Can a healthy bottom line be consistent with sustainability?
It was on board the Greenpeace protest schooner Rainbow Warrior, off the Victorian coast of Australia in 1991, that US activist Molly Harriss Olson – leading a sometimes dangerous campaign to protect a southern right whale calving ground from oil drilling – had an epiphany.
Until that time she had believed there were two sides to the problems of environmental protection.
"There was an informed, intelligent view that understanding science and the evolutionary fact that we degrade and overexploit our nest at our own peril was right; and a self-serving, short-sighted, profits-only view, which was wrong. I had to show these organisations how to do it right," Olson recalls.
"In this case, the highly endangered whales had only returned to this calving ground in the past decade. People from BHP were saying the whales will just go somewhere else, but that's not the way nature works. It became a high stakes, high seas, front-page battle and we certainly got BHP's attention.
"But one night, when we were out there in the ocean in this situation in which people's lives really were at stake, I realised the corporates were never going to truly change because of humiliation and public shaming. Our actions were actually making them dig in, hold their position and defend it, rather than innovate and find a method to operate in a less damaging way. Nothing we were doing would have the long-term desired effect. They just didn't see the world the way we did."
This realisation, amid a high-seas clash off the coast of Warrnambool, would send Olson hurtling in a new direction. Suddenly, she understood that she would have to better know the creature she was struggling against. She would need to understand its needs and wants and accept that there were no black or white solutions – just many shades of grey and green.
She would come to acknowledge that business existed for a very good reason, that it did a lot of good along the way and that sustainable companies deserved to flourish and grow.
It set her on the path to become a global leader in the field of organisational sustainability , and led to her working at the White House with the Clinton administration in the early 1990s. Two decades later, that journey has landed Olson in the beautiful village of Gundaroo, in grazing country north of Canberra. It's all a long way from the White House and Olson's childhood in Palo Alto, California.
Today, Olson is the founder and convenor of the National Business Leaders Forum on Sustainable Development, chair of Fairtrade International – the dominant certifier of Fair Trade goods worldwide – and co-founder of Earthmark, an open-source platform being built to enable businesses globally to share sustainability standards, products and practices.
Olson and her husband, Phillip Toyne – who headed the Australian Conservation Foundation in the 1980s – also consult to businesses on environmental and Indigenous issues through their company, EcoFutures.
In her student days at the University of California, Santa Cruz, Olson studied natural resource science and contributed to what became the largest environmental conservation success in US history: the passage of the Alaska National Interest Lands Conservation Act in 1980.
"I realised all of the pivotal decisions being made about the critical environmental areas in the legislation, over fisheries and forests, timber and salmon, were not being made on the science. They were being made on economic grounds that were often not aligned to achieving long-term sustainable outcomes."
Importantly, she decided to add economics to her degree. "That was the smartest thing I ever did," she says. "Nobody understood at the time, though. Professors told me economics and science were two different languages and that I only needed one."
Understanding both sides has served Olson well in her lifelong goal to create a sustainable future, where business can thrive while ensuring a habitable planet for future generations. Certainly it helped her rise to the challenge of her White House job as founding executive director of the President's Council on Sustainable Development (PCSD) in 1992. An initiative of the Clinton Administration, it brought together the CEOs of the top 10 US industries – including oil, pharmaceuticals, timber and paper – and leaders of the nation's environmental and Indigenous organisations.
"If these people knew each other at all, it was because they'd been suing each other," Olson notes. "They were on separate planets and in-between were five cabinet secretaries, the president and vice-president. This mob were at war with each other, and we argued for 12 months about whether we lived on a finite planet or whether we had to have a growing economy."
Finally, all of Olson's life and career experience came together to show her a way through this impasse.
"After a long time I realised, once again, there was no right or wrong when it came to the prism through which people see a problem," she says.
"It took a year of arguments to be able to accept that growth was necessary because of inevitable population growth. But to be able to break that down and say: what is it specifically that we think should be growing? Pollution? No. Is it infant mortality? No. Teenage pregnancies? No. So what do we want to grow? How about jobs, innovation, health, education and happiness?"
Olson's team found ways of bringing together the two disparate groups of thought leaders. She put "these very high-powered and busy CEOs on a bus with their ties off, with the CEOs from the environment movement, and we took them to sites such as Chattanooga in Tennessee or San Francisco to look at how communities were transforming the ways they dealt with these issues. These towns and cities were bringing jobs into the community, but were also protecting the environment and reducing their carbon footprint," Olson says.
"It wasn't until the CEOs witnessed these real-life examples, and got to know and trust each other, that we were able to get them to change the prism through which they looked at things."
Amazingly, given the contrasting views the group had started with, the upshot was a consensus report that became a global landmark. "Consensus was the one thing the president had asked for and the one thing we were concerned we might never achieve."
The report presented a common view on what it would take to create a sustainable United States. Soon after it was finished Olson moved back to her beloved second home of Australia to start a family with Toyne. "In America, prisons were executing people and kids had handguns in their lockers at school," Olson explains. "If we were going to have a family, we didn't want to do it there." She now has two teenage sons at school.
Olson is using everything she's learned to inspire corporates to come up with strong sustainability strategies, but she's abandoned activism as a means of changing their ways. Instead, exactly as she did with the CEOs in Clinton's PCSD, she is showing them examples of companies that have transformed their systems, policies and procedures in the name of sustainability – and which, in doing so, have benefited enormously in terms of efficiencies, profit and growth.
Olson's not-for-profit organisation, the National Business Leaders Forum on Sustainable Development, is intended to inspire businesses to look at sustainability issues more comprehensively. Past speakers at forum events have included Australian Prime Minister Tony Abbott and his predecessor Julia Gillard; former US vice-president Al Gore; Charlie Lenegan (formerly with Rio Tinto); TATA head Kishor Chaukar; World Vision leader Tim Costello; and Ray Anderson, the former CEO of Interface.
Interface is one of the world's biggest makers of modular carpet products, but almost two decades ago Anderson came to a crossroads in his thinking about his company's environmental responsibilities.
"Ray Anderson was asked to give a speech on the environment at an international meeting of his employees," Olson says. "He read Paul Hawken's book, The Ecology of Commerce, and said, ‘oh my god, we build carpet squares that last eight years on your floor and 20,000 years in landfill. What are we doing?'
"He then set about redesigning his company's products and processes. That's how change often happens, through personal revelation. Everybody has kids or grandkids and at the end of the day, nobody really wants to damage the basic foundations of surviving on the planet." Business leaders certainly paid attention when they heard Anderson's story of how his business saved US$65 million because of greater efficiencies in the use of energy and resources.
"People pick up on that," Olson says. "They realise the bottom line is not inconsistent with sustainability. On the other side of the coin, if you concentrate only on your bottom line and in the process of making money you put your entire community out of work or pollute it, then you're not going to last very long at all."
The great driver of sustainability in organisations today is business leaders' growing awareness of the competitive advantage it delivers. They save money, streamline processes, deliver more sustainable products and services and, as a result, attract and retain better staff.
"Previously, people didn't understand the science of the environment and we developed the economy in the absence of that context," Olson says. "We designed our global economic system in the absence of understanding the bio-physical imperatives of the Earth's system as a whole.
"Now people understand the scientific underpinnings needed to sustain life on Earth and how to design business and the economy to align with this imperative.
"So the obvious question for every business is, how can we do things sustainably, and what expertise do we need on our boards to make that futureproofing happen?"
Six things I've learnt along the way
- Very few important achievements are made single-handedly. To inspire people toward a significant vision it must have meaning to them. This requires exceptional listening skills, using the language of "we" rather than "I" so others feel true ownership.
- Integrity matters, starting with the chairman and CEO. Work with people you trust who are not afraid to admit to making mistakes and who are not afraid to speak up with respect when important principles are at stake.
- There is no substitute for hard work and perseverance. If you love what you do, you will do it well and keep doing it even when it seems impossible.
- Short-term fixes are not always consistent with long-term goals. Keeping a long-term perspective on day-to-day operations requires keeping a truly open mind, which is also essential for innovation.
- Leaders are not born or made. They develop when there is an exceptional confluence between passion about things that matter, a fertile and receptive ground for profound ideas or change to happen, and the circumstances to allow that change to stick.
- Businesses of the future will be truly sustainable once the diversity and expertise in the boardroom matches the depth and challenges of the real world we live in.