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The Elkington Report

50 years after the Earthrise photo, let's stop lipsticking corporate pigs

How often do you admit that these big industries are "ecologically bankrupt?"

"Please protect the environment and don’t print this blog."

Such blandishments are everywhere these days, but thank heavens I ignored them when I visited Carillion’s website a few days after the news broke that the company was going belly-up in one of largest corporate collapses in the United Kingdom. Early news reports suggested the construction company has some $6.9 billion in liabilities, with humungous implications for job losses, worker pensions and further business collapses through its supply chain.

Furtively, I printed key parts of the Carillion website, specifically the bits trumpeting "Our Sustainability Approach." A few days later, the company’s web presence was frozen, largely replaced with a standard statement from the official receivers replacing earlier content.

If you’re nosey, you can still find shreds of the old order, at least at the time of writing. Here’s just one small scoop, offering invaluable insights on sustainable business, as shown in Carillion’s 2016 sustainability overview:

"Sustainability is a core strategic capability and makes us a better company to work for, to do business with and to invest in."

It’s also worth quoting the company’s chief sustainability officer, David Picton, presumably before he became aware of the direction of travel:

Businesses without visionary engagement, inspiring stories, responsible compliance or public trust are businesses without competitive futures. For Carillion, sustainability is how we shape our competitive future, how we add value and how our people create even more inspiring stories for a better tomorrow.

Well, joy. Stories. But if this is where companies end up when they embrace this version of sustainability, no thanks.

And would that this was the only recent example of an abject misunderstanding of what sustainability is — or should be — about. Late in January, for example, Considerate Constructors, a U.K. building industry standards body, handed out its annual prizes under the chandeliers of London’s Four Seasons Hotel. There must have been jubilation at another construction company, Rydon, when they won no less than four awards for community care and the like.

But Rydon, as the Evening Standard noted caustically, is central to ongoing investigations into one of the country’s most tragic building disasters, the conflagration of Grenfell Tower in June 2017. This left more than 70 dead and hundreds of people homeless. Rydon led the process in which the tower originally was clad with insulating (but, as it later proved, highly combustible) external panels.

The critical information was hidden in plain sight, appearing in tiny type on page 78 of the company’s 2016 annual report.
A separate investigation by the same London newspaper led to the sacking of accountants KPMG as advisors to the public inquiry into Grenfell Tower. It was revealed that KPMG was also consultant and auditor to Rydon, to the Royal Borough of Kensington & Chelsea (owner of the tower) and to Saint-Gobain, the manufacturer of — wait for it — the insulation used in the tower’s fatal cladding. 

In Germany, meanwhile, the news just broke that Volkswagen, Daimler and BMW had forced caged monkeys to watch cartoons while inhaling exhaust fumes from a VW Beetle. The idea: to prove that nitrogen oxide fumes are harmless to humans — even though exactly the opposite conclusion already had been drawn from less corrupted science.

The three companies responded by saying that they wanted to distance themselves from the tests "in the strictest terms" (Daimler), that they "hit the brake too late" (BMW), or that they accepted responsibility for "research" that was "wrong, unethical and repulsive" (VW). 

Less pernicious, unless your pension is invested in their shares, we see General Electric — once vaunted for its "Ecomagination" green business platform — trying to work out how to retreat from the conglomerate model pioneered by former CEO Jack Welch. Here was a company that, despite having trumpeted its sustainability credentials under another former CEO, Jeff Immelt, had doubled down on power generation equipment and oilfield services at precisely the point where the rest of us began to wonder if there was a future for fossil fuels.

What about the Dow Jones Sustainability Indexes promoting VW as sector leader a few weeks before the emissions scandal broke?
Now let’s loop back to Carillion. As the Financial Times noted, "Analysts seemed to miss the [warning] signs — or dismiss them. A month after Carillion’s annual report [brimming over with red lights] was published, last March, Stifel had a 'buy' recommendation on the shares, JP Morgan advocated an 'overweight' position, Jefferies and Liberum said 'hold', Morgan Stanley suggested 'equal weight/in-line' and RBC said an investment would 'sector perform.'"

The critical information was hidden in plain sight, appearing in tiny type on page 78 of the company’s 2016 annual report. 

But how would the global sustainability industry show up in the same blinding light? What about the Dow Jones Sustainability Indexes promoting VW as sector leader a few weeks before the emissions scandal broke? How would we know whether the businesses we severally endorse and support are truly sustainable?

To start with, anyone worth their salt knows that none of the world’s top industries would be profitable if they paid for the natural capital they use. To put it another way, the big industries we serve are ecologically bankrupt. How often do we remind our clients and partners of that uncomfortable fact?

Fully 50 years after that first, paradigm-shifting Earthrise photograph, it’s time to take stock of our collective progress. As it happens, 2019 will be the 25th anniversary of the Triple Bottom Line, the term I coined back in 1994. So here’s my pledge — and an invitation.

I plan to dedicate 2018 to a critical review of all forms of multiple bottom line capitalism, sometimes styled "multicapitalism." On the watch list will be the Triple Bottom Line, the Double Bottom Line, the Quadruple Bottom Line, WRI’s Expanded Bottom Line, Social Return on Investment, multiple capital models, ESG, Kering’s Environmental Profit & Loss, Blended Value and FSG’s Shared Value, pwc’s Total Impact Measurement & Management and BCG’s Total Societal Impact.

 A veritable Tower of Babel — and we know where that ended.

So now the invitation. Join us. Help light 25 candles on the triple-bottom-line birthday cake next year, by all means, but also help us ignite the dynamite sticks needed to break the logjams blocking much-needed systemic change. Let’s also co-evolve a positive, uplifting and, above all, shared vision of what we must achieve over the next 25 years. 

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