Zen and the Triple Bottom Line

The Elkington Report

Zen and the Triple Bottom Line

GreenBiz

Perhaps you’re too young to recall — or to have read — Robert Pirsig’s 1974 book, "Zen and the Art of Motorcycle Maintenance." It had quite an impact on me at the time. One key line: "The truth knocks on the door and you say, 'Go away, I'm looking for the truth,' and so it goes away. Puzzling."

In the Tomorrow’s Capitalism Inquiry we will launch in the fall, our aim is to solve the puzzle of how business and financial markets can best address multiple capitals and future forms of value. We will wire the door for sound — and encourage all sorts of people to knock.

Take this as your invitation to take part in that inquiry, slated to run for a full year. The idea is to use crowd sourcing to critically review progress — or the lack of it — with the Triple Bottom Line.

But before we get to that upbeat story, let me start with a lament.

Few people better embodied the skill of being a successful chief sustainability officer than Covestro’s Richard Northcote, who died last month. I last saw him in Shanghai a few weeks earlier, where he was the life and soul of a conference on sustainable cities. Some aspects of the event were captured in my most recent post, with the delicate title "Are We Deranged — Or Just Delusional?"

Richard was neither. When the high-tech polymers company Covestro spun out of Bayer, it wholeheartedly embraced the Triple Bottom Line — TBL, for short — with its "People, Planet & Profit" mantra. The company’s former CEO, Patrick Thomas, explained the background in a video interview we shot for our Project Breakthrough platform, co-hosted with the U.N. Global Compact.

Strikingly, at a time when many still see the TBL as an invitation to juggle and trade off different forms of value, Patrick insisted that the aim must be to improve on at least two dimensions while, at worst, holding the third steady. Both he and Richard instantly would have understood what I’m about to say.

It is an age since Zen enjoyed much currency in corporate boardrooms, if it ever did — at least beyond organizations co-founded by the late, great Steve Jobs. But in my experience, it has a useful — if occasional — place in influencing how leaders and top teams think beyond the single bottom line agenda.

Born wise?

To paraphrase Shakespeare, some business leaders are born wise, albeit precious few of them. Some acquire wisdom along the way. But others have to have it rudely thrust upon them. A few of these, including a former CEO of Shell, even go on to become priests.

Not that I would ever have labelled what we did for companies such as Shell as Zen. Indeed, I have spent most of my working life peeling off the labels others have tried to stick on us and our activities. Often, such labels are a form of constructive dismissal.

But the spot-welding of emergent memes with existing business language has been a constant in my work: terms such as "green consumer" back in 1986, "triple bottom line" in 1994 or more recently "carbon productivity" (this one borrowed, with permission, from McKinsey, which coined it back in 2008).

The power of some forms of Zen flows from their use of strange words and extraordinary actions. The intent: to jolt us into new realities. In that vein, a fair few people found my three words, "triple bottom line," exceeding strange when I first suggested them back in 1994.

One colleague energetically resisted the idea until Shell came knocking at our door a year later. Embroiled in its Brent Spar and Nigerian crises, the oil giant wanted us to help it view the business and society agenda through the three lenses of economic, social and environmental value added or destroyed. We refused to play ball for a couple of years, but then worked on Shell’s first sustainability report, "People, Planet & Profits."

So much for strange words. What about extraordinary actions? Well, in announcing what could be the first "product recall" of a management concept in a Harvard Business Review piece last month, here’s how I explained a move that dumbfounded some and had at least one long-time TBL champion publicly in tears:

If an industrial product like a car fails, the manufacturer pulls it back, tests it and, if necessary, re-equips it. In case manufacturers grow careless, governments run periodic road safety tests. Management concepts, by contrast, operate in poorly regulated environments where failures are often brushed under boardroom or faculty carpets. Yet poor management systems can jeopardize lives in the air, at sea, on roads or in hospitals. They can also put entire businesses and sectors at risk.

With this in mind, I’m volunteering to carry out a management concept recall: with 2019 marking the 25th anniversary of the "triple bottom line," I propose a strategic recall to do some fine-tuning.

Provocative, yes, and we expected a response — but not the social media feeding frenzy we got. Happily, there were a lot more dolphins than sharks. Our team is still working through the responses but scrape aside the back-slapping and earnest suggestions that other management concepts should be subjected to the same sort of scrutiny, and take on board a few head-on assaults (although perhaps ignoring such views as "The concept should have been buried alive decades ago!"), and a number of themes surface.

The first is the view that the TBL concept was novel, if not new. As multi-capitalism pioneer Mark McElroy put it: "For whatever it's worth, Von Carlowitz arguably introduced the idea (not phrase) in 1713 as Edinger & Kaul point out (2003): ‘He outlined the triad principles of sustainability (ecology, economy and social aspects)’ But to John's credit, he not only coined it, he 'capitalized' it!"

Once it existed, the concept is also seen as having provoked new thinking. It is also seen to have been a useful counter to neoliberalism and related ideologies. One of my favorite science fiction authors, David Brin, responded: "Your Triple Bottom Line is one of the more cogent answers to the insane way that [Milton] Friedmanism has shortened the investment horizons of corporations. I’ll be posting soon on Contrary Brin about how Adam Smith would have despised today’s short-sighted CEO caste." 

Terry A’Hearn, who runs Scotland’s Environmental Protection Agency (SEPA) and was an early TBL pioneer in Australia, noted: "Some new ideas are right for their time; few new ideas are right for all time. With your intellectual integrity, you’ve yet again asked us to recast our mindsets for the challenge ahead."

Craig Bennett, who heads Friends of the Earth in the United Kingdom, agreed: "It was a brilliant concept in its day, and it’s done a hell of a lot to help stimulate some very useful discussions and — much more than that — action. But, you’re right, of course we’re still a long way off the system change we really need."

B Lab co-founder Bart Houlahan was grateful for the "clarion call" and urged, "May we all embrace ‘the necessary radical intent’ to reprogram the ‘genetic code’ of business!" Given that over 2,500 B Corps are committed to performing against the TBL, this was a key hurdle for the recall.

Incrementalist strategies

Some people warned that most companies remain a long way behind. Dorje Mundle of BSR, formerly with Novartis, warned: "Yes, we have a few CEOs who understand the business-relevance and scale of the challenge, and who back it up with action. But they remain a tiny proportion of the 1,000s of MNCs/large national companies. The majority of corporate TBL action I see across sectors and geographies still comprise incrementalist strategies that move in the right direction and can be impressive in terms of relative progress but lack the ambition to drive change at the scale and pace needed in absolute terms."

Agreement was widespread that progress has been uneven across the TBL agenda, although some argued for a more flexible approach to companies and industries that are a very long way from true sustainability.

"The really big wins to the planet and to global health," argued Derek Yach, president of the Philip Morris-funded Foundation for a Smoke-Free World, "are less likely to come from [leadership] companies though, but [more likely to come] from those still considered ‘dirty, environmentally damaging or simply bad for health.’ Coal, combustible cars, combustible cigarettes, polluting waste management [are] some examples of sectors starting to innovate, build future business models that reduce the harmful impact of their core products, and do so profitably."

Less contentious were metrics, seen as key in driving real progress. Respondents mentioned techniques such as the environmental profit & loss (EP&L) methodology developed by PUMA, the shared value approach pioneered by Nestlé, the Multi-Capital Scorecard evolved by McElroy, and the Future-Fit Business Benchmark. Others pushed far more expansive framings — around Kate Raworth’s Doughnut Economics, for example, or the Ellen MacArthur Foundation’s circular economy.

Across the board, people wanted better policy, regulation and enforcement. The gist here, unlikely as it may seem in the midst of a bubbling trade war, is that governments must work to change the rules of the system, forcing companies to take people and planet as seriously as profit. 

But probably the biggest cluster of responses focused on the need for new forms of leadership — coupled with new, or rediscovered, values better attuned to the 21st century. If we really want to change the system, various responders insisted, we must help individuals operating within it to reconnect with their core values, renewing their sense of purpose, meaning and integrity.

Such themes will be integral to the case studies we plan to develop as part of the Tomorrow’s Capitalism Inquiry. Richard Northcote would have been a key member of our team. He leaves a huge hole, clearly, but maybe one you can help us fill.

Any and all thoughts welcome on Twitter (@volansjohn) or by email: [email protected].