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Asking your customers to buy less of your product isn't typically considered a good sales strategy but that is exactly what Patagonia is doing. As the California-based company opens its first flagship store in London's Covent Gardens it has also teamed up with eBay to create the Common Threads Initiative. This campaign aims to encourage customers to buy fewer new things and instead to participate in a dedicated used-clothing marketplace for Patagonia gear.

The company has always been a bit of a maverick when it comes to sustainability. It gives 10% of pre-tax revenue to environmental activist groups and always aimed to make its clothing as eco-friendly as possible. It has also made a promise to its customers to make their products durable in order to ensure that a product can be used for as long as possible. 

According to TIME, the campaign bolsters Patagonia's strong environmental credentials and attracts more customers. Secondly, since there are actively spreading the message to "buy less, buy quality," they are indirectly marketing themselves. Harvard Business Review points out that this could actually justify the high-prices of the merchandise as the customer is paying for quality. Indeed by asking customers to buy less, Patagonia may in fact be boosting sales. Eric Lowett goes on to elaborate that:

Two types of customers could be more inclined to buy new Patagonia apparel as a result of Patagonia’s efforts: customers who make decisions based on sustainability considerations and customers who can now sell their used Patagonia apparel for cash to buy new apparel.

Patagonia also offers a recycling service for its customers for items that are so badly worn out that they cannot be resold. Since 2005, they have taken back 45 tons of clothing and have made 34 tons into new clothes. They have managed to recycle old clothes into new fiber or or fabrics or repurpose what cannot be recycled.

Through both these methods, Patagonia is increasing their brand value by boosting the perceived value of their products. Items are traded second-hand only if there is an after-sale value that is tangible. Most clothing items are so poorly manufactured that second-hand sale is not an option. By creating a marketplace for its own goods via eBay, Patagonia is effectively creating an untapped secondary market for its own products. What is beautiful is that it creates its own self-reviving loop which can also attracts new customers and increase market reach. A Patagonia customer can sell his old apparel online and use that income to buy new Patagonia products. The buyer of second-hand gear may well be a brand new customer that Patagonia has yet to reach.

By: Martin Melaver

Ray Anderson, founder and chairman of Interface, Inc., author of two books on sustainability and a tireless champion for re-inventing business to service the environment, passed away last Monday at the age of 77.

Ray was vice-chairman of my company for eight years, a mentor, a guide, and a dear friend. I write this in the hours leading up to his memorial service, a bittersweet time for so many of us, whose sadness at his passing is mixed with a celebration of a life that helped launch the sustainability movement globally.

For Ray was one of those rare individuals who somehow touched the core of what human-ness is all about – a blend of ambition and selflessness. He would begin most every talk he gave with the statement that he was as driven and as competitive as any businessman you would ever meet. And yet somehow, he would “flip” this all-so-common human trait, one most of his audience identified with, into something filled with a higher purpose: stewardship of planet earth. He was a self-proclaimed plunderer of natural capital, a sinner – but then by implication so weren’t we all? And his hope and undiminished optimism gave us all a clear path toward redemption.

Ray never said a lot at our quarterly board meetings. But when he did, you sat up and took notice. At one of our last board meetings together, several years ago, Ray came up with this pronouncement: “Wouldn’t it be something,” he said, “if as a real estate development company, we would be profitable as a result of what we didn’t build instead of what we did.”

I thought he was crazy. Well, to be more accurate, what I really thought at the time was more along the lines of it sure must be nice to sit back and make these Yoda-like oracular pronouncements. He’s Ray Anderson. Everything he says is wise, right? How in the hell are we supposed to reinvent a real estate company that profits more by building less?

But like a true radical industrialist, Ray was on to something. It’s just taken a lag time of several years for me to figure that out and launch a new business based on his premise.

It’s a document chock full of data on the diminshment of our home, one that we all need to keep close by. But one chart buried in the middle of the report gets to the heart of it all:

WWF Living Planet Report 2010, p. 73

In 2010, the World Wildlife Federation, in conjunction with the Global Footprint Network, published its Living Planet Report.

The chart looks at Human Development around the globe as it relates to consumption. The message is as clear as it is known to many of us already. We in the first world are consuming more and more resources, but not getting much more from that consumption. We're not getting more in the way of longevity, or reasonable healthcare or educational access, or economic well-being or downright happiness. I don’t know if Ray would have expressed it this way, but our consumption has become both a cause and symptom of our increasing lack of community and our lack of connection to one another.

But Ray knew this intuitively. He knew that we needed to better utilize all that we already have, rather than discard and replace with some new thing. He knew that a sustainability movement was not about technology – despite his engineering background – but about people. It was about changing one mind at a time, one mindset at a time, one business at a time, one community at a time, one law at a time. One of his best aphorisms went like this: “Every time a person embraces the environment, that’s one more of us and one less of them.”

I feel blessed to be one of the many thousands whom Ray embraced as one of his own.

Martin Melaver is a principal and founder of Melaver McIntosh, a sustainable development and consulting firm focused on transformative approaches to regenerating communities and businesses. He is the author of Living Above the Store: Building a Business That Creates Value, Inspires Change, and Restores Land and Community, foreword by Ray Anderson.

This post is part of a series on Stakeholder Engagement sponsored by Jurat Software.

Stakeholder Engagement can actually be worth its weight in gold. Prof. Witold Henisz of Wharton Business School has been studying political and social risk management for 15 years, focusing mainly on strategies of avoidance by studying gold mines. Henisz and this colleagues used data from 26 gold mines owned by 19 publicly traded firms between 1993 and 2008. By coding more than 50,000 "stakeholder events" found in media reports they developed an index of the degree of stakeholder cooperation or conflict for these mines.

The term "stakeholders" in this context, says Henisz, includes everyone from local and national politicians and community leaders to priests, war lords, paramilitary groups, NGOs and international bodies like the World Bank. The term "stakeholder event" includes reported actions or expressions of sentiment from these groups that indicate cooperation with the mine owners, as well conflict with them.

The researchers' goal was to figure out what role these stakeholder events played in companies' efforts to maximize profits. As Henisz notes:

"There is a powerful business case to win the hearts and minds of external stakeholders. We found in our research that the value of the relationship with politicians and community members is worth twice as much as the value of the gold that the 26 mines ostensibly control."

Putting a Value on Stakeholder Engagement

But how do you put a value on stakeholder engagement? In order to quantify this, the researchers looked at the firms' listings on the Toronto Stock Exchange, which requires each company to disclose enough data to calculate the net present value of their gold mine(s). The data includes audited information on gold reserves, what it will cost to get the gold out, what a mine's fixed costs are, etc. Based on this information, an estimate of gold value from each mine and market value of the parent company was calculated. Then tracking the actions of media-relevant stakeholders allowed the researchers to study the degree of cooperation and conflict for each mine. Then they came up with a single metric that served as an estimate of these delays and disruptions, improving the fit of the financial market valuation estimation of the 19 publicly traded parent firms.

"By incorporating this metric in a market capitalization analysis that also includes macro-political level constraints on policy change, we reduce the discount placed by financial markets on the net present value of the gold controlled by these 19 firms from 72% down to between 33% and 12%," the authors write in their paper.

This research is important because it finally quantifies what some mining firms have known all along -- that reducing conflict with external stakeholders in favor of winning their cooperation improves the companies' chances that a business plan can proceed on budget and on time, and most importantly, generate sustainable shareholder value.

Wider Implications of the Study

"Our findings are applicable wherever there is a project-based investment that can be delayed or disrupted and where people are worried about water supply, traffic patterns, environmental damage and so forth." Henisz says.

He has  also compiled a list of best practices for businesses that are serious about engaging stakeholders. First, he says, change the mindset of the company so that employees across the board believe that stakeholders are important. Second, get the necessary data to explain who the stakeholders are, what they want and who is connected to whom. Third, find a way to link data to operating performance, integrating the information into risk management systems rather than treating it as a separate category. Fourth, interact with stakeholders in the community in a genuine and fair manner; respond to their concerns and form connections rather than just writing a check. And last, find a way to disseminate information about the ongoing project that is credible and transparent.

Image credit: Unsplash

This post is part of a series on Stakeholder Engagement sponsored by Jurat Software.

When you consider a business like Whole Foods, the connection between customer engagement and sustainability is obvious, because the company has established a firm identity in conservation and related issues -- and when it forgets, alert customers will remind it. The challenge for a more mainstream supermarket like Albertsons is to bring conservation and recycling topics home to a clientele that may be too caught up in the rush of daily life to press for changes. The reward, though, is to reach a large cross-section of the population that may not otherwise cross paths with a well planned, focused sustainability effort. Albertson's has some ambitious zero waste plans for this fiscal year that promise to make corporate social responsibility part and parcel of one of life's most ordinary routines, the trip to the supermarket.

Albertsons, Zero Waste and Food Banks

Albertsons, which is a division of SUPERVALU, already tested the waters of zero waste with two of its Albertsons stores in Santa Barbara. The new plans include adding another 40 more by the time its fiscal year ends in February 2012. Although to SUPERVALU a zero is not necessarily a zero - the stores only have to achieve 90 percent to qualify for "zero waste" - it's still a good goal. Of particular interest is the company's existing engagement with food bank donations in order to reach that goal. SUPERVALU already has a strong track record in that regard, with about 60 million pounds donated through its Fresh Rescue program last year.

Engaging the Unengaged

One glance at an Albertsons weekly flyer is enough to tell you that the customer base is still shopping in pre-conservation mode, but that provides even more value to the company's CSR efforts. Reaching out to new audiences can be, and should be, a primary goal, and that's where companies selling "non-sustainable" products can have the greatest effect. That goes for services and activities, too, especially those in which sustainability would seem to be the last thing on anyone's mind. One great example is the world of auto racing, where California's Infineon Raceway is bringing sustainability concepts to thousands of racing fans. Another example is the U.S. military. Among many other sustainability programs, the Army's Net Zero Vision for military bases is going to impact hundreds of thousands of military personnel, their families, and their communities.

SUPERVALU and CSR

SUPERVALU may have a long way to go in some areas, but its latest CSR report (caution, big file) indicates a key strength, and that is its community partnerships. Aside from the Fresh Rescue program, the two Albertsons partnered with the City of Santa Barbara in a joint organic waste composting program. The report also underscores the profitability potentials for a well planned waste reduction effort, with a combination of recycling revenues and avoided waste disposal costs.

Image Credit: Roadsidepictures/Flickr

The Great Pacific Garbage Patch, aka the Pacific Gyre is roughly the size of Texas and contains about 3.5 million tons of trash, floating between Hawaii and San Francisco. About 80 percent of marine plastic pollution comes from the land. Clean Water Action (CWA) decided to learn more about the sources of trash that end up in the San Francisco Bay Area so the non-profit organization decided to collect samples of street litter from four Bay Area cities (Oakland, Richmond, San Jose, and South San Francisco) from October 2010 through April 2011. CWA collected trash from a few locations in each city.

CWA found that the biggest source (49 percent) of litter is fast food. The five most significant sources were McDonalds, Burger King, Seven Eleven, Starbucks and Wendy's. Up to 31 percent, according to CWA's findings, of the trash collected could be eliminated by reusable alternatives.

"The quantities of trash and plastic pollution in waterways are increasing dramatically. California regulators have been responding to this problem but the result is that the local government is having to spend millions of dollars in controlling trash. This is a short-term solution that doesn't get at the root cause of the problem," said Miriam Gordon, California director of CWA.

Gordon told Fast Company about one simple solution to help reduce trash: napkin dispensers. Gordon said, "We've spoken to restaurant owners who felt that they were spending too much money on napkins. Napkin dispensers make it hard to grab more napkins than you need, so [they] save money, and there are fewer napkins that can become litter."

"Even just asking customers if they need napkins, straws, and utensils before loading up their take-out bags could make a difference," the Fast Company article stated. "Many of the straws found on the street by Clean Water Action were still in their wrappers."

Starbucks sets an example

Starbucks is cited by the article as an example of a company that is trying to reduce its trash pollution. In the company's Global Responsibility Report 2010 it lists the goal of making 100 percent of its cups reusable or recyclable by 2015. With over 17,000 retail sites worldwide, achieving that goal would mean much less trash ending up in garbage cans or on the streets.

In 2008, Starbucks set the goal of developing recycling solutions for its paper and plastic cups by 2012 in order to meet its 2015 goal. "We’re currently on track to meet this goal," the report stated.

Starbucks hosted cup summits in Seattle in May 2009 and Boston in April 2010 where the company met with government officials, raw material suppliers, cup manufacturers, retail and beverage businesses, recyclers, competitors, conservation groups and academic experts. Early last year, it started a pilot program in seven of its Manhattan stores to test the recyclability of its paper cups with old corrugated cardboard. Starbucks expanded the program to 86 of its New York stores later in the year. This year it plans to launch recycling programs "in a number of our store communities."

This post is part of a series on Stakeholder Engagement sponsored by Jurat Software.

Keeping your stakeholders "engaged" is not the only function of stakeholder engagement within the boundaries of CSR. Indeed, engaging your stakeholder is the basis for  good corporate governance and this is often something that companies either ignore or underestimate. In my practice, often I think of stakeholder engagement as a web of connections between all the various components. It helps to get a definite mind-map of the situation and mark out all the important connections between the various stakeholders both upstream and downstream.

Two Tiers of Stakeholder Engagement

Any company, at any given point has to deal with suppliers, distributors, customers and employees - these are the stakeholders that they engage with on a daily basis and are therefore the first tier and most important (always giving allowances for the type of business). The second tier is the wider community, NGOs, labour organizations, governmental institutions, industry organizations and financial bodies. This distinction is important because it allows for a clearer distinction  of how to strategize stakeholder engagement as well as to draw parallels between the two tiers.

In the age of social media there are many ways to engage with your stakeholders, especially with the first tier. This kind of direct dialogue is important for companies because not only are they doing some very essential PR and marketing but it is also needed to take a direct pulse of a company's performance and also how well their products are received.

Employee engagement is one of the key components of first tier engagement in my opinion. Not only are employees the brand ambassadors, they are also customers which gives them a unique perspective into the business model. Having a strong program of employee engagement is essential and many companies are beginning to realize this. Not only are employees attracted to companies with active engagement, but a good system of employee engagement also means that employees continue to work for the company thereby increasing brand loyalty.

When the Tiers Cross-Over

The next most important consideration for stakeholder engagement is an example of how the two tiers can cross over. Consumers and the larger community constitute not only a first and second tier but also a crossover between the two. Community engagement programs not only speak to the larger community and potential consumers but also existing consumers to reinforce brand loyalty. Of course when you put these two examples together there are many levels of interactions between these stakeholder groups - employees are also consumers but are also members of the community at large. In this manner the web of connection grows, programs have to become more sophisticated in order to get a larger 'throw.'

Six Degrees of Separation

One of the things that gets taken for granted is the rule of 'six degrees of separation' - with the advent of social media I reckon the degrees of separation have been reduced even further. Good news travels, but bad news travels faster - this is never more important than when dealing with stakeholder engagement. Erudite communication therefore is one of the best tools for effective engagement. Drawing a fine line between too much information and too little information is a constant dance that companies have to contend with for a successful program of engagement. Apart from this, communicating is such a way that your stakeholders are talking back and you are not just talking at them.

The key to good social engagement is a series of events where first the initial web is established. Then the two tiers are constructed. The third step is designing the connections between the two tiers and expanding the web. Finally, effective communication of initiatives is the glue that holds together the web of stakeholder engagement.

Image credit: Perry Grone/Unsplash

 

Last week at Sustainable Brands ’11 in Monterey, I had a chance to sit down with Eric Ostern, Unilever’s Senior Manager of Corporate Responsibility and Community Relations to learn about some of the progress Unilever has made since the launch of the Unilever Sustainable Living Plan last fall.

3p: What distinguishes the Unilever Sustainable Living Plan from other sustainability efforts?

EO: The Unilever Sustainable Living Plan is really a comprehensive plan that is integrated into our business model and the plan has three core features. The first is that it runs across our entire portfolio including all of our brands and the 170 countries in which we operate. Second is that the plan covers not just the manufacturing facilities, but it also covers the entire lifecycle of our products, from how they’re sourced and manufactured, all the way through consumer use and disposal. And the third thing that makes the plan unique is that it’s not just about the environment. We find is that there are a lot of plans that focus on the environmental impacts associated with one’s manufacturing facilities but this plan has a social and economic component as well.

3p: The plan was launched in the fall of 2010 and it’s now June of 2011. Can you speak to any progress thus far?

EO: When we launched the plan, we said that we had an ambitious plan. We had set some ambitious targets and we had three big goals: the first which was to help over one billion people take action to improve their health and well-being; second, to halve the environmental impact associated with our products; and third was to source 100% of our agricultural raw material sustainably. … Sustainable agriculture has been something we’ve been doing now for over fifteen years. Recently we announced that we just bought the first available certificates for sustainable soy. Soy makes up approximately 1% of our agricultural raw materials. Unilever is a significant purchaser of agricultural raw materials. We buy about 7.5 million tons of agricultural materials on an annual basis. … This complements some of the work that we’re doing in terms of moving ahead and moving the needle forward on other crops that we purchase, like Lipton and our commitment to buy 100% of our teas sustainably sourced by 2020.

In addition what’s new with our plan is that we’ve also been starting to engage with consumers differently. One of the areas in that space is around water and water consumption. We know from some of our research that the average American woman spends about 10-12 minutes in the shower and yet at the same time, the majority of our greenhouse gases from our water and skin business are generated from consumer use of our products. And so we’re looking at – and this is a critical part: how do we create behavior change among consumers?

Suave, one of our leading hair care brands and presently in over 50million homes, has now launched a new initiative called “Turn off the Tap” and they’re talking to consumers right on pack – where consumers are using the product – on the benefits of reducing their hot water usage in the shower. And the critical thing here with Suave is that a lot of consumers are aware that greenhouse gases are bad for the environment but they’re not motivated by talking to them about “Hey, you should reduce your shower usage because it’s about greenhouse gases.” We’re talking to consumers in a very relevant and real way for them and the way that we’re doing that is talking to them about how they can save money. So we’re putting out facts to consumers. For example, “Did you know that the average family can save about $100 on their utility bill and about 3,200 gallons of water?” We’re actually talking to the consumer in a way that is meaningful to her and that’s driving a critical benefit for her, as well.

One of our commitments was that we wanted to increase recycling and recovery rates because one of our goals in halving the environmental footprint of our products is to halve the amount of waste associated with our products. Dove and Suave have formed a partnership with Recyclebank and it really is designed to engage the consumers in rewarding them for taking small everyday actions to recycle plastic bottles and waste. This is about how consumers want to do the right thing but they don’t always know how – nor do they have the resources to do it. So the partnership with Recyclebank is designed to help educate consumers, provide them with information, empower them, and at the same time reward them so ultimately it’s a win for the consumer because she’s getting valuable rewards from Recyclebank and it’s a win for the environment because they’re increasing recycling rates.

From an energy perspective, Unilever Canada has signed an agreement with Bullfrog Power. We will now be the largest purchaser of renewable energy in Canada and we will be purchasing renewable energy for our manufacturing facilities as well as our two offices there, which will cover about 90% of the energy Unilever purchases, which is a sizable commitment. Based on our partnership with Bullfrog Power, Bullfrog even created a new category for their partners because we are the largest purchaser.

--

I also asked Mr. Ostern about whether Unilever had considered converting some of its liquid products to powder to reduce water use, packaging materials and GHG emissions associated with transport but he was unable to answer my question. He also declined to provide details regarding what kind of materials Unilever is considering for their refill sachets, which fall under the company’s efforts to increase reuse of packaging. We look forward to hearing about these issues as more info becomes available.

***

Ali Hart is a sustainable communications and engagement strategist with a passion for life’s essentials: food, water and storytelling. Her background in the Entertainment industry, penchant for humor and MBA in Sustainable Management from Presidio Graduate School are Ali’s secret weapons in her quest to master the art of behavior change and to make sustainability inconveniently fun.

Pennies from heaven don’t mean very much anymore, especially considering their costs to the environment and the expense of mining and minting them. With apologies to Abe Lincoln, Mike’s Bikes, a company with nine locations in California, has taken a solid stand against continued use of the venerable coin.

The company recently announced it is “letting go of Lincoln” by banning pennies in its stories. Its website explained, “The world we live in is the world we ride in. To help take good care of it, we have decided to eliminate pennies from our stores. For all cash transactions where pennies would have been used, we will be rounding down in favor of the customer to the nearest nickel.”

The are some very solid reasons for bidding the penny adieu, as the store explains: “Making pennies wastes natural resources and is toxic to people and the environment - Pennies are 3 percent copper, and 97 percent zinc and are primarily made from virgin ore.

Making pennies from zinc and copper means mining for those materials. Red Dog Mine, which is the largest zinc mine in the U.S. is by far the #1 polluter on the EPA's list, because of large quantities of heavy-metal and lead rich mining tailings. The process of refining both metals can release sulfur dioxide (SO2), lead and zinc into the environment. “Making pennies wastes taxpayer money - As of 2010, it cost 1.79 cents to make each 1 cent coin, meaning that taxpayers lost 0.79 of a cent for each of the 4 billion pennies the Mint produced that year; which represents a $32 million loss in 2010.

“Rounding down won't raise prices - At Mike’s Bikes, all transactions will be rounded in favor of the customer, so they will essentially function like a 1-4 cent discount on all cash transactions. Economists also have proved that eliminating the penny won't affect prices; we believe that the savings to the environment and the economy will more than compensate for the risk of any possible jump in prices. “Pennies waste time and money - The average American wastes 12 hours a year handling pennies.

The National Association of Convenience Stores and Wallgreens estimate that handling pennies adds 2 to 2.5 seconds per cash transaction. By eliminating pennies, Mike's Bikes will save over $5K a year; rounding up to the customer's benefit allows us to share this saving with our customers. “Pennies are worth less than CA minimum wage - pennies are so worthless now that it doesn't even pay the California Minimum Wage of $8/hour to pick them up off the street.”

So much for the lucky penny theory. Retailers and other money handlers with a sustainable mind-set should heed and a follow the Mike’s Bikes lead. Sorry Abe, a “penny for your thoughts,” as the saying goes, no longer has any worthwhile meaning and the penny itself has long outlived its usefulness. No disrespect but you also grace the five-dollar bill, a slightly more valuable currency. Pennies are an expensive and environmentally wasteful nuisance. So let the nickel, featuring Thomas Jefferson’s features, become the new penny. It will be better for the environment and good for business.

Image credit: Unsplash

The bluefin tuna is one of the world’s most endangered fish. Weighing up to 1000 pounds, the fish are majestic, sport incredible torpedo shaped bodies, and socialize in enormous schools--which also makes them vulnerable to large-scale fishing operations.

The evidence suggests that bluefin stocks around the globe have fallen sharply the past 40 years. Tuna of any species is prized by restauranteurs and commercial fishing companies--so much so in fact that environmental groups have called for a total ban on bluefin tuna fishing so that their stocks can recover. Just one female bluefin tuna can produce 20 to 30 million eggs at her peak maturity.

So to eat or not eat bluefin tuna? As with any fish, consumers should consider deferring to the Monterey Bay Aquarium’s Seafood Watch guide: a quick search suggests that shoppers avoid either farmed or wild-caught bluefin tuna.

The U.S. National Oceanic and Atmospheric Administration (NOAA), however, recently refused to grant the Atlantic bluefin tuna “endangered” status. 

Politics, not science, are behind that decision, as several senators have made it clear through their actions that they do not want to face unhappy fisherman with another election year on the horizon. Forget semantics and read what NOAA has to say--it should give you pause no matter what a government-imposed status may infer.

So what are the choices? Aquaculture is one option, but the long term efficacy and sustainability of farming tuna are still unknown. Fish farming may have a role in the decline of overfished species in Australia, but the record of salmon and tilapia farms around the world score dubious results. Clean Seas, an Australian fish farming company, believes it is a couple years away from finding commercial success with farming bluefin tuna. Many advocates of sustainable fishing cry foul at companies taking fish out of the wild and have them breed in fish farms. One argument is that juvenile tuna should be given the chance to mature in the wild--but currently no commercial method for breeding Atlantic bluefin tuna exists.

When it comes to the Atlantic bluefin tuna, one company, Umami Sustainable Seafood, believes it has a solution. The San Diego-based company argues that its cultivation of the Atlantic bluefin is a more sustainable option for sustainable fishing than what is occurring out in the wild, especially when accounting for the overfishing in the Mediterranean and Atlantic.

Whatever your take is, fish farming may well be the way of the future. Purists and environmentalists may despise the idea, but if overfishing is not curtailed, farmed fish may be the way of the future. And if aquaculture techniques for breeding bluefin tuna can be perfected by companies like Clean Seas--and then successfully applied to the Atlantic bluefin--therein lies an argument that we may be giving the Atlantic bluefin tuna more of a chance.

Like many sustainability choices, there is no clear answer. The Monterey Bay Seafood Watch is the most respected arbiter of what seafood to eat and avoid. Regardless, the savvy investor may want to purchase some Umami Sustainable Seafood stock.  One trend is clear--with the demand for bluefin tuna hardly abating, this will be a stock to add to your portfolio.

Image credit: Kindel Media via Pexels

 

This post is part of a blogging series by economics students at the Presidio Graduate School's MBA program. You can follow along here.

By Allan Enemark

Can economic growth be sustainably achieved? The short answer appears to be no. At least, not in our economy's current incarnation. But this question has already been percolating for nearly two decades and its multi-trillion dollar answer indeed requires a great deal of debate.

If economic growth is defined by its current measure, an annual increase in gross domestic product, and sustainability is defined broadly as an ability to continue a process indefinitely, perpetual growth seems theoretically possible. But something is missing.

Daly and Townsend's Valuing the Earth: Economics, Ecology, Ethics, describes economies as contained within the global ecosystem and therefore limited by finite resources of that system. No amount of technological breakthrough or creative accounting can counter that physical fact. With a world population nearly at 7 billion people, reaching the earth's resource limit is inevitable if it is not already occurring. Daly and Townsend present a solution to this boundary constraint with the concept of a "steady state economy."

Essentially, given stability in population, renewable and equitable distribution of resources, and a limited use of energy, this steady state society could maintain a high standard of living indefinitely. While reevaluating the dogma of perpetual growth is commendable, the real world feasibility of this vision is dubious.

Enacting such dramatic change through a highly centralized governing structure that dictates appropriate resource use, population levels, and actively redistributes wealth is a hard sell even in dire times. Many critics, such as those at the Mackinac Center for Public Policy in this article, point out that a steady state economy is unnecessary, since world population appears to be stabilizing. Hans Rosling’s has some vivid illustrations of this trend on his site Gapminder.

As countries develop and education increases, their birthrates drop. With growing affluence, the cultivation of efficient technologies develop to reduce pollution and waste. In essence, sustainability will naturally result out of growth. Although the trends in developing countries are promising, this polar opposite to Daly and Townsend's view is unrealistically optimistic. Most likely a solution lies somewhere in the middle ground between these two arguments.

Perpetual economic growth as currently measured cannot be maintained, and basing an entire global economy on this assumption creates massive risk when reaching the limits of our natural systems. But effective, lasting change only comes from within. In that sense, changing our society’s behaviors cannot be achieved through some overseeing organization. Nor can we assume that the status quo will hold in a changing environment.

Economies are human creations, and as the expression goes, you get what you measure. So perhaps instead of asking if growth is sustainable, thereby valuing it, we should really be asking what the benefits of growth are and how best to achieve those directly, perpetually.  

Allan Enemark is an Industrial Designer and currently an MBA candidate at the Presidio Graduate School

Image credit: Mathieu Stern/Unsplash