Ideas
Michael Townsend

”We need two planets” - This interview by Jonas Rehnberg was originally published in Swedish by EYE Magazine, December 2013:*

Burgess COMMENTARY

Peter Burgess

”We need two planets” This interview by Jonas Rehnberg was originally published in Swedish by EYE Magazine, December 2013:*

Too much talk, too little action and sometimes outright schizophrenic. Such is the harsh verdict of Michael Townsend on the sustainability work of many corporations.

As author and public speaker, Michael Townsend has been involved in issues relating to business development and sustainability strategies for 25 years. He is known for his uncompromising stance and serves as advisor to companies like Life Technologies, Triodos Bank, Aviva and Skanska.

'Schizofrenic' is a strong word. What do you mean in this context?

'There is often a vast gap between the rhetoric of company’s Corporate Responsibility (CR) aspirations and the reality of its business strategy and operational behaviours. It is as if many corporations have split personalities, even if this is unintended.'

According to Michael Townsend, it takes more than a bit of eco-efficiency and volunteering to develop a truly sustainable business:
'The challenges facing the world call for new thinking. Sustainability must be integrated in the business model and pursued at management and board levels. As Peter Bakker, the president of the World Business Council for Sustainable Development reminds us, 'If you were to add up all the current sustainability plans of all corporates, it would not start to make a dent in the problems we face.'

What are those problems?

'If we continue with today's rate of resource depletion and consumption we will need the equivalent of two planets by 2030. Deep down, we all know we are living in a world of real physical limits, and it will not be possible to continue with the continuous growth model forever. We are continuing towards a perfect storm, at the intersection of climate change, a looming energy crisis, increasing resource scarcity, and economic re-structuring.'

What role can companies play?

'The ways in which companies make their money has a huge impact on society, and the planet. The problem is that the fundamental implications of the sustainability agenda tend to challenge our conventional approaches in business – especially our emphasis on continuous growth and consumption, and our short-term focus.'

What do we have to do?

'We need to stop thinking that short-term financial performance trumps all – it doesn't; without a sustainable planet and economy, there is no business. We may all have a shorter shelf life than we currently imagine. And like the parable of the boiling frog; many may not realise it, until it is too late.'

How should corporate boards and top management teams act?

'Many boards will benefit from developing a more progressive and radical agenda; not simply for the sake of it, but in order to meet the very real challenges of our time. I think a much more open dialogue is needed – we need to invite our Chief Sustainability Officers in, and ask what they really think the risks and opportunities are for the business.'

'Perhaps the time is right for bold moves such as when Michael Dell successfully argued that they need to take the company back into private ownership, to provide the scope to make ‘painful changes’ that could impact on short-term profits, while they turn the company around.'

Is it possible to achieve long-term sustainability and still make a profit?

'We see more and more evidence that sustainability-focused companies significantly outperform traditional firms, in both stock market and accounting performance. In a recent Harvard Business School study – which tracked the performance of 180 companies over 18 years – the 90 businesses that adopted environmentally and socially responsible policies significantly outperformed their peers. For every dollar invested in a portfolio of sustainable companies in 1993, would have grown to $22.60 by 2011. That beats the rise of $15.40 achieved by those companies that were less focused on sustainability.'

'Businesses who are a part of a sustainable economy may find new sustainable sales opportunities while reducing their risk profile and cost structure.'

Are there any examples of successful sustainability initiatives in Sweden?

'There are some great companies in Sweden – we looked at Skanska a few years ago, and were very impressed with its commitment to what they call Deep Green – whereby the construction process and product performance has a near-zero impact on the environment, and thereby enables future-proof projects.'