This book has shown the deep and varied historical origins of endeavors to create for-profit businesses which were more sustainable and responsible than the prevailing norms. There is no comforting linear or upward trajectory in the story. Rather it is one of a patchy and uneven diffusion of a belief that a greener, more sustainable business was needed, and was achievable. The uncertainties even over the very definition of sustainability and green business have been demonstrated in previous chapters. This is not a reason to dismiss the whole concept, but instead to address its complexity. Sustainability is a path whose ultimate ending cannot be precisely defined. The goal must not simply be for organic carrots or organic wines (or other green products) to capture the global market, but for companies and business systems as a whole to evolve in a sustainable fashion in all activities. The variety of mishaps and wrong paths taken evident here are not signs of failure, but rather represent the costs of discovering a new form of capitalism which addresses, rather than exacerbates, the environmental challenges and scietal inequalities of the world.
The constraints, trade-offs and legitimacy challenges faced by the business leaders who have gone on this journey stand out. The problem was seldom one of identifying the challenge and proposing a solution, but rather of getting the solutions accepted and diffused. Collectively the individuals in this book, often motivated by philosophical and religious beliefs and sometimes by seeing products and services elsewhere which they wanted to emulate, offered alternatives to conventional norms, created new product categories and pioneered new technologies. Shibusawa and Bajaj articulated ideas of stakeholder capitalism and shared value as solutions to the sustainability challenges of their times, yet the concept never became mainstream. It is now the subject of renewed debates among management scholars and others today. Pioneering methods of recycling developed in wealthy cities in Germany in the early twentieth century, but most of the pioneering projects eventually stumbled, only to be picked up by later generations. Even today landfills, rather than recycling and recovery, remain the norm even in affluent countries such as the United States and Britain, let alone in emerging markets. A large parabolic solar energy system was functioning in Egypt by World War I, only for the technology to be put aside for decades. Today the potential for solar to provide energy for the developing world is again being widely discussed.
The challenge in developing more sustainable businesses was that however compelling the entrepreneurial vision, appropriate support from policy makers, and, especially, from individual consumers was necessary to progress far. Yet in waste management, energy, agriculture and other industries, governments were historically more interested in cost than the natural environment, and they were typically captured by conventional incumbents who could invariably provide goods and services cheaper than sustainable challengers because they did not account for environmental and societal externalities. Even as popular concerns about environmental sustainability grew, the willingness to pay a premium for sustainability by individual consumers was limited. As the trend toward buying vacations online emerged with the worldwide web in the 1990s, ecotourism businesses in Costa Rica learned that price rather than environmental sustainability drove consumer choice. Because sustainability involves systems-thinking, a profound and holistic mindset change seemed necessary—the kind envisaged by Rudolf Steiner and Arne Naess, or even reaching back to ancient religious and philosophical traditions such as Jainism and Confucianism.</p>
"Even as popular concerns about environmental sustainability grew, the willingness to pay a premium for sustainability by individual consumers was limited."
Outcomes were varied between countries and categories because contexts varied so much. The prospects of the early solar energy industry were heavily dependent on the prices and availability of fossil fuel. It could only progress against fossil fuels when the latter were scarce, as in rural Denmark or Egypt before 1914, or when experts predicted future scarcities, as with the solar house movement in postwar America. New Zealand organic retailers battled against the context of the country’s green and clean image. The Costa Rican ecotourism industry was able to grow in part because of the context of a country with political stability and an emergent national park system, quite unlike its Central American neighbors. The organic wine market in Sweden could eventually grow in part because there was a state-owned alcohol monopoly which resolved to promote the category.
Mobility and innovation offered paths out of constraints. Like the solar pioneer Frank Shuman, who started in Philadelphia and ended up in Egypt, entrepreneurs could and did move locations. Although the price of fossil fuels was an exogenous constraint for entrepreneurial solar cell businesses, the price differential was reduced by the technological innovations of Elliot Berman, Joseph Lindmeyer and Peter Varadi. Innovation in organic wine-growing could and did greatly reduce the perceived quality gap between organic and conventional wines.
As sustainability is about systems, most progress was made through joint efforts and co-creation. In Germany, the early advances in waste management were the result of the invention of innovative systems combined with municipal legal ordinances that made the new endeavors, such as dust-free collection, profitable. Lobbying by organic farmers and others persuaded the Danish government to create an official label for organic food, which created a virtuous circle of future market growth. Meanwhile pioneering organic farmers and winemakers, ecotourism ventures, and companies such as Patagonia engaged actively with consumers to promote the mindset change which was so important to driving sustainability forward.
The journey to sustainability was challenging to businesses because it involved making choices about which activities should be prioritized and what needed to be left until viable solutions had been found. It has thus proved easier to define responsible and sustainable business by what it was not, rather than what it was. Businesses were faced by many awkward choices: deciding how many sulfites could be used in organic wines before they were not organic, or whether using water repellents in garments was the better choice for sustainability as it might reduce demand for new garments. In some cases, choices tipped over to full-scale greenwashing and the blurring of the whole concept of sustainability. Proponents of sustainable finance were clear that it meant providing an alternative to a conventional financial system which paid little regard to avoiding environmental degradation or helping disadvantaged social and ethnic groups, and which resulted in periodic massive financial crises. There was agreement among exponents that such an alternative finance needed to be more ethical, but not explicitly what ethics entailed or how trade-offs could be handled.
The complexities and trade-offs involved in seeking to make capitalism greener and more sustainable led to the decision of Doug and Kristine McDivitt Tompkins to leave business altogether, and focus on protecting, reforesting and rewilding huge areas of Argentina and Chile. This remarkable episode created, over two decades, a role model which national governments have now emulated, generating a virtuous circle of environmental gains, including saving whole species from extinction. The story signals the potential opportunity for entrepreneurial capabilities and vision to be applied to pursuing sustainability beyond business. Within business, the lesson of history is that making business sustainable is a hard journey with a lot of uncertainties and many variations, but it is a journey that is possible, and it is certainly one that is needed.
Republished with permission of Edward Elgar Publishing Ltd from: Geoffrey Jones (2018), Varieties of Green Business: Industries, Nations and Time, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing Ltd, 252–55.