Is Sustainability Scalable?
Is it possible for a business to 'do no harm' and still thrive?
Is “sustainability” scalable? Or is this an unachievable oxymoron that torments conscious leaders and environmentally-mission driven brands?
This was a topic of conversation at last week's WE ARE THE BOARD meeting when a room full of forward-thinking, heart-centered C-suite execs considered what it really takes to start and scale a sustainable business.
What does sustainability even mean?
In the world of “clean” beauty and wellness, there’s a lexicon that we’ve come to use and accept. It distinguishes one’s business model, brand, and even one’s leadership style as separate from “conventional” beauty and wellness. Language like “clean”, “sustainable”, “ethical”, “transparent”, “conscious”, and “mindful” is woven into the manifestoes and mission statements of many well-intentioned companies. And having worked within this space for over two decades, I believe that for a vast majority of leaders, their intentions are sincere. No one is cool with the idea that their business practices might be making things worse (degradation). Most say they want to do no harm (sustainability) as a business. And many say they are here to do good (restore).
Yet, we know that even when the intention is there, ‘business life’ isn’t set up to support life itself.
"Most environmental impact takes place during manufacturing processes that have largely been outsourced to contractors in off-shore, low-cost production hubs," says Sarah Kent in her Business of Fashion article.
Operational oversight at outsourced, off-shore manufacturing plants is rare, so the working conditions and amount of waste produced is unmeasured and unknown. This holds true for ingredient suppliers, packaging suppliers, and printing facilities. Even for the most disruptive, game-changing companies (Beautycounter, Everlane, Another Tomorrow come to mind), they focus on specific aspects of sustainability, like clean ingredient legislation, supply chain transparency, and ethical material sourcing. While incredibly noble, difficult and important, these pioneering companies still have blindspots and make compromises within their ‘sustainable’ business model. As of yet, no company has reimagined the entire supply chain, from seed to end of lifecycle, and introduced a 100% zero-waste, carbon-neutral business model that does no harm, leaves no trace, and sustains life at every stage.
What sustainability is not
It’s not green-washing
It’s not virtue-signaling
It’s not window-dressing (like highlighting one sustainable initiative in an otherwise completely unsustainable company)
It’s not an ingredient “no” list
It’s not unsubstantiated claims (i.e. “zero-impact'“)
It’s not performative philanthropy (like using virgin plastic in your components, and then aligning with a nonprofit that removes plastic from the ocean with every purchase.)
It’s not just one thing. To be truly sustainable, environmental and social impact must be considered at every stage in a product’s lifecycle and in a company’s internal operation.
Where do we go from here?
If we know that creating new creates waste, how do we reconcile our human instinct for creativity, innovation and ambition with the environmental realities we face? And what needs to be in place to start and scale a truly sustainable (or better yet, regenerative) business?
A few thoughts come to my mind:
We Need More Conscious Leaders.
Someone recently said that sustainability is an inside job, and I couldn’t agree more. We cannot expect to see companies that foster cultures of sustainability without conscious leadership at the helm. And while “conscious” is another buzzword that has lost some of its meaning in this era of greenwashing and virtue signaling, when individuals do the inner work to cultivate greater empathy and awareness around our interconnectedness to nature, a shift in consciousness can occur. I would argue this is the missing piece in our current climate crisis.
We need more Impact Investors.
Another contributing factor that impedes sustainability is money, or the lack thereof. Financing a sustainable operation isn’t cheap. Quality materials, ethical working conditions, and renewable energy cost more. Minimum order quantities on sustainably soured ingredients are high. R&D in biotech is expensive. Impact-first investors get this. They are focused on solving social and environmental problems and are prepared to accept below-market returns or longer time horizons. As Bruce Usher says in his brilliant book Investing In The Era Of Climate Change,
"An impact first strategy is not a better way to invest, but it might be a better way to solve climate change."
We need Policy Change.
It's absolutely necessary for corporations, governments and nations to invest in policy change and offer incentives to inspire decarbonization efforts at every stage in a product's lifecycle. "Competition" is the native language for most companies and governments, so the goal is to create a 'healthy competition' of climate action.
We need a Paradigm Shift.
It's (past) time for a reality check. The rapid growth model and short time horizon that defines the VC model perpetuates the "growth at all costs" mindset that is destructive to internal culture and to the environment. We need to normalize steady, sustainable growth, slower trend cycles and longer timelines for returns.
“We’re trying to let business as usual solve a problem that was created by business as usual.” said Dr. Vidhura Ralapanawe, head of sustainability and innovation Epic Group.
Will it be enough? One thing is certain: "The cost of inaction will be far higher than any investments required today."