September 27, 2012
By Hunter Lovins
Note: Hunter Lovins is a past Wrigley Lecture Series speaker at ASU's Global Institute of Sustainability and was a keynote speaker at the inaugural conference of the Association for the Advancement of Sustainability in Higher Education held at ASU in 2006.
Business is probably the only institution on the planet that is nimble and well-managed enough to respond to the global sustainability crises facing humanity. Such challenges as the impacts of climate change, soaring resource prices, poverty, and loss of biodiversity are threats, but are also opportunities. The businesses that successfully respond will be big winners in the marketplace.
Business sustainability leaders already outperform their less sustainable peers. Over 40 studies from all the major management consulting houses, as well as from academic journals such as Harvard Business Review and MIT Sloan Review, show that the companies that are sustainability leaders have higher and faster growing stock value, better financial results, lower risks, and more engaged workforces than other companies.
Despite all this, we’re losing. The international Convention on Biological Diversity report, Global Biodiversity Outlook 3, highlights a sobering loss of species and habitats among the world’s ecosystems. Threats like the acidification of the oceans could, worst case, end life as we know it on earth. This has happened several times before on our planet with up to 90 percent of species going extinct. Meanwhile, both the International Energy Agency and the Organization for Economic Cooperation and Development warn that unless global leaders implement more sustainable practices immediately we will, perhaps as early as 2017, lock in an unsurvivable amount of global warming.
Next generation sustainability
Universities have an obligation to tip the scales back in humanity’s favor by making sure their graduates are educated about sustainability and its practice. This is what businesses want. The global management consultant, Accenture, has noted that over 93 percent of CEO’s see sustainability as crucial to business success, with 88 percent stating it will be fully embedded into their strategy and operations within 10 years. It’s also what students want. The online career service, MonsterTrak, reports that 92 percent of recent college graduates prefer to work for a company that cares about the environment.
Today’s students need to graduate with solid sustainability skills, not only to help save our environment, but also because this is where tomorrow’s jobs will be. The market for sustainability consulting is growing at 83 percent each year, with expectations to become a nearly $1 billion market by 2013. Corporate social responsibility reporting is also increasing annually, and the new companies issuing their first CSR reports are in need of employees familiar with integrated reporting. The market for energy and carbon accounting grew 400 percent in 2010 and another 300 percent in 2011. Many other companies need new hires versed in sustainability practices to retrain their existing employees. Overall, job candidates with a strong knowledge of sustainability are better positioned to not only fill current job openings, but also help lead their companies into the future.
Closing the educational gap
A 2010 study by McKinsey found that many companies understand the need to implement more sustainable practices, but most don’t have the knowledge to go forward. While most of the executives surveyed considered sustainability important to their future — agreeing that it was “very” or “extremely” important in a wide range of areas — only 30 percent said their companies actively sought opportunities to invest in sustainability or embed it in their business practices. Respondents admitted to a pervasive lack of understanding about what sustainability is and how to implement it. This educational gap, they said, was inhibiting action.
A survey of business respondents conducted by the W.P. Carey School of Business at ASU found that 65 percent of small-company respondents and 87 percent of large-firm respondents said they would consider a sustainability concentration when making a hiring decision, with 97.5 percent of the large-firm executives saying they would value the concentration. Respondents agreed that sustainability-related topics should be taught to all managers and executives.
Even companies that lack a values commitment to sustainability are recognizing that environmentally and socially responsible practices don’t just save them money — they drive employee productivity. American workers are less happy now than at any previous time studied. The Gallop Organization calculates that this is costing American businesses over $300 billion each year. Conversely, companies with an engaged workforce have four times the earnings per share growth rate. Numerous studies show that enabling workers to be a part of implementing sustainability as part of their jobs is one of the best ways to engage them, and increase productivity and worker satisfaction.
Only when a preponderance of companies and communities implement authentic and innovative sustainability practices will many global threats be addressed. It is therefore encouraging that an increasing number of colleges and universities now include sustainability practices as part of their campus management programs and sustainability courses as part of their curriculum. The Association for the Advancement of Sustainability in Higher Education, in its latest review of campus sustainability, reports that 60 percent of all new courses at colleges and universities are now sustainability related.
Are these programs effective and widespread enough to create the next generation of sustainability leaders our world needs? Not yet. But you can help.
Offer sustainability training for your employees. Partner with organizations like ours to bring customized programs to engage your workforce. Join programs such as our Sustainability Leadership and Implementation Certificate now offered through the University of Denver and Bainbridge Graduate Institute. Or work with your local university to create a sustainability training program. Natural Capitalism Solutions has helped establish a variety of such programs and can advise educational institutions in your community.
For more information on Natural Capitalism Solutions and its sustainability program, visit here.
About the author: L. Hunter Lovins is President of Natural Capitalism Solutions and a founder of the new field of sustainable management. Currently teaching at Bainbridge Graduate Institute, Bard College, and the University of Denver, she has consulted for hundreds of industries and governments worldwide, ranging from the Kingdom of Bhutan to most OECD nations. She has consulted for the International Finance Corporation, Royal Dutch Shell, Interface, and Walmart. She was also named Millennium TIME Magazine Hero for the Planet in 2000, and called a “Green Business Icon” by Newsweek Magazine in 2009. Her 13 books include the seminal work Natural Capitalism and its 2012 sequel, The Way Out: Kick-starting Capitalism to Save Our Economic Ass.