Chatting with my colleague Bruce about the world’s greatest challenges recently – he spoke of his dislike for the word “sustainability”. It is too woolly to be useful and it can mean anything to anyone, he argued.
He raised the question – do we need to simplify sustainability to scale it?
In the conversation, I defended the word sustainability. The fact that it is confusing forces us to think harder and to engage with its complexity. It is good that it is not simple. After all simple solutions, allied with defining value in narrow financial terms and ignoring systemic impacts is the major contributor to our sustainability crisis.
But the conversation with Bruce got me thinking. Here is my take – the risk with a clear and simple definition of sustainability is that we will adopt one or a small number of scalable and efficient solutions that create the perverse result of increasing overall systemic risk.
Systems-thinking and Sustainability
Let’s examine this idea. Most will agree that sustainability is a systemic problem. A system can be thought of as a network of nodes and links. Nodes are identifiable actors like nations, species, ecosystems, or organisations. Links are the relationships between the nodes.
Sustainability is intertwined with all our major systems, such as manufacturing systems and economic systems, political, social, and cultural systems, and technological and legal systems. And each of these systems is connected with the other.
When a system reaches this level of complexity, it can no longer be controlled from the top. Through the networks created by billions of micro-decisions, the system is in charge.
Stability, Resilience and Chaos Theory
A feature of systems is that they are inherently stable – albeit the individual system components can be chaotic. A chaos of countervailing forces is sustainable and stable because individual forces are prevented from running amok by their countervailing opposites.
However, if a specific force within a system becomes overly dominant, then the chaos of countervailing forces no longer balances, and the system becomes unstable and unsustainable. The current and obvious example is the overwhelming force that humanity is exerting on planet Earth.
When a system becomes terminally unstable (i.e., it cannot restore balance from within its current state) it will flip into an alternative and entirely new state where stability is achievable. By definition, this new state will dampen the impact of the force that caused the instability in the previous state. Because, in the long run, the system will have its way regardless.
A resilient system has nodes that behave in a diversity of ways and the links between them are weak. If the nodes behave in similar ways and are strongly linked – then the system is fragile. This is because when a fragile system becomes perturbed, the response of the nodes synchronises and the strong links between the nodes accelerate the perturbation across the system.
EU Taxonomy
Therefore, counterintuitively common standards can be problematic. Take for example the EU Taxonomy which on the one hand makes trade and finance between organisations (where organisations are the nodes) quicker, easier and cheaper while on the other hand, it is also designed to ensure that all those organisations behave in the same way.
This means that any error or miscalculation in the starting conditions for the EU Taxonomy could have a tumultuous impact at the system level. From this perspective, the inclusion of fossil gas and nuclear as green investments within the EU Taxonomy quite rightly became a lightning rod for controversy. If their inclusion distorts the starting conditions for a sustainable finance pathway, then systemic imbalance will be amplified and accelerated.
Tipping Points
The tell-tale signal that a system is approaching a tipping point, where it might be about to flip states to regain stability, is that it begins to flicker – that its range of behavior broadens, and becomes more unpredictable or volatile. Hence, when we look at the relationship between climate and weather, food and energy, political instability and migration, or the rapid spread of infectious diseases, these can be regarded as indicators of a system in flicker mode.
The intuitive response to the sustainability challenge is to further harmonise standards across nodes and strengthen links between them so as to accelerate our response. This is what Bruce is arguing for. He wants to simplify sustainability to make it easier to implement and less open to interpretation.
Systemic Risk
However, systems theory advises that reducing systemic risk requires increasing the number and diversity of nodes, making them smaller, weakening the links between them, compartmentalising sub-systems and increasing overall redundancy (i.e., make everything less efficient).
Virtually every sustainability policy we have is seeking to do the opposite. We are going in this direction because we have gotten ourselves into such a mess that we have no choice but to try solutions that can spread at speed and at scale. Sometimes you are left with no choice but to take a high-risk option. But in doing so, there is no margin for error. Bruce is correct! Our policies must have an impact. If they are simple and clear, they are more likely to be implemented at speed and at scale and have an impact. But that means we must get everything right – including the EU Taxonomy. Greenwashing is now deadly!
Accelerating Transition
The pace of transition towards sustainability must accelerate. To date, we have been seeking to address our sustainability crisis by attending to minutiae, tip-tapping with recycling initiatives, marginal improvements here and there, tweaking incentives around investment portfolios, trying desperately to make modifications that won’t upset anyone. Unsurprisingly, the sustainability crisis is worsening faster than our response.
Never have we been so forewarned about a crisis unfolding and worsening in front of us.
Key questions for the boardroom right now include:
How can you profit from solving the world’s biggest problems? And
Is the world better off because your business exits? If you are saying yes, can you demonstrate it?
When the challenge seems overwhelming, there is an understandable tendency to seek out simple solutions. At this time, the words of Nelson Mandela seem pertinent:
It always seems impossible, until it’s done.
If you would like a no-obligation conversation about your sustainability strategy or any of the elements upon which it depends, please reach out.
