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Insights 15 Dec 2010

Ten Trends from 2010

By Mohammed Al-Shawaf

1. Regulation Hasn’t Saved Us

From the failure of cap-and-trade, to the passage of a fairly meek financial “overhaul” bill, to the relatively unscathed nature of offshore drilling post- Deepwater Horizon, this year’s extraordinary market events have yet to translate into adequate government response, specifically from the U.S. And as government budgets scale back, what role for business and other private actors?

2. The City: Playground, Battleground, Testing Ground

Online, city-based ‘deal-of-the-day’ behemoth Groupon took cities (and their citizens) by storm this year, but there are plenty of opportunities for other businesses. An upcoming SustainAbility and Globescan survey cites urbanization and the growth of megacities as a positive for global businesses in the next 15 years. At the same time, urban areas are becoming the new battlegrounds for the sustainability agenda as an increasing share of the world’s population calls a city its home. But it’s not all doom and gloom. Cities have already proven themselves to be nimble actors, like the recent pledge from more than 1,000 mayors in 114 countries to publicly release climate commitments and performance, or the meteoric rise of bike share schemes in cities around the world.

3. Sustainability or Sustainable?

“Sustainability” (in eco/energy efficiency terms) is flourishing; but what about “sustainability” (in sustainable development terms)? The sustainability agenda is becoming dangerously narrow and subjective with many companies making important, low-hanging, but ultimately deficient progress on the full range of sustainable development issues within their organizations. Talk about sustainability has become omnipresent, yet there is a need for greater urgency and more accountability for progress in the context of the social, economic and environmental challenges we face.

4. Changing Minds

Perhaps the most fundamental challenge for sustainability is our very human tendency to stay entrenched in certain ways of seeing the world – whether it’s business as a zero-sum game or happiness as equivalent to owning and consuming more stuff. The ability to recognize the limits of our knowledge, to break out of such deeply held mindsets and think differently is becoming a vital part of the sustainability conversation. At the height of the credit crisis in 2008, a shocked Alan Greenspan admitted to Congress that he had placed too much faith in the self-correcting power of the market but had now discovered a “flaw in the model that I perceived [to define] how the world works” (src). More recently, Andy Revkin of the New York Times has blogged about examples of wrong scientific beliefs that were held for long periods, like the view that the Earth was the center of the universe. George Lakoff draws on language and metaphors to reframe the debate. The implication is: what will the next century’s thinkers realize is wrong about how we see the world today?

5. Energy Center Stage…

We’re in a world where the topic of energy is center stage: It’s in the headlines of major newspapers and magazines on a daily basis, climate change/energy bills became hot-button issues in legislative and campaign debates alike, Deepwater Horizon put offshore drilling and its inherent risks on the map, hydraulic fracturing received its own turn in the spotlight, buoyed by the New York state legislature and popular documentary Gasland and the IEA’s latest World Energy Outlook report, stated that the “peak” isn’t near—it’s here. And the energy issue of the decade is a clash with that other natural resource without which life cannot exist.

6. …And So Is Water

Water was the world’s most urgent sustainability challenge in 2010, according to a recent SustainAbility and GlobeScan survey (87% of experts rated it urgent, compared with 82% for climate change). Supporting that call for urgency are a host of new initiatives, tools and reports – CDP’s Water Disclosure Project, a water risk index from WRI, GE and Goldman Sachs, an update to the CEO Water Mandate’s Guide to Responsible Business Engagement with Water Policy, Ceres and Water Asset Management’s report on risks in the Municipal Bond Market, and Nature’s study showing 80% of the world’s population living with insecure fresh water supply, to name a few. IN short, we are set for inevitable collision between water scarcity and access to energy (more to come on that in 2011) – see SustainAbility’s Jeff Erikson’s recent blog,

7. The Year of the EV

Electric vehicles were the most hotly debated, market-almost ready disruptor of 2010. Depending on who you listen to (car companies investing big in EVs, car companies that aren’t, industry analysts, think tanks, consumers) your stance on how EVs will impact the transport sector will vary widely. Just recently, the Nissan Leaf received a 99 MPG rating and was named the European Car of the Year for 2011. The EV’s cousin, the PHEV, is not doing too bad itself, with the Chevy Volt garnering a 93 MPG rating for its all-electric component. One cautionary note: Last year’s “it” car, the Tata Nano, has proved that rampant speculation and early praise doesn’t always translate to selling cars.

8. The Ratings Game

The growth and diversity of corporate responsibility ratings marched on, all professing the same objective of furthering corporate transparency and improving performance. Problem is, companies are increasingly frustrated with this complexity and have responded, in kind, by targeting its engagement with some raters, and saying “no” to others. And companies aren’t the only ones confused – while stakeholders, in theory, now have many more ways of understanding corporate performance, making sense of it all has been a different story.

9. When Two Become One?

We have been talking about it for some time but now a committee has emerged, providing a framework that brings together financial, environmental, social and governance information in a concise and comparable format. Has integrated reporting come of age? And even if it has, is an integrated “product” an accurate proxy of integrated “processes” throughout a company?

10. A Question of Growth

Green shoots of different models of growth are emerging. The Financial Times is murmuring about the mismatch between the idea of unending growth and finite resources on a finite planet. The popularity of Tim Jackson’s Prosperity Without Growth maybe means that to question growth is no longer “deemed to be the act of lunatics, idealists and revolutionaries”. Business leaders are even talking about radically altered business models, but is the economic structure still the elephant in the bedroom for sustainability?

With thanks to contributions from the SustainAbility Team including: Frances Buckingham, Kyle Whitaker, Patrin Watanatada, Gary Kendall, Mark Lee, Yasmin Crowther and Michael Sadowski.

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Water

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