Business and Industry: Transitioning to Sustainability

• Author: Ira Robert Feldman
• Pages: 71-91

Chapter 6

Business and Industry: Transitioning to

Sustainability

Ira Robert Feldman

A stubborn resistance to sustainability thinking persisted in the

U.S. private sector throughout the 1990s. As the World Summit on

Sustainable Development (WSSD) approached in 2002, William

Thomas noted that the extent to which businesses would translate

sustainability concepts into practical measures and execute them

was unclear.1“[S]ome leading American companies are among

those pioneers working on the sustainability frontier.But the journey

is in its early stages and the U.S. business community is by and large

still formulating a case for, and a plan of action concerning, sustain-

able development.”2

While businesses were visible at WSSD, particularly in champion-

ing partnerships through Business Action for Sustainable Develop-

ment (BASD),3that initiative did not immediately affect the course of

business activities in the United States. Instead, it appeared that gov-

ernment might act first, as early in the George W.Bush Administration

certain key appointees at the U.S. Environmental Protection Agency

(EPA)and the Council on Environmental Quality (CEQ) were known

to favor sustainability-oriented policy and regulatory structures.4

While several leading companies—notably DuPont, IBM, Interface,

and Genencor5—were already implementing their sustainability vi-

sions, and several states had embraced sustainability through execu-

tive orders, progress in the United States for much of the first half of

the decade remained episodic at best. A promising opportunity to em-

brace sustainability had been missed post-WSSD, and, as informed by

the history of Love Canal and OPEC oil shortages, many feared that it

would take a crisis to catalyze change.

Thus, although General Electric, Wal-Mart, and Goldman Sachs

announced pathbreaking environmental policies in 2005, the more re-

cent accelerated pace of change caught many by surprise. Indeed, we

may look back at 2007 as the year that represented a tipping point for

sustainable business practices in the United States: “[t]he greening of

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business has gone from movement to market as companies understand

there [are] opportunities for improving the bottom line and creating

new business value.”6For what many have termed “sustainable busi-

ness practices” or “triple bottom line” thinking, and others have ad-

dressed under the rubric of “corporate social responsibility” (CSR),

and, more recently, what the financial sectors have termed “Environ-

ment, Social and Governance” (ESG) standards, there has been a

game-changing convergence, not yet fully appreciated due to the

breadth and divergence of the spheres and disciplines involved.

Although no single cause fully explains the shift we are seeing, ac-

ceptance of the real threat posed by climate change has had the great-

est impact on the mindset of U.S. business. Understanding that “busi-

ness as usual” is an untenable long-term strategy in the face of over-

whelming scientific evidence, some businesses are responding to cli-

mate change by identifying the opportunities it presents, perhaps “one

of the greatest investment, business and job creation opportunities of

this generation...from carbon trading to renewable and cleaner en-

ergy generation and energy efficiency.”7Another indication of a

change in approach by business leaders was the formation in 2007 of a

coalition that took the lead in urging President Bush to support a

cap-and-trade system.8It remains to be seen, however, whether cli-

mate change will come to be understood and addressed by business

and industry as the quintessential sustainability issue of our time.

This chapter provides the context for the ongoing transition to

sustainability by business and industry in the United States. It identi-

fies four key trends—multi-stakeholder partnerships, voluntary re-

porting, private regulation, and the role of the financial sector—that

are significant for business in the transition to sustainability. The

chapter also provides three brief illustrative case studies, dealing with

Wal-Mart’s sustainability program, General Electric’sEcomagination

initiative, and Coca Cola’sGlobal Water Stewardship program. It con-

cludes with a set of recommendations for businesses seeking to gain

advantage from the key challenges ahead.

What Does Sustainability Mean for Business? Why Is It

Important in the United States?

While a transition to sustainability is already in progress, albeit at

an early stage in the U.S. market, the business community is still far

from consensus on the meaning of sustainability and corporate social

responsibility (terms now often used interchangeably). There is

72 AGENDA FOR A SUSTAINABLE AMERICA