The European Business Review

By Lloyd Timberlake, WBCSD

What would a world increasingly shaped by sustainable development issues look like? In fact, what would a “sustainable” world look like?

Try to imagine a world of 9+ billion people where all can meet their needs in ways that do not destroy planetary systems. Now try to imagine why a group of business leaders would undertake such a creative imagination exercise over 18
months.

This exercise sums up the Vision 2050 project undertaken by 29 members of the World Business Council for Sustainable Development (WBCSD), a group of some 200 major international companies drawn from more than 35 countries and 20 industrial sectors. The Council also has a global network of some 60 national and regional business councils and regional partners.

It was founded in 1991 to report to the 1992 Earth Summit in Rio, and since then has been engaging with issues such as energy and climate, water, forestry, the cement industry, mobility, and mining. In 2005, the Council changed its strategy from “engaging with” issues to advocating solutions. It divided most of its work into four focus areas: Energy & Climate, Development, Ecosystems, and the Business Role. That latter area deals with knotty issues such as what business can and cannot do, what it should and should not do. (The Vision 2050 project fell under the auspices of the Business Role Focus Area and its director, Per Sandberg, a Swede who studied ethics and engineering at university.)

The WBCSD chose as its new mission: “to provide business leadership as a catalyst for change toward sustainable development, and to support the business license to operate, innovate, and grow in a world increasingly shaped by sustainable development issues.” But, it reasonably asked in early 2008, what would a world increasingly shaped by sustainable development issues look like? In fact, what would a “sustainable” world look like?

To think about the question, much less to answer it, one must define sustainable development. There are hundreds of different slants on this phrase, but the project has used the simple one of “living well within the limits of the planet”.

“The 29 member companies that signed on the Vision 2050 project chose the year 2050 as the target year for achieving a world “on track for sustainability” because any further into the future and the project would become science fiction, and any closer and the goal would seem improbable.”

The project goal was not merely to imagine a roughly sustainable 2050, but to imagine the pathways that would get society to that goal, including the things that companies, governments, and society in general would have to start doing now.

Vision versus scenarios
The WBCSD had great success with its publication in 1997 of a set of “global scenarios 2000-2050” called Exploring Sustainable Development, directed by Ged Davis, who was responsible for much the admired Shell scenario work.

This work offered three contrasting views of the first 50 years of the 21st Century. The one called FROG! (standing for First Raise Our Growth!) posited a world in which environmental and social concerns gave place to an all-out effort to increase economic growth. In a future called “GEOpolity” the world functions fairly well, run by an organization called the Global Ecosystem Organization, but individual governments and companies have little say.

The most popular future was the world of Jazz, in which “diverse players join in ad hoc alliances to solve social and environmental problems in the most pragmatic possible way. The key note of this scenario is dynamic reciprocity – a give and take that is keenly attuned to the opportunities of the moment and, at the same time, alert to ways of incorporating long-term values into strategies for commercial success.”

The Council worked with organizations such as the World Bank to spread these scenarios around to various venues to spark discussions of global ways forward. Since then, WBCSD has also created scenarios on managing water, globally.

Yet the Vision 2050 project was different (despite bringing Ged Davis back as its chief consultant). It was not meant to offer several possibilities, but one coherent vision.

Working out the vision
The project members (chaired by Samuel A. DiPiazza Jr of PricewaterhouseCoopers; Idar Kreutzer of Storebrand; Michael Mack of Syngenta International, and Mohammed A. Zaidi of Alcoa) were represented by staff involved in the strategies of their companies.

The final report is meant to be published in February 2010, and is designed not as a prediction of the future or as a set of policy prescriptions, but rather as a platform for discussions. Management can use it for discussions with employees and with boards. Companies can use it for discussions with governments and civil society. (This article is based on the “work in progress” report presented to the WBCSD Council Meeting of CEO members in October 2009.)

The project worked with a number of experts and groups such as the Alliance for Global Sustainability and the Global Footprint Network. The latter had developed Figure 1 above, which neatly sums up the sustainability challenges.

The chart sums up at a glance the challenge of sustainable development: meeting human needs within the ecological limits of the planet. In countries to the left of the vertical line marking a score of 0.8 on the Human Development Index, people are not sufficiently meeting their needs. In countries above the horizontal dotted line and to the right of the vertical line, people are meeting their needs, but in ways that destroy ecosystems.

In order to move toward a sustainable future the world will need to address all dimensions of this chart – what constitutes success and progress, the bio-capacity available per person, as well as developing solutions to help countries either improve their levels of development or reduce their ecological impact. In Vision 2050 we have identified 5 types of major changes that will be required:

1.Buy into the vision: Accept the constraints and opportunities of a world in which 9 billion people live well and within the limits of the planet
2.Redefine success, progress and the rules of the game
3.Get more out of the planet by increasing bio-productivity
4.Develop solutions to lower the ecologi- cal impact while maintaining quality of life cal impact while maintaining quality of life in countries above the horizontal dotted line
5.Improve levels of human development in countries to the right of the vertical line without increasing their ecological impact

Some examples of what project companies are already doing
Accenture, the global management and IT consulting firm, set up the Accenture Intelligent City Network to bring together utilities and cities with recognized thinkers and leading specialists. This global forum shares information about how the different parties are using technology and new ways of thinking about the environment to manage sustainability challenges. The network accelerates sustainability initiatives by fostering relationships, sharing ideas, and using leading practices.

The North American energy company Duke Energy is developing the smart electricity grid; promoting renewable energy within its generating portfolio; decarbonizing its existing generating assets; and pursuing international cooperation to share information and best practices. Duke has more than 500 MW of wind-powered generation projects in operation, a figure that will rise to more than 700 MW by the end of 2009. The company will build between 100 and 400 electricity-generating mini-solar power plants throughout the state of North Carolina over the next two years in one of the first large-scale initiatives of its kind in the US.

The multinational consumer goods company Procter & Gamble has always argued that products must not only be better for the environment, but also better at what they are supposed to do. One example is its new washing machine laundry detergents that get clothes cleaner in cooler water, saving energy and offering improved performance at the same time.

The agricultural products company Syngenta is developing solutions to provide farmers with the necessary tools to use water more efficiently while growing more, safer, and better quality food. These new technologies improve the water efficiency of plants, reduce the loss of water through inefficient irrigation and explore new ways of multiple water uses.

The Norwegian insurance company Storebrand is pushing for changes in the rules that regulate which types of financial assets they are allowed to invest in. The life insurance sector typically looks to make large investments on the order of 30 to 60 years, but is currently restricted in taking direct stakes in projects such as wind farms, hydropower plants, or new cross-border-transmission lines. Redrafting the Norwegian regulations to enable such investments could match the long-term investment time horizon of the industry and the need for stable returns with society’s need for major investments in sustainability.

Many countries, mainly in Africa, are living within the means of the planet but their people are not meeting their basic needs. Some countries are living beyond planetary carrying capacity while their people are not meeting their needs. In the developed countries, people are well off, but are consuming far more than ecosystems can sustainably provide.

The layout of the figure suggests that rich countries will have to “lower” living standards to get into the sustainability quadrant. However, this is not necessarily true. The United States consumes far more per capita in terms of resources than, say, Switzerland. Yet Switzerland scores higher than the US in most living standards categories.

The main challenge accompanying the “living well within planetary means” challenge is urgency. At the beginning of this decade, unsustainability seemed to most people to be a series of annoyances: some species would perish; there would be water shortages in remote parts of the world; tiny island nations might suffer.

“Within the last five years, we have learned that unsustainability will mean unmitigated disaster for human civilization.”

When it came to changes and solutions, it was possible to imagine ways to double agricultural yields, greatly increase forestry yields, and vastly improve the efficiency of the “through put” of natural resources.

However, we found it harder to imagine a system of global governance – as opposed to a Global Government – that could direct and manage the policy changes needed to get to a nearly sustainable 2050. And what will the market look like when population growth virtually ceases then, in a world in which 85% of the global population live in what we now call the “developing world”?

Risks and possibilities
The project also paid attention to the “big risks” that could knock society off track or severely impede progress toward a sustainable world. The risks combined the traditional – drought, natural disasters, and pandemics – with more emerging threats that we are less familiar with, such as resource wars, the fiscal impact of aging populations and irreversible ecosystem degradation. While risks like these predominantly are for governments to man- age, they also affect, and require significant attention and preparation from, business.

Some risks, such as major natural disasters, may not be preventable, but they can be prepared for; others, such as resource wars, seem more avoidable. With the rapidly evolving nature of risk comes the imperative for developing more sophisticated risk management techniques. Vigilance is more important than ever. Business and society will need to learn to manage what happens, anticipate what could happen, and prepare for the future.

The project also worked with the Global Footprint Network to compare our pathways towards living well within the realities of one planet to a business as usual scenario. Business-as-usual – that is, our present path – would see us using the equivalent of 2.3 earths by 2050. The pathways we suggest would bend the curve down to 1.2 earths by 2050 and in the 2060s to one earth.

Change and Opportunities
Moving toward sustainability will require business to engage much more closely than ever before with both government and civil society organizations to sort out questions such as who defines the incentives and mechanisms, who finances the transition processes (especially the research and development, and transfer of technologies), who will or should be the first mover in various activities, and how to define success criteria.

Our analysis indicates that there is no simple, single path, but rather the need to design, build and transform complex systems (e.g., energy, finance, food, forests, transport and cities) that willin turn provide the foundation for survival and  human development throughout the 21st century and beyond.

The companies that joined the project all said they were doing so to help them understand the complexity, risks, and opportunities of the decades ahead, to position themselves for it, and to communicate it to key stakeholders.

The project’s most important conclusion is the vast business opportunity inherent in a move toward a sustainable world. This finding reveals the myopia of the various business groups around the world fighting against progress on an energy and climate agreement.

There will be opportunities in building the cities in which two-thirds of the human population will live, in helping some people change their lifestyles and others move out of poverty, in retrofitting old and building new infrastructure, and in improving biocapacity and managing ecosystems.

Take cities, for one example. Cities will be developed and built as complex, planned systems – fast, to match the pace of urbanization. Planning of urban infrastructure and neighborhoods will be guided by the need to make the best use of natural heating, cooling, and daylight, as well as ensuring appropriate density and diversity of facilities and services (housing, working, education, recreation, green spaces, wetlands and urban food production). Integrating nature and human behavior into cities will also be a central consideration in planning.

Affordable homes will be developed for people with limited economic means, especially those in the rapidly expanding cities of the emerging and developing world. New funding structures and micro-finance schemes will allow people to own affordable and reliable homes built using sustainable principles and materials. Housing will be adapted to the space and climate of the area, and offer access to safe water, sanitation and energy.

There will be more systematic and systemic approaches to urban design and management to ensure efficiency improvements, space management, food security and smarter energy-efficient building management. Each city will have its own needs based on geography, climate and history of development. Solutions for cities will be tailored to local needs – drawing on experiences and best practice from around the world.

Space in cities and in buildings will be better managed; for example, buildings will do more than provide shelter for part of the day, being used to grow food, collect water and harness energy. Better agricultural and forestry infrastructure and landuse planning will serve fast-growing urban populations while adapting to changing climates at the same time. Smarter mobile urban infrastructure and mobility (for people, services and freight) will be characterized
by the variety of modes available, from safe pedestrian and cycling links to rapid public transport systems. Optimal planning, greater use of information technology, restricted parking and congestion charges will improve traffic flow and reduce journey times and emissions for both personal and freight mobility. Intelligent mobility systems will also smoothly move goods and people in rural areas as well as within, and to and from cities.

Yet these huge business opportunities will not emerge without
• Minimum performance standards for buildings, mobility systems and appliances
• Understanding local environment, conditions, culture, and aspirations
• Local leadership
• Legislation that makes pursuit of sustainable alternatives feasible and desirable
• Designing and implementing complex coalitions (e.g., regional authorities, business, academia and local communities)
• Pervasive urban development planning
• Basing actions on local pricing and incentives
• Rapid dissemination and sharing of ideas and technological innovations

Already a number of member companies are positioning themselves to take advantage of such opportunities.

The opportunities, as does the survival of civilization, require huge changes in the ways in which governments, businesses, and people operate.

Among the big risks the project discussed, the biggest was doing too little too late.

About the Author
Lloyd Timberlake directs the WBCSD’s North America office in Washington DC and participates in the Vision 2050 project.