The future for sustainability

Beatrice Otto suggests what the future holds for sustainability and sustainable design

Will people have a clearer understanding of what exactly sustainability is?

• Sustainability is a word that doesn't mean much to a lot of people, and to many is a synonym for 'environment'. Over time, it's likely that its three-legged nature (social, economic and environmental) will become more widely understood, and a consensus of definitions will emerge. Encouragingly, there is a trend to define sustainability in terms of improved quality of life for all, now and in generations to come, which is may make it more real and graspable to many people.

Do you think more businesses see sustainability as a tool to help them become more proactive?

• It is likely that more companies will start to view sustainability as a strategic issue and that it will be further integrated into existing design processes. This may be partly fuelled by growing legislation, but it is also becoming something of a competitive issue.

Are there any other factors driving the sustainability agenda?

• Some of the impetus for sustainable design is likely to come increasingly from the insurance industry, as it reviews liability for environmental damage and security risks. September 11th may have given a boost to this trend, and recent extreme weather events such as Hurricane Katrina and the Asian tsunami.

Does environmental conservation really have a place on the company balance sheets?

• As techniques improve for measuring the value of services provided by ecosystems (such as flood mitigation, crop pollination, water filtration), it is not only becoming harder to keep environmental damage ‘off the balance sheet’ as an externalised cost, it is also allowing companies and governments to demonstrate to sceptics that nature conservation isn’t a luxury.  Even subjected to hard cost benefit analyses, nature conservation often comes out on top.
  The growing ability to demonstrate the benefits of ecosystem services is creating the potential to treat the regulation of water and climate as a utility for which people would be willing to pay, including those who might not otherwise care about nature conservation.  One such deal now being brokered is to invite companies which ship goods through the Panama Canal to buy bonds to fund reforestation which prevents the need for expensive dredging due to silting.  By buying such bonds, companies could expect reduced insurance premiums to cover them against the huge losses that would occur if the Canal were closed. 

Do investors really care about sustainability?

• There is growing evidence that investors reward companies that report on their non-financial performance (such as environmental or ‘Corporate Social Responsibility’ reports). The Dow Jones Sustainability Index is a sign of this trend.
  Some major investors now use sustainability screening in their investment tools. Goldman Sachs has committed to investing US$1 billion in renewable energy and energy efficiency projects, as well as investing US$5 million in setting up a centre to see how the free-market can solve environmental problems.

Aren’t ethical boycotts just led by an idealistic minority?

• Consumer pressure can be a fickle thing but, increasingly, it is having a big impact. Consumers will boycott or otherwise ‘punish’ companies they perceive as behaving unethically. Witness the consumer furore over genetically modified (GM) crops ('Frankenstein foods') in the EU, causing some supermarket chains to quickly change their stance on GM products. There is a growing body of research regarding consumer behaviour and how it can help or hinder the move towards sustainability.
  Research by the Co-operative Bank found that ethical boycotts were costing big brands £2.5 billion a year, and two thirds of consumers who have once boycotted a brand, won’t go back to it.  Almost a third of consumers in an international poll in 2002 said they had boycotted a product or service for ethical reasons. 

Surely it’s not just down to the consumer to drive the sustainability agenda, what about legislation?

• There is a trend to increasing legislation, with the EU currently leading in overall stringency, though Japan may take over, and some American states in some respects (such as California for car emissions) are noteworthy. It is likely that this will continue, and recent directives will start to bite - such as the Directive on Waste from the Electrical and Electronics Sector (WEEE Directive), and the End of Life Vehicle Directive which is already forcing car manufacturers operating in Europe to think about recycling cars.

Is ‘emissions trading’ a possible solution to environmental degradation?

• Emissions trading means that you can sell credits if your own carbon or other emissions are below a specified amount, and if you exceed your ‘right to emit’ you can buy from those in credit.  In February the Kyoto inspired carbon emissions trading scheme kicked off in the EU.
  But emissions are not the only thing that can be traded to reduce aggregate damage.  In Australia, farmers can trade ‘transpiration credits’ for their irrigation with forest owners, in order to counteract the salination effects of irrigation, which forests mitigate.

How realistic is a zero waste policy?

• A number of companies have adopted zero waste or zero emissions targets.  More recently, we hear of companies adopting targets to become ‘climate neutral’ or even offering products which are carbon neutral, such as Interface’s Cool Carpet option.  Interface is heading for climate neutrality as a company, and beyond that, to become restorative, that is, making up for damage done in the past by itself and others, such as by ‘mining’ landfill for old carpets to serve as feedstock for new carpets.  STMicroelectronics has also set a target for climate neutrality by 2010.

Could collaborations between NGOs and business point to a more sustainable future?

• NGOs have traditionally played a strong role in raising awareness of environmental and ethical issues in business, sometimes through controversial means.  However, there is a growing trend for them to also collaborate with business and for business to engage with them in dialogue rather than the more confrontational relationships of the past.  These kinds of partnership are likely to increase.
  For example, the Institute for One World Health find innovative solutions to address the fact that while 90% of the world’s disease burden falls on developing countries, only 3% of R&D in pharmaceutical companies is aimed at these diseases.  The institute takes on drug development projects that are dropped for lack of funding from university departments and pharmaceutical companies. If the idea is in patent, they persuade the owner to donate the intellectual property, find non-commercial funding and persuade various researchers to contribute expertise pro bono. 

Can business procurement ever be ethical as well as profitable?

• Some companies are looking at ways to source materials in developing countries in a way that is environmentally sustainable while contributing to economic well-being at a local level.  For example, DaimlerChrysler uses coconut fibres grown by Brazilian farmers for car seats and headrests.  Not only has this reduced production costs by 5%, it has also increased average monthly incomes for local families from US$36 to US$300. 

What are the implications of an ageing population on sustainability?

• It is estimated that today’s population of approximately 6.5 billion will increase to about 9 billion by 2050, of whom some 8 billion will live in developing countries.  This of course presents enormous challenges in terms of meeting their needs in a sustainable way.
  Another side of the demographics coin is the ageing population, creating an increasing burden on healthcare systems and financing, and a possible impediment to economic productivity.  General Motors has calculated that its health care costs for retirees currently add US$1,500 to the price of every vehicle it makes.