value insights

Sustainability Transition Strategies- Valutrics

Sustainable development represents an entirely new paradigm for industry and will require profound changes in processes, outcomes, and perspectives. In particular it will call for new types of interaction and greater interdependence among actors at different levels.

The “sustainability” of a company can only be defined in the light of the behavior of the rest of the system. Sustainability management tools therefore need to take into account the behavior of the system, through use of environmental quality standard (EQS) and indicators, and must catalyze      cooperation between companies to protect shared resources. For example, this could involve an industrial park not only applying the concepts of industrial ecology but drawing up a “communal” environmental management strategy based on local EQS and incorporating global ecological priorities such as global warming, ozone depletion, and acidification.

Sustainability is global in space and time and  is dynamic. Setting out   to “achieve” sustainability is a bit like seeking the elusive state of economic “equilibrium,”.  As modern physics shows, natural systems thrive in a state of chaos, only occasionally, by accident, slipping momentarily into what can be described as order or equilibrium. What these systems achieve is rather many different equilibriums or “sustainabilities”-that vary over time and space and involve the various components of the system in differing ways. Sustainability management systems therefore have to be able to harness an organization’s ability to learn, respond, adapt, and reinvent itself. And they need to be flexible, to cope with constantly changing variables in a dynamic environment.



Some of the characteristics that will be required of a sustainability
management system, along with potential models that we can draw on in
designing a new generation of instruments.
Systemic thinking tells us that sustainability can only be defined for a
complete socioeconomic-environmental system and not for its component
parts. No person, company, or nation can achieve sustainable
development alone, in isolation from others, since their actions can affect our
sustainability just as we can affect theirs. However, it does make sense on
a micro level to speak of individual progress toward sustainabilities. To
measure progress, indicators are required and, critically, a vision of what
is actually being sustained.

Drawing on Table, the core requirements of sustainability management tools are to:
. Improve corporate performance against the triple bottom line (sustain-
. Test compliance and provide feedback for policy and decision making

. Ensure legitimacy in the use of socio environmental space (stakeholder

The aims of sustainability management tools should therefore be to
chart progress toward sustainablity, to achieve full accountability, and to
promote stakeholder governance.
Sustainability instruments should help us address the really challenging
questions, such as how to effect the multiple-level changes necessary
in the way human needs are defined and satisfied and products and
production systems are designed and operated. Most of these changes
involve spacio-temporal dimensions that the current industrial mind is not
accustomed to thinking about. And given the size of the human brain, that
may not be surprising.

Among the quantum shifts that will be a part of sustainability transition strategies:
– Product to Function: A reorientation away from selling quantities of
products to selling quality of services, whereby needs are met through the
diminishing physical transfer of goods and increasing emphasis on functions.
Example: A floor surfacing company that leases recyclable floor
coverings to customers. When the surface is worn, fashion changes, or the
need alters, the floor covering is retrieved, the material recycled, and the
flooring replaced in line with the new requirements.
– Factor O to Factor IO:  An exponential reduction in the energy and raw
material intensity of products and services, with a strong shift in favor of
renewables. Example: Prototypes pioneered by Amory Lovins at the
Rocky Mountain Institute for a “Hypercar,” slashing the amount of mate-
rials and fuel needed to meet the personal transport function.

– Global to Local: A shift away from the unrestricted global production,
trading, and transportation of “mono”-products that can be made to
equivalent standards locally, eliminating significant environmental risks
and impacts and stimulating diversity and local economies.
– North to South: An equitable redistribution of the share of global
resources currently consumed by the industrialized countries, brought
about through technological transfer, capacity building, and fairer trading
arrangements. Example: Joint implementation (JI) initiatives that offset
negative environmental impact in the North and compensate countries in
the South for preserving rainforest resources of global value.
– Present to Future: An opening out of time horizons from focusing
narrowly on today to considering the medium and long-term picture.
Example: Would nuclear fission technologies be considered a viable
energy option if the long-term risks and costs of waste disposal were factored in?
– More to Enough: A recognition that the endless expansion of choice
and the satisfaction of needs through increasing material consumption
have limits that will have to be respected in an ecologically and socially
sustainable world. Example: Do I really need that third car, that latest
piece of software? Can something be fixed rather than thrown away?
– Cost to Value: The shift from narrow assessment of costs and benefits
in financial terms to the inclusion of externalities and intangibles in
calculating the benefit to society of a product, a service, or a course of
action. The issue at stake becomes not merely the price of something but
its value to society. Example: What has been the societal value of the re-
engineering trend in companies?
These trends will be a leading force behind the sustainability transition
Our tools for sustainability should at the very least reflect the ethos
of these trends and facilitate, rather than impede, the necessary shifts.
At the micro level, a management system for a sustainable future
would need to address the full cycle of organizational activities from concept and design to procurement and production, to transportation, through use, disposal, and recycling, and back to concept. It is unlikely that a single management instrument could achieve this. What is required is a framework or system that integrates the various tools, such as EMS or life cycle assessment (LCA), that are already available. Within the company, this management system would be designed to boost performance against the three bottom lines and spur innovation, so that the company becomes its own competitor, reinventing itself before it is threatened with extinction.
Beyond the company boundary, it would be designed to deliver the information needed for sound policy making and facilitate stakeholder engagement in sustainability management.
To be meaningful, though, company management systems need to slot into a comparable macro level sustainability management system. The company is accountable to society through reporting on its progress toward sustainability and demonstrating that its governance is effective.
Maximum transparency at the micro level should produce comparable, user-friendly information for monitoring performance of the system as a whole, checking compliance, giving feedback on policy, identifying emerging problems, and assessing social and environmental impacts.
A further, critical aspect of sustainability management at both micro and macro levels would be to ensure that dialogue and partnership occur with stakeholders on all core sustainability issues, the setting of priorities, the agreement of performance standards, and the monitoring of progress. This stakeholder governance will ensure the legitimacy of the “sustainable” corporation and help build critical social capital.

Sustainability management systems will clearly need to be better integrated and more sophisticated than our existing systems, but does this mean we have to start from scratch? The experience gained with our existing management tools can serve as guidance.

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