Last week TBL had the opportunity to have an informal telephonic chat from Karachi with John Elkington, while he was participating in the Corporate Responsibility Summit in Mumbai, organized by Child Rights and You (CRY), one of India’s leading NGOs working for children.
Wikipedia describes John Elkington as “a world authority on corporate responsibility and sustainable development”. He is currently the Founding Partner & Executive Chairman of Volans, a future-focused business working at the intersection of the sustainability, entrepreneurship and innovation movements.
He is also co-founder of SustainAbility (1987, where he is a non-executive member of the Board) and of Environmental Data Services (ENDS, 1978). John Elkington has been described by Business Week as “a dean of the corporate responsibility movement for three decades.”
He has written or co-authored 17 books, including 1988?s million-selling Green Consumer Guide, 1997′s Cannibals with Forks: The Triple Bottom Line of 21st Century Business; the book which brought his triple bottom line concept and agenda to a wider audience, and 2008′s The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World, co-authored with Volans co-founder Pamela Hartigan.”
Given that our sustainability advocacy platform itself is called Triple Bottom-Line, it was but natural that our very first question to John was to find out how and when he came up with this term. Here’s how John replied:
John: Thank you for the question. It was in the early 1990′s and the Earth Summit was held in 1992 as you remember, and business at that time was trying to get it’s brain around this new sustainable development agenda, which was introduced in the late 1980′s. The way it was then trying to do that was by talking about eco-efficiency, making or saving money through pollution prevention or resource efficiency measures or whatever. And that was fine, and I think if you’re dealing with engineers then that’s a good way to go, to match the environmental dimension to all this put together. Though I was uneasy about that, I felt that even though that was an important contribution, it wasn’t the full range of business responses to sustainable development.
So with a couple of colleagues I have been trying to think this through and after about 18 months of trying to think it through, in 1994, we came up with the idea of framing it in terms of an expanded bottom line, and so obviously the social and environmental pieces made sense.
So instead of just simply taking the financial bottom line, I extended it to the economic dimensions as well, which almost no companies when they are doing their annual report and accounts, cover. At the time that seemed to be a slightly revolutionary agenda. In certain parts of the world, the economic aspect seem to be problematic; you think about bribery and corruption, and whether companies like Starbucks actually pay any tax at all in certain markets. That’s why the wider economic dimension is becoming more important as well. So very briefly that’s where it came from. So that’s where it came from. In the following year, 1995, I was trying to think about how I would like to make the Triple Bottom Line more understandable to ordinary people and that’s where the people, planet, profit formulation came from.
TBL: So did you get any patent on the term?
John: (laughs) – No, it was actually quite the opposite. We looked into getting intellectual property rights on it because we wanted to make sure no one else could. We wanted to be completely open source, we did not use open source as a term then, but that was the spirit of the thing.
In many ways I think that was a key factor in making the thing and again we wouldn’t have used the term then ‘to go viral’, but it was not owned by a particular organization or consultancy or whatever. So we looked into it and found that the best way of protecting the concept was just getting it out there and getting people to using it as fast as we possibly could and that’s what we did do.
It took off faster in certain markets than in others, like Netherland, Holland – people, planet, profit, took off very rapidly and since then it is now endemic in that country and we are now a long way away from where we were then. In Australia and New Zealand, it also took off and went right through every level of government. So that was the strategy, to just get it out there and see what happens.
TBL: Well, as you can see, we took the liberty of making a slight amendment to the terminology, and we are calling our triple bottom-line as people, planet and prosperity.
John: Well that’s funny and well done! As in 1996, I also offered that as an alternative framing, because some people thought profit was just too capitalist. So we did use the prosperity language but found that it wasn’t picked up to the same extent. It’s great that you have done that and I would encourage you to push that framing of it.
TBL: People are generally using the terms CSR and sustainability quite interchangeably. In your opinion is this correct, or would you say there is a difference between the two concepts?
John: I?think there is a profound difference between the two concepts, and I also think it is extremely dangerous where there is this overlapping, or sort of conflation between these different languages. I mean for a start, anything with “C” in it is speaking of corporate and their particular agendas, and corporations’ are only one part of it, of the system level responses we need. We got to involve financial markets, we got to involve every level of government, we got to involve civil society and so on. There is no way that CSR, conventionally defined, can address the sustainability challenge.
For me it is fundamentally about inter-generational equity. I think every way you look in today’s world, today’s generations are cascading debt to future generations. In some cases that’s through public borrowing, and the levels of public debt and the global laws are quite astounding. If I were a child, I would be incensed. And then we have this climate change where again we are cascading environmental debts.
And I don’t think these things are remotely the same and in the last 3-4 years that has been part of my mission in life to try and help people in the sort of global C suite – business leaders, understand that fact. I think that’s now happening, you may have seen the latest World Forum’s Global Risk Study that came out just a couple of days ago. But they are talking basically about triple bottom line; they are talking about economic problems, they are talking about climate and environment problems, and the economic problems getting in the way with dealing with environmental problems and a range of socio-economic issues, like the wealth divide in different parts of the world, endemic risks and so forth.
I think there is a growing sense that CSR is a contribution to the sustainability agenda but it should not be seen as the same thing.
TBL: We think John, that as one ponders over all these concepts and the way they are evolving, you find a lot of overlap between different concepts. Concepts like good governance or best practices have been around for a long time and if you think about it, these have to be an integral part of corporate social responsibility as well.
John: I?definitely agree and in some ways it’s a territorial thing. We are territorial animals; we like to stake out our little bits of turf, and having our own language helps to do that. To some degree there is this sort of battle between different labels, different branding and different bits of this agenda. Fundamentally I don’t terribly mind what language is used, I really don’t mind if people never use the term triple bottom line or sustainability again as long as they understand the nature and scale of the problems we face and respond to it in the appropriate way. But at times it is a bit like the Tower of Babel, you are right, there are so many languages that people collapse in confusion.
TBL: Yes, I understand. Right, now moving on to our next question here, you know the CSR concepts which have come up over the years, from many different people. And I think one concept which I particularly like or relate to is the ‘creating shared value’ concept of Michael Porter. But at the same time I wonder often, whether these concepts really have universal applicability, considering that social, cultural and economic differences are huge across different countries, different regions; like I mean in the West it is so different from what we have here in Pakistan or India. The issues are so different, so do these concepts in your opinion, have that kind of universal applicability or how should one go about it?
John: You are absolutely right, there are cultural differences, there are cultural barriers. I think the shared value concept itself is potentially a very powerful one. I think it is, for very big companies in particular, a way of reframing and rethinking their social and environmental programs. To think increasingly about how they could be better integrated into the guts or the DNA of what a particular business does. I think my main concern, back to your competing languages point, has been that Michael Porter in particular, has been fairly energetic in presenting shared value as an alternate or substitute or replacement for corporate social responsibility, and also the substitute for sustainability and to me that is ill-advised and it’s something I have challenged him on a number of times. I think he and Mark Kramer now take a rather less provocative stance on all of this.
I think in some ways what shared value does, is to reframe the leading edge of CSR, in a way, rebrand the leading edge of CSR and there is nothing wrong with that. But I think what is most exciting about the concept has simply been the way in which it has been picked up in different parts of the world, and particularly in the global North and particularly in multinational corporations, because they see it as a potential key to unlocking wider resources in this space.
TBL: Moving on to your concept of the Zero Impact Growth Economy, and frankly I have not read up on it, there was not enough time. So does the term imply that you can still grow without making any negative impact, as I think that is what it implies? So if it implies that, do you think this is practical or can you say it is just a theoretical concept, because even just staying alive, you know makes an impact. You’re creating refuse and not all your refuse is biodegradable and you’re breathing air and breathing out, whatever. So what is this Zero Impact Growth Economy?
John: (Laughs). Just for clarity that particular phrase, the Zero Impact Growth Economy is not my phrase; it’s one that Deloitte Innovation came up as part of a programme that we jointly have been developing. My concept is slightly different. It is that there are these people, they are innovators, they are entrepreneurs, they are intrapreneurs working inside businesses or organizations, there are investors, who are increasingly stating what they are aiming to do in terms of Zero-based targets. For example at the CRY summit tomorrow a number of the companies have zero-tolerance policies on child labor.
What I was doing in the book (The Zeronauts, Breaking the Sustainability Barrier) was simply looking at what these individuals are doing in a range of different areas, ranging from poverty to pandemics, to climate change. I suppose what really struck me was how many people out there are using Zero as a way of stretching their ambitions and their targets, and particularly in the United States where we tend to think that things are going well but rather slowly at the moment. In areas like waste, toxics, and carbon, zero-based targets are out there. I am not a believer in the ideal that we will create an economy which will have Zero Impact. As you say that is a physiological and physical impossibility. But I continue to be fascinated by the people who embrace Zero as a way of provoking their own thinking and outstretching their ambitions.
TBL: Yes, but at the same time it could be a term which can be abused as well, for if nothing else for PR purposes.
John: Of course, we see that already in terms of certain car companies that have been taken to court because of their advertising, which talks about Zero-emission mobility or Zero-emission Vehicles; these are electric cars primarily. The point that has been made by campaigners is that these cars are not Zero-emission. They happen to be largely Zero-emission during use, but if you take into account the production of the car, the production of the components, the production of the electricity and so on you still have a big greenhouse gas footprint.
So I absolutely agree, and I think every piece of new language, whether it’s green, whether it’s sustainable, whatever it is, gets abused. It’s fundamental human nature to stretch reality in that sort of way. For me the Zero agenda, is a personal attempt in a way to challenge those people who understand the triple bottom line agenda simply as a balancing act. You have a project that creates economic and social value in a positive sense and that has a negative set of consequences, economic, social and environmental but then that’s alright. I mean it’s just a more thoughtful way of balancing off these different dimensions.
Whereas the idea of the Triple bottom line in my mind was that it was just not simply about making accounting more complicated or encouraging CEO’s to become gymnasts and do more complicated balancing acts. Instead, it was about how do you integrate all of these dimensions into the business model and create positive streams of value in each of the dimensions.
I was recently in South Africa and one of the things that struck me there was that when they talk about the triple bottom line, they talk about triple dividends; they are trying to find, in particularly in some of the big state industries, they are trying to find ways to deliver value on all three dimensions, and Zero is for me just another way of trying to wake people up to the fact that it’s not just a balancing act, it’s about a new way of doing things.
TBL: So still on Zero, What is a Zeronaut? How can I become a Zeronaut?
John: (laughs) I am not a Zeronaut. In no areas do I have Zero-based targets and one of the things I have seen on twitter and so on is when people say I am a Zeronaut. So that wasn’t again my intention. When we were doing the Green Consumer Guide in 1998 it was easier to say to people that they were great consumers in the sense that they were making consumer decisions on the basis of environmental priorities. In terms of becoming a Zeronaut on the individual level, I think it is easier to do that, if you are in a company or a business organization as you can push policy towards stretched targets, including Zero-based targets. It’s easier to do that in business than it is as an individual.
In Pakistan I could not sensibly encourage people to buy electric cars or anything like that which would be a sort of consumer decision that would play into the Zero-space. It might be that solar powered products might be a way of heading somewhat into that space, but that’s not something I am encouraging, I am not encouraging an army of Zeronauts to go out there, I am trying to pay attention to a bunch of people who are being ambitious in a way that intrigues me. Mainly entrepreneurs.
TBL: So is this your own term? It was coined by you?
John: Yes, the notion being that if you go back to the Greek mythology, you had 50 Argonauts who went on an exploration for the new lands and new adventures. All I’m just saying is that here in the book is that there are 50 people doing the same in relation to Zero-Based Targets.
TBL: So are they doing it in their own businesses or is there some kind of networking between them?
John: Very little networking as yet. In fact most of the people have not even heard of each other or what they are doing. Because they range from people developing companies like ‘Better Place’ in California which is all about making electric mobility, which is just the obvious ubiquitous solution, through to people who tried to and have driven diseases like smallpox off the face of the planet. One of the most extraordinary health stories in the last hundred years is that one; of how an overly endemic disease was driven to the point where it is now only in a few laboratories in very safe conditions. Larry Brilliant, who was one of the people who drove that smallpox eradication program, I don’t think has ever met Shai Agassi. This is not yet a tightly linked mafia of Zeronauts ready to, sort of launch out onto the broader stage. I think these people are trying experiments very often without very much reference to what other people are doing in other spaces.
TBL:?Okay, just shifting a little bit to our region John. For countries like Pakistan and India, developing countries with a whole lot of different issues than prevailing in the West, what would you say are the biggest sustainability barriers that need to be broken across to achieve positive results?
John: Just in relation to the last question, what I said may have struck you as negative in the sense that I said that these people don’t know each other and are not particularly well networked under a Zero heading. But part of what we have been doing with the Deloitte Innovation is we had the first Zeronaut symposium in Rotterdam in Holland last year. We are looking at it this year, and that was very explicitly an attempt to start pulling these people together and learning from Best Practice, to use a term for what they were doing, a term that you used earlier on.
Then to bring it to a more local or regional level and your barriers question. I think part of the problem that we all have is that we all live increasingly busy lives where we are flooded with information which is pretty confusing. It is very easy to use all of that as an alibi for doing nothing; as an excuse for denial of the scale of some of these issues that are coming. I see that in boardrooms, as much as I see it in day-to-day life. I think the issue of whether any individual can do anything on their own, given the nature and scale of some of these systemic challenges, is another barrier.
People may sense that there are new things needing to be done, but unless everyone else is doing them, they don’t see why they should start. I think in Pakistan that’s probably worse than almost anywhere else in the world. But if you look at the moment at Europe, the austerity programs, the near collapse of Greece, the teaching on the edge of different parts of the Euro Zone, has been an immense distraction for politicians and business leaders. And that’s one of the things the World Economic Forum is saying; that just as some of these very big, particularly environmental, problems and pandemic risk problems which are building, the people who should be reacting are enormously distracted.
The final thing I add on that list would be a very great temptation to minimize or dilute the new concepts and targets that are coming through. We talked earlier on about the Tower of Babel. I think that as these agendas go mainstream they dilute, and they dilute for all sorts of different reasons. Partly people want and say they are already doing the triple bottom line, they are already sustainable, they are already whatever it is and that process I think is very, very dangerous indeed. And part of what I think your role and mine and people like us has to be is to just remind people that whatever they choose to believe there is a wider emerging reality out there, which at some stage they are going to have to respond to. So I think there are many different barriers, and many of them are cultural.
TBL: Right. John our last question is possibly or partly answered by your answer to this question, but nevertheless.? The question I had was that now there is so much talk about CSR and sustainability all over the world and even this concept of Business Case of CSR has been around for some years already, trying to show corporate that this actually will benefit you. But in spite of all this it’s really not growing. I just feel that the practice of CSR is very slow in growth, maybe it is this in Pakistan that I feel this way, but I think generally also this is so; for example if you think in terms of this recent fire that took place in Bangladesh factory if you remember this.
John: Well I do, and the day when it happened and I had got the news, I sent an e-mail to a colleague at CNA, the Dutch retailing company just because they were one of the companies named as involved. CNA is an example of a company that has been doing a growing amount in this sort of space but they were still caught up in that tragedy and I think it?s not just that one tragedy; there are so many others that just have not happened yet.
So your fundamental question is about the future of CSR. I think CSR as it is currently understood and defined, actually has to go backwards before it can go forwards. Much of what that is done in this space is about being a bit nicer, a bit better, a bit more civilized and very often to your point about philanthropy, what companies are minding to do is to put a certain amount of money, a certain amount of human effort out there, almost like a social lubricant, to sort of keep the ship moving forward, to make sure they have the license to operate and to innovate and the rest of it. I don’t think that’s good enough. I think one of the reasons why what social entrepreneurs are doing is so important is that partly spurred by the way in which some of the new economies, billionaires who put money into foundations, like Bill Gates, the way that they think, it is about replication, it is about scale, it is about leverage.
I think the CSR world needs to wake up to the fact that there is a very different set of people out there who can teach them a great deal on how to make businesses better attuned to suit the expectations of the coming age, to put in a very abstract way. Part of what we do is to bring social entrepreneurs into major companies and take people from major companies out into the world in which social entrepreneurs operate.
So we have been trying to break down some barriers that we discussed a moment ago. To build relationships on the basis of which partnerships could form and scalable solutions might emerge as a result of all of that. It’s speculative but its good fun and I think its nicely important work.