Tag Archives: #environment

‘Just Sustainabilities’ in a World of Global Value Chains

By Stefano Ponte.

What if we used our size and resources to make this country and this earth an even better place for all of us: customers, Associates, our children, and generations unborn? What if the very things that many people criticize us for—our size and reach—became a trusted friend? 

Excerpt from ‘Leadership in the 21st Century’, speech by Lee Scott, then CEO of Walmart, Bentonville, Arkansas, 24 October 2005 (as in Humes 2011: 102)

Whenever we engage in consumption or production patterns which take more than we need, we are engaging in violence.

Vandana Shiva, Earth Democracy: Justice, Sustainability, and Peace (2016: 102)

A New Era

Human activity is having major impact on the earth and its biosphere, to the point that geologists have now defined a new era – the Anthropocene – to reflect this phenomenon. For some, this is a period that started in the late 18th century with a marked increase in fossil fuel use, and that has accelerated dramatically since the middle of the 19th century. During this time, human action has overshadowed nature’s work in influencing the ecology of the Earth. Global sustainability crises, such as climate change, the acidification of oceans, and the ‘sixth great extinction’ of planetary life characterize this period of great turbulence in the relation between humanity and nature.

Others question the focus on humanity as an undifferentiated whole in the term ‘Anthropocene’, and propose a different term to explain the same result: Capitalocene, ‘the era of capitalism as a world-ecology of power, capital and nature’ (Moore 2016: 6). This term shifts focus away from the putative duality of human-nature relations and towards capitalism as a way of organizing nature. From a Capitalocene perspective, major changes in the world-ecology started taking place already in the mid-15th century – with a progressive transition from control of land as a way to appropriate surplus value, to control of land as a way of increasing labour productivity for commodity production. In other words, it is not enough to simply examine what capitalism does to nature and how humanity can solve global sustainability challenges through innovation in technology and business models. We need to conceptualize power, value and nature as thinkable only in relation to each other.

Sustainability Management

In addition to cost, flexibility and speed, sustainability management has become another key element of contemporary capitalism. The practices that corporations enact to address sustainability issues are also (re)shaping the existing spatial, organizational and technological fixes that are needed to ensure continuous capital accumulation.  Geographically, production is moving to locations that can meet basic sustainability specifications in large volumes and at low cost; organizationally, multi-stakeholder initiatives on sustainability have come to play a key role in global value chain (GVC) functioning; labour conditions among suppliers are under pressure from the need to meet increasing environmental sustainability demands from lead firms; and the need to verify sustainability compliance has led to the adoption of new technologies of measurement, verification, and trust.

The ‘business case’ for sustainability has been by and large solved – lead firms do not only extract sustainability value from suppliers, but also benefit from internal cost savings, supplier squeezing, reputation enhancement and improved market capitalization. As the value of goods increasingly depends on their intangible properties (including those related to sustainability) than on their functional or economic value, sustainability management becomes a central function of corporate strategy – filtering through organization, marketing, operations and logistics. Lead firms in GVCs are leveraging sustainability to extract more information from suppliers, strengthen power relations to their advantage, and find new venues of value creation and capture.

The business of sustainability is not sufficient as a global solution to pressing climate change and other environmental problems. It is doing enough for corporations seeking to acquire legitimacy and governance authority. This legitimacy is further enhanced through partnerships with governments and civil society groups. Some of this engagement is used strategically to provide ‘soft’ solutions to sustainability concerns and to avoid more stringent regulation. While the business of sustainability is leading to some environmental improvements in some places, and better use of resources in relative terms in some industries, the overall pressure on global resources is increasing. The unit-level environmental impact of production, processing, trade and retail is improving. But constantly growing consumption, both in the global North and in the global South, means that in the aggregate environmental sustainability suffers.

What To Do

Public actors at all jurisdictional levels need to put in place orchestration strategies that improve the actual achievement of sustainability goals, and activists and civil society groups should identify and leverage pressure to strengthen the effectiveness of orchestration. But these strategies have to be informed by the realities of the daily practices, power relations and governance structures of a world economy that is organized in global value chains. Orchestration is more likely to succeed when a combination of directive and facilitative instruments is used; when sustainability issues have high visibility in a global value chains; when the interests of private and public sectors are aligned, and when orchestrators are aware of the kinds of power that underpin the governance of value chains and act to reshape these power configurations accordingly.

A path towards ‘just sustainabilities’ means addressing inequality – since it drives competitive consumption and leads to lower levels of trust in societies, which makes public action more difficult; it entails focusing on improving quality of life and wellbeing, rather than growth; it demands a community economy and more public consumption; it involves meeting the needs of both current and future generations and at the same time reimagining these ‘needs’; it demands a paradigm of ‘sufficiency’, rather than maximization of consumption; it recognizes that overconsumption and environmental degradation impacts on many people’s right to enjoy a decent quality of life; and it requires a different kind of ‘green entrepreneurial state’, which also caters to these needs. Just sustainabilities necessitate building a social foundation for an inclusive and stable economic system that operates within our environmental planetary boundaries; and it demands business to behave responsibly (within its organizational boundaries and along value chains) to maintain its social license to operate.

This text is based on excerpts of Stefano Ponte’s forthcoming book Green Capital, Brown Environments: Business and Sustainability in a World of Global Value Chains, Zed Books: London. The book is based on 20 years of research on sustainability and global value chains, and builds from empirical work on several agro-food value chains (wine, coffee, biofuels) and capital-intensive industries (shipping and aviation).

Stefano Ponte is Professor of International Political Economy in the Department of Business and Politics, Copenhagen Business School and the former academic co-director of the Sustainability Platform at CBS. Twitter: @AfricaBusPol


Selected books for further reading on this topic:

Agyeman, J. 2013. Introducing just sustainabilities: Policy, planning, and practice. Zed Books.

Dauvergne, P. 2016. Environmentalism of the Rich. MIT Press.

Humes, E. 2011. Force of nature: The unlikely story of Wal-Mart’s green revolution. HarperBusiness New York.

Jackson, T. 2009. Prosperity without growth: Economics for a finite planet. Routledge.

Moore, J. 2016. Anthropocene or Capitalocene? Nature, history, and the crisis of capitalism. PM Press.

Shiva, V. 2016. Earth democracy: Justice, sustainability and peace. Zed Books.

 

Pic by Marufish, Flickr.

Role Reversal: When Business Safeguards the Public Good

By Erin Leitheiser.

Earlier this week Patagonia launched what may be corporate America’s most forceful action yet against the government’s assaults on the environment and vulnerable communities: announcing that it would sue the Trump administration.  Such action signals a new era for business leadership on social and sustainability issues.

No Government-as-usual and no Business-as-usual
More than a year ago – and before the 2017 U.S. election – I wrote about Trump, anti-intellectualism and the new role for business.  While the takeaway then was that business was increasingly expected to step up contributions to solving social and sustainability issues, the new reality of a Trump administration necessitates yet another re-evaluation of business’s role in society.  No longer is it simply enough for companies to contribute to the broader public good via philanthropy or (more) sustainable business practices; such approaches assume a stable and accepted regulatory environment facilitated by the government.  We now live in a time when Americans are facing a hostile government that is pushing through major changes to the tax code which would benefit the wealthiest at the expense of the poorest, rolling back protections for women to access reproductive healthcare, and reneging on the country’s commitments and obligations to do its fair share to stymy carbon emissions, among countless others.  This is not government-as-usual, so it can no longer be business-as-usual either.

A new Role of Business in Trump Times
We have seen encouraging moves by state and local governments to do what they can to work around Trump (for example, on the Paris agreement), and business is also playing a new role.  While corporate lobbying and political involvement is nothing new, what is different is that business is now engaging on a range of social and environmental issues that have little to do with their core business activities.  A few notable examples include:

Earlier this week, Patagonia’s homepage shifted from its usual backdrop of surfers and climbers to solely a black backdrop with writing in white stating:

The President Stole Your Land
In an illegal move, the president just reduced the size of Bears Ears
and Grand Staircase-Esclante National Monuments.  This is the largest
elimination of protected land in American history.

 

Patagonia – A Frontrunner in Opposing Harmful Governmental Policy Changes
Patagonia has a long and established history of progressive action both internally and externally.  But, its new efforts signal a move from lodging disagreements to using its corporate resources to actively oppose harmful and discriminatory governmental policy changes.  While in yesteryear government was the space where protections were afforded and business need only comply with relevant regulations, we are now in an era where business must step up to defend the greater good.

Hats off to you, Patagonia.  Corporate America, please take note and know that people everywhere are looking to you to use your power and resources to defend and advance the public good.  Now is your time.


Erin Leitheiser is a PhD Fellow in Corporate Social Responsibility and Sustainability at Copenhagen Business School.  Her research interests revolve around the changing role and expectations of business in society.  Prior to pursuing her PhD she worked as a CSR manager in a U.S. Fortune-50 company, as well as a public policy consultant with a focus on convening and facilitating of multi-stakeholder initiatives.  She is supported by the Velux Foundation and is on Twitter @erinleit

Pic by Erin Leitheiser, taken from Patagonia’s homepage Tuesday 5th 2017.