Does (or Should) Business Have Social and Environmental Responsibility?

A business colleague has since sent me a paper and a video of a presentation to the Institute of Chartered Accountants of England and Wales by Rob Gray of St. Andrew’s University. Gray argues that what currently passes as ‘sustainability reporting’ is, at best, meaningless rhetoric and, at worst, dangerous greenwashing (dangerous because it gives us a false sense of security that we’re effectively dealing with the problems). There is no correlation between ‘sustainability reporting’ and more socially and environmentally responsible business practices, he shows, and those practices, at any rate, are not even beginning to address the problems our planet and civilization now face.

In essence, Gray is saying:

• Business sustainability and the sustainability of our planet and civilization are, ultimately, connected (if there’s no planet there’s no business), but in the shorter term they are not necessarily correlated and may in fact be inversely correlated (what’s in the best interest of the short-term bottom line of the company may harm society and the planet). By extension, appealing to business to focus on business sustainability may actually make the situation worse.
• We all, including business, have a responsibility to take the drastic steps needed now to try to ensure the sustainability of our planet and civilization. For business to say that this is government’s job, and that they will cooperate with regulations but otherwise be passive in addressing this threat, is an abrogation of that responsibility.

On the first issue, I’m not sure I agree. It may be in the best interests of an oil company, for example, to spend money on greenwashing PR and advertising while its competitors spend money investing in clean technologies. But getting the business to focus on business sustainability can’t make this any worse — the worst corporate criminals are already doing that and will continue to do so. In my experience few people read (or believe) sustainability reports anyway.

There is a concern that governments (usually well-paid by corporatists) may be complicit with greenwashers by encouraging wishy-washy sustainability reporting instead of passing regulations to make business more sustainable. After all, the public has been hoodwinked into believing that ‘free’ trade agreements benefit the majority rather than a corporatist elite (and these agreements are a race to the bottom when it comes to labour and environmental regulation, since it effectively makes such regulation illegal in signatory states). So why not hoodwink us again by selling us on ‘sustainability reports’ instead of ‘sustainability actions’, so the government can essentially do nothing, and allow socially and environmentally irresponsible corporations to do nothing?

I’m not sure there’s anything than can be done to stop or mitigate this from happening anyway — there’s too much of a reward for doing so. Those who want to advance the cause of sustainability need to decide whether to spend their time fighting for honest accounting and reporting, or fighting for real action and regulation. It’s not really a hard choice.

On the second issue, I do agree with Gray. Our whole civilization is unsustainable. We need to drastically lower birth rates to bring human population down to sustainable levels. That can only be done culturally, not politically, and as I’ve said before I don’t think it will happen — it’s just not in our nature.

We also need regulation that makes it prohibitively expensive to pollute and waste, or to consume a disproportionate amount. But more than that we need enforcement of such regulation. Today’s globalized economy encourages polluters, wasters, and conspicuous consumers to exploit countries that either lack regulation or lack enforcement. And even in countries with both, successfully cheating on taxes and other regulations, in today’s cynical anti-government world, is something people actually brag about.

More than that, our entire economy is built on growth in consumption, which translates into greater growth in profits. Without profit growth, the equity markets would (some say will) crash, and our economy will crash with it. If we were to recognize this real white elephant in the room, we’d have to acknowledge that we need both corporations and individuals to reduce their footprint, in many cases drastically, as an absolute precondition to sustainability of our planet and civilization. We need to consume much less, which means we need to produce much less. We need to re-internalize all the externalized costs that, for many corporations, are the difference between today’s extraordinary profits and insolvency. We need to eliminate pollution and waste entirely, not just to start to slow global warming but because no amount of pollution and waste is sustainable. No amount of resource extraction beyond what the planet, over millions of years, slowly replenishes, is sustainable. ‘Sustainable growth’ is an oxymoron.

There are a few companies, like Interface Carpets (full disclosure: I own a few shares in this company), that have come to this realization, and they are beginning to begin to do what would be necessary to become truly sustainable. But they are a tiny part of a massively complicated economy which must somehow all start moving, very quickly and consistently, in that direction. When we have no idea how to do so. When we are rewarded (in fact corporations are chartered) to do the exact opposite.

Therein lies the quandary. To transform our economy would take an unprecedented, herculean, collaborative, and punishing effort by all of us, moving quickly, starting now. The alternative is to throw up our hands and say we’re all fucked anyway, so we might as well enjoy what we have while we have it. There is a terrible temptation to do just that, to embrace the greenwashing and the tepid, inadequate tiny steps towards being a little less grossly irresponsible, a little less unsustainable. To try to convince ourselves that we’re doing our best, and slowly improving. At least until some disaster comes along to force us to do more.

So far, the generations that will follow us, as our planet and our civilization careen over a cliff, are none the wiser. They’ve bought the propaganda we tell them, and tell ourselves. So far.

What will we do, though, when they learn what we’ve done? And what, as we desperately and ludicrously tried to convince ourselves that we were onthe road to sustainability, we failed to do?