Monday, 6 September 2010

Sustainable Business

I am writing a book on corporate governance, due for publication in spring 2011 (thanks for asking), and my research is bringing me across references to 'sustainability' everywhere.... and it drives me up the wall. I have no idea what the term means; which is mostly because the people who write it have no idea what they mean. Whilst it is fun to look up on the internet the handful of businesses that have been around for a thousand years or more, few businesses last more than a few decades, even the most successful. That is inherent in the whole capitalist model of the corporation. They merge, change their activities, change their names, change their ownership, go bust. Businesses themselves are not sustainable.

Of course most of these references mean conducting business in a manner that is more environmentally friendly. This is a relative idea - not environmentally friendly just more so than the alternatives. And, because that is a bit of a mouthful, the phrase is shortened to 'sustainable business'; which is ok. I recycle at home. I put food waste and cardboard on the compost heap; cans and bottles in the blue bin for the council to collect: I suspect they just put these in landfill but I still go to the trouble of separating out those bottles and cans.

And let us be clear, the second law of thermodynamics tells us that the universe is not sustainable. It is gradually winding down. But ok, I accept that is happening over billions of years and life is short. But oil and mining companies are fundamentally in businesses that are not sustainable, whatever it may say in their annual reports about sustainability. They are using up scarce resources that cannot be replaced and will eventually run out. When they are gone we will have to think of a plan B. And it is not obvious or simple to decide whether this is wrong. Many rare earth metals, for example, are used in high tech products today but are running out too. There is no certainty that new deposits will be found. It is not just a matter of digging deeper into the planet: they only exist near the surface. Should we conserve them for future generations or should we use them now and leave it to our descendents to invent new technologies that make use of materials that are available then? Why not just have as much fun as we can now? If a benefit can be had now or in two hundred years it is not obvious that we should leave it for that future generation. With the spread of nuclear weapons, those future generations may not even exist. Bear in mind that few species have lasted on this planet for more than a couple of million years - that seems about par for the course - so we are unlikely to be here forever. Also bear in mind that the extraordinary technological advances of the nineteenth and  twentieth centuries have been powered, literally, by the completely unsustainable use of fossil fuels. Without using these up at a prodigious rate, our standard of living and quality of living would be very different, we would still live in a limited and largely agrarian society. It would still take months to cross continents and few people would do it; the electronic revolution would probably not have happened.

What about other businesses, perhaps ones that claim to be carbon neutral because they plant trees. Well, it is all just so much nonsense. It is whistling in the wind. If the UK saved carbon dioxide, for example, by stopping all motor transport then the benefit to the world would be less than the offsetting detriment of a single year's growth in China. So a sense of perspective is good. None of which argues against sensible conservation policies, energy efficiency, reductions in pollution but, however good these things are they also have a price - a world that is 'sustainable' for a bit longer is a trade-off with more poverty, ignorance and disease.

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