphurisation for power plants uses huge amounts of water and sorbent (limestone) and has an energy penalty, so the carbon footprint per unit of electricity goes up as the local pollution impact is mitigated,” says Worthington. “The extent of such trade-offs renders the technology unsustainable at any significant scale. This is why the notion of ‘clean coal’ is essentially greenwash.”
Unfortunately, trade-offs are practically the basis of political decisions, whether they are made by individual governments or global talk-shops.
The private sector has greater flexibility and a more results-oriented approach. There is the possibility that this can be combined with a broader view that encompasses social and environmental issues. Hopefully, this would address King III TBL recommendations.
It might also offer real achievements, as opposed to the baleful studies and political stasis that have come from the Kyoto, Copenhagen or Cancun climate summits, which typically are described with words like “stalled” or “hopeless”.
Jonathon Hanks is a director of Incite Sustainability and lecturer at the UCT Graduate School of Business on environmental matters. He has commented on whether business can drive climate change action, observing the lack of progress made recently in international negotiations.
Many business leaders overseas support a green approach that combines job creation with sustainable environmental models. This has significant impact locally.
“The language of job creation and economic competitiveness is a language that has obvious appeal to South African policy-makers and business leaders,” says Hanks. “The South African government’s recently released second version of the Industrial Policy Action Plan (Ipap2) – coupled with policy pronouncements from Treasury – suggests that there may be growing appreciation locally of the potential benefits in stimulating investment in a low-carbon economy.
“With Southern Africa particularly vulnerable to the physical impacts of climate change, now is the time for business leaders, trade unionists, environmentalists and policy-makers to be forming unlikely alliances in finding solutions that create jobs, stimulate economic development, reduce our emissions and further build our climate resilience. For these benefits to be fully realised, it will require a shift in the manner in which the climate change debate has been communicated, moving it from the margins into the mainstream of business decision-makers, economists and financial analysts.”
While the political will appears to be lacking and individual private-sector initiatives are inevitably limited in scope, the big picture, from the WWF’s perspective, remains one of the key issues of our times.
“We are dangerously close to a point of no return regarding climate change,” says Worthington. “If we do not initiate low-carbon re-industrialisation with a sense of urgency, we will miss the opportunity. And we are already exceeding the carrying capacity of our planet by about 30 percent.
“Many scientific studies propose that we have a five-year window to rein in carbon emissions to keep global warming in the range of 2°C by the mid-century. Models predict even that will have severe consequences in terms of extreme weather events.
“If the global initiatives fail, we are looking at a 4°C or more increase and the consequences are unquantifiable but expected to be disastrous,” he warns.
We might hope the scientists are wrong. But if they are not, we are looking at costs to people, planet
and profit. Now is the time for businesses to look at the TBL.