Business and Sustainability — Can they coexist in peace?

Enzo Payonga
Apr 17, 2018 · 13 min read
Philippines’ main financial hub is surrounded by trees as it is filled with skyscrapers.

The coexistence of business and sustainability has always been contested by many sectors in society. In this article, which is based on a talk I delivered in a conference-workshop entitled “GOAL DIGGER: Bridging Environmental Policies and Industrial Innovation” organized by the Practice of Administrative Leadership and Service of the National College of Public Administration and Governance (PALS-NCPAG) and the De La Salle University Arts College Government (DLSU-ACG), I will elaborate on this complex and sensitive topic based on a collection of industry experience, articles I read, and personal opinion.

I remind everyone to please keep an open mind. I am not here to insist on my views nor to dismiss or promote any ideology.

The controversial Facebook post.

There’s this viral Facebook post from the Ateneo Environmental Science Society (AESS) that became a sensation last March. Essentially, the organization featured a student who is having some second thoughts on the idea that “capitalism is evil”. The post has since sparked a wildfire of comments mostly of frustration about the student’s thoughts, and some even bordering ridicule. This is quite evident in most of the reactions it gathered on Facebook: “Haha”.

This worries me a lot, since, as a student, I am giving him the benefit of the doubt that he is still in the journey of discovery. Despite my dominant inclinations towards certain ideologies, I still believe that nobody has the monopoly of the “right” thing. And at the end of the day, even if his stand on the interplay of business and environment may not yet be well-formed and still probably be infused with flaws, I believe he has a point, and certainly does not deserve the ridicule he got.

The outrage the post has garnered was sufficient to induce the student organization to issue a two-page statement on the matter, and Kabataan Partylist to write an elaborate explanation on why “greed can never be green” in response to the student’s thoughts.

Statements from Kabataan Partylist-Katipunan and the AESS.

Nonetheless, what I appreciated about this recent incident is how issues like this stir conversation presenting various perspectives, although I think some were too rabid and unforgiving.

To put it all together, the mob’s contention was: Capitalism is evil.

What appalls me is the prevailing state of mind that you always have to choose between two sides: usually, the good and the evil. If you think capitalism is not evil, then you are in a way inherently naive, if not equally evil.

I am not here to deny that capitalism — usually through corporations — has indeed practised environmentally questionable and hazardous methods in their trade, involved lots of undue exploitation and irresponsible use of natural resources, and widened the gap between the rich and the poor, perpetuating and even worsening inequality in society. Indeed, this system is far from being perfect. But I would like to assert that it is definitely not hopeless.

Much like the different political systems peoples have tried in the history of mankind — monarchy, oligarchy, dictatorship, democracy — I have come to the contention that capitalism, like democracy, is by far the system that “works”. Both of these two systems have lots of flaws, vulnerabilities, and inherent weaknesses; but we cannot deny that these systems together have pushed societies to greater heights and groundbreaking accomplishments that we all benefit from to this day. We have also witnessed that societies who took 180-degree turns due to dissatisfaction (which I believe is valid) from the prevailing political and economic systems have ended up in havoc. While some quarters argue that democracy and capitalism must stop, these same concerned citizens would often end up disagreeing among themselves on what would be the most suitable alternative to these existing systems. Worse, it tends to finish on a vacuum and an evident lack of direction.

Indeed, there is a desperate longing for change in line with the people’s understandable impatience about the long-overdue gains promised by our forefathers. However, I suggest that instead of completely overhauling these idealistic systems, we may want to work on them as a people to weed out the wrongs, plug the holes, and take most advantage of the desirable attributes.

With this, I would like to offer my stand that business and sustainability can — and MUST — coexist.

Essential to sustainability

In fact, this is well in-line with the elements of sustainable development put forward by John Elkington in 1994 and widely (albeit with some criticism) accepted by many organizations worldwide. These are: Environment, Society, and Economy; otherwise known as the 3P’s Triple Bottom Line (TBL) of Planet, People, and Profit. To put it succinctly, no initiative, campaign, or venture is expected to succeed and prove to be sustainable without taking into consideration the preservation and development of the environment, promotion of society’s well-being, and sufficient profit to keep the companies running and growing. This affirms the conviction that if something does not make business sense, it is not sustainable.

Elements of Sustainable Development / Triple Bottom Line

We have to accept the reality that among those three, the quest for profit is the most aggressive to the extent of being driven by greed; and the planet is the most passive as it can literally do nothing to counteract the effects of greed and irresponsibility (although it can show its might through climate change and all the destruction it can bring). In the same tenor, we also have to acknowledge that it is money from the profits that has the potential to encourage people to drive and sustain the change we want to see in this world.

Research and development, innovation, infrastructure, social services, and many more essential elements for progress in sustainability are funded directly and indirectly (often through taxes) by profits brought by sound business models. In the same way, the tools we use in our daily lives, and even in our campaign against indiscriminate use of resources are brought to us and are constantly being improved by the very same “evil” we despise. Think about your kitchen utensils, laptops, smartphones, paper and other stationery, the building you live in, and even the unseen energy that powers up the essential tools of our trade.

I have to emphasize that businesses aren’t there solely for making money. We have to remember that these entities, from startups to large corporations, exist because they respond to a particular demand. If there was no need to begin with or a problem to solve at the outset, they would have faded easily in time. But no — it is us, consumers, that brought these companies to where they are today. It is us who gave them the mandate to answer our need in exchange of our commissions to compensate for their hard work. It is us who, in the greater scheme of things, have pushed them to challenge the boundaries of the environment (no matter how unsettling), to satisfy our incessant needs and wants. Looking through this lens, I hope you also realize that we as a people share a collective culpability and responsibility for the same environmental issues we feel so passionately about.

Shared responsibility

Having put forth the notion that among the three P’s, the quest for profit is the most aggressive but likewise has the highest potential to turn things around, what then could be the ingredients that can curb the greedy tendencies of business, mitigate their negative impacts, and encourage them to be a force of good?

Firstly, there should be sound, reasonable, and binding environmental policies, which must be strictly enforced by governments. At the end of the day, if the government is unrelenting in its environmental principles, businesses would have no choice but to follow suit. However, the onus is on the policy-makers and government to make companies understand the importance of these policies to society, and how they will still translate to positive business sense.

Secondly, technology and innovation must be able to catch up with the ever-increasing demands for sustainable alternatives to existing and outdated technologies. The challenge for scientists, innovators, and researchers is not only to come up with revolutionary propositions and inventions, but more importantly to make them reasonable and financially attractive options — which takes me to the third point, that is…

Environmental policy and the new state of technology must ensure equivalent or even superior benefit to business. This will make it easier for companies to adopt them without sacrificing profitability and operational capability. Let me give you an example.

At least a decade ago, global adoption of renewables was very slow. According to a report by the International Renewable Energy Agency (IRENA), renewable energy will be consistently cheaper than fossil fuels by 2020. Solar photovoltaic (PV) electricity cost has, in fact, plummeted by 73% since 2010. With these developments, it is quite evident that corporations have already jumped into the “clean” energy trend. The motivation that they want to be environment-friendly may still be questionable, but what is clear is that now, renewables are seen to be reasonable alternatives to fossil fuels seen from both the technical and the financial aspects!

It may be a bitter pill to take, but most businesses’ priorities revolve around constantly increasing profits and decreasing losses. Anything good external to the organization that happens as a consequence (e.g. increased human satisfaction due to better salaries, lesser carbon footprint as a result of supply chain optimization) is often secondary. I know that most of us will cringe at the thought that environment takes the backseat for many corporations, but I’d rather benefit from the high-impact side-effects than having none at all or worse, the opposite.

At the end of the day, we have a shared responsibility in making sure that our environment is protected and will continue to thrive. We must also acknowledge the reality that businesses’ thirst for profit is a monster we need to contain but not totally restrain. It may be easier said than done, but the government, being the custodian of the people’s power, must not be beholden to the vested interests of the business sector, nor should they be seen as a threat to having good business. Putting fool-proof systems in place and holding non-negotiables sacrosanct will actually evoke a sense of stability, which is an attractive attribute for business. The moment government shows cracks in its integrity, exhibits double standards and openness to bend rules, the monster will inevitably break loose.

Moreover, for those in the fields of science, engineering, technology, and innovation — which includes myself — it is incumbent upon us to continue searching for alternatives which will have equivalent or superior attributes compared to existing technologies. We also need to ensure that these alternatives are both technically and financially feasible, and will be resilient enough to stand the test of time until full market adoption.

To put it simply, the only way for us to “contain the monster” is to present our propositions in a simple and sensible manner. Things need to make sense. Why do we shift to solar/wind? Because you generate the same energy at the same or cheaper cost than fossil fuels! Makes sense; approved! Why can’t we construct a factory near this river? Any potential leak will affect water quality, which is detrimental to the health of the community, which approves your business permits. Makes sense; okay, let’s talk about proper zoning.

I may be oversimplifying here, but I hope you get the point. Nobody deserves a singular blame, as we live in a real and complicated world. Despicable things that happen out of businesses’ indiscriminate deeds are an aggregation of our collective failure as a society. Who gives business permits and enforce regulation? The people in power. Who grants the people in power the authority to issue permits and implement regulation? Us. Who has better ideas? Maybe that undergrad who just submitted her thesis? Has it been supported by the university or any organization for commercialization? Maybe not.

All of us, no matter how far removed, have a role to play in this entire system we belong to. We may not all belong to the powers-that-be, but nothing can stop us from being vigilant and to call out the wrongs and excesses committed by either or both the business sector and government.

As an engineering student, I cannot forget how my Environmental Management professor shattered my idea of environmental preservation when she said that in complex issues like the environment, the scientific solution may not always be the best one. As someone who thought that among everything, science prevails to be the best option to take, the thought of having multiple perspectives on the table as ingredients for problem-solving was truly perplexing as it was exciting. We’ve heard it said that for relationships to work, parties must be willing to level-off their pride and come up with a reasonable compromise. The environment, being a shared resource among all humans, is built upon the strength of the relationship among its stakeholders — or to see it through a Christian lens, stewards.

While I hate to quote cartoon characters, Pocahontas’ assertion that ‘we are all connected to each other, in a circle, in a hoop that never ends,’ rings so true if we take a step back and see how, despite our minute existence in the grand scheme of things, our actions, inactions, and mere existence affects someone and something else in the universe.

The resounding Pocahontas quote. (Image from the Internet)

To synthesize my elaborations above, I think, the three elements that will drive sustainability initiatives are: People, Power, and Money. We people need to act together as a community with a common concern for the planet. Those in power must institute policies and reforms to promote a thriving environment and prevent any vested interest from prevailing. The money that is generated by a booming economy must be invested to operational, resource, and energy efficiency initiatives; and research, development, and innovation in search of more sustainable alternatives.

Going green makes business sense

True enough, businesses are seeing the sense of going “green”. Maybe, just like in the movies, some monsters when tamed can become our trusty avatars. A recent Financial Times article cited that in 2016, 190 of the Fortune 500 companies were able to save close to 3.7 billion dollars through their collective renewable energy and energy efficiency initiatives. It further mentioned that a new study found that going for sustainable, low-carbon business models can unleash 12 trillion dollars in business savings and revenue by 2030. Blackrock, a known global investment management company lately backed a shareholder resolution forcing oil giant Exxon Mobil to be transparent on its exposure to climate risks. The Guardian reported that the Rockefeller family charity — whose patriarch, John Rockefeller, made his fortune from oil — called out ExxonMobil, the world’s largest oil company, as “morally reprehensible” deserving their withdrawal of their investments therein. Columbia University’s Center on Sustainable Investment asserted that while divestment from fossil fuel investments cannot replace government action on climate, it is an important step towards a clean energy future, and has the potential to spur regulatory action. It is upon us, who are mostly represented by institutions, to press for a just and sustainable future.

You may say these are not enough, and may not be sufficient to reverse the damage done by generations of unacceptable business and environmental practices, but I think we can agree that we are off to a good direction. Companies, with the support and encouragement of various government and non-government organizations, are doing something. Electrical utilities and governments worldwide start adopting the concept of a “smart grid”, where energy production and consumption are made more efficient by optimizing the energy mix and minimizing energy transmission costs. Manufacturers are aggressively adopting the idea of a “smart supply chain” which aims to minimize operational, production, and transportation costs by cutting down on redundant processes, bottlenecks, and inefficient product routes, with the help of technologies such as Internet of Things (IoT) and RFID tagging. In the same way, factories embrace the practice of “smart industries” which relies on the implementation of supervisory control and data acquisition (SCADA) systems full of sensors and actuators to automate processes and reduce inefficiencies. Companies have become open to the implementation of energy management in their facilities to lessen energy consumption by installing metering equipment and monitoring systems, control and automation systems, and aligning them with operational behavior and financial considerations. Corporations start having environment and sustainability teams that work with government and non-government agencies to minimize environmental impact of their operations. Some startups and businesses also explore the fields of life cycle thinking and circular economy to minimize, if not eliminate waste by-products of production.

I must say as well, that technology is indeed catching up. IoT, data science, and artificial intelligence, fields that are quite niche in the past decade have recently made revolutionary advances and solutions to sustainability issues. Even the much sought-after Blockchain technology is touted as a disruptor in the energy industry. It is seen to make power plants’ utilization more efficient and reduce intermediation among energy transactions.

As you can see, trends almost always point to optimization and increasing efficiency. It is not a drastic overhaul of the entire system, but rather a drive to build on and improve existing systems. Come to think of it, efficiency indeed means better savings for business, but what we care for here is that environmental impacts are continually being lessened. We are at the crossroads, which hopefully will transition to a more sustainable future.

Hope and balance

With all that’s been said and done, let me encourage everyone to tackle sustainability issues with a hopeful disposition — hope that unites rather than divides, hope that moves forward rather than pulls back. I cannot emphasize enough how we all have a stake in our common planet, which dictates our common future. Perspectives matter, we just need to — no matter how hard — find balance.

Enzo Payonga

Written by

Finding balance amidst the chaos.

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