The ultimate step of transforming business into conscious sustainability competence is the Holy Grail of the ‘Anthropocene’: i.e. our era in which humans have an increasingly significant influence on the Earth. Yet as sustainability gathers pace much of business-as-usual seems to be moving in the opposite direction by becoming increasingly split off from value. Voters see with dismay how remuneration committees are in the pockets of boards, emissions tests are fraudulent, insurance sales spurious and so on.

Given this stand-off much ostensible company sustainability is hollow. There’s a diversity of sustainability complexity with overlapping, confusing acronyms (GRI, CR, CSR, TBL, ISO14001 and so on). Analysing it for rhetoric may seem like a Gunfight at the OK Corral shoot-out, but the resulting overview assists those, like coaches, servicing leaders for good.

From experience of working with, and observing, sustainability leadership, I suggest here that each organisation has its unique ladder of awareness as it climbs towards sustainability. Commonly found rungs include:

• ‘Greenwash’ – i.e. false but fair-seeming sustainability claims: though deceptive, greenwash at least admits the legitimacy of sustainability, and in time may become a hostage to fortune

• Alignments between business-as-usual and sustainability (e.g. cutting out waste); alignments are easy win-win

• Strategic ambiguity: formulas like ‘creating shared value’ (‘CSV’) often fake cohesion between opposed business-as-usual and sustainability interests, yet yoke them together officially enough to avoid overt conflict

• The dark side: sustainability can be abused because it muddies the waters of accountability. Despite this the shareholder-only mindset is being transcended

• Making sustainability an indispensable part of the company’s policy and strategy. This long step towards full conscious incompetence requires new eyes to acknowledge the emptiness of the company’s sustainability to date

Great sustainability leadership, my focus, provides new vision supportively at the right corporate moment, freeing organisations to move further ahead on the journey from unconscious to conscious incompetence. Because true sustainability values are close to those of coaching and other responsible business services, providing know-how about how these values are being obfuscated could be a professional opportunity as the Anthropocene gathers pace.

What would it take for companies to make the further step still (the Holy Grail one) of moving from full conscious incompetence towards conscious competence? I suggest that conscious competence would entail the mobilisation of a critical mass of stakeholders, broadly defined. In relation to this, in the article/blog to come in this invited series, I explore sustainability stories. The present blog follows on from the previous ones on individual freedom’s exclusion from ecology (the good coach, May 18), and on the ethical consequences for coaching of environmental science (March 20).

Rungs on the ladder of awareness.

Experience points to the uniqueness of each company’s sustainability challenge, though of course there are also common sectoral, national and transnational factors. Thus the hierarchy of awareness suggested by the ‘rungs’ that follow here is illustrative only – each company needs to find its own special way.

False but Fair-Seeming Greenwash

Hollow sustainability manifests especially in greenwash. For example, incorrect natural fibre claims in clothing; ‘clean coal’; and ‘environmentally responsible’ bottled water.[1] Greenwashing is, of course, so common because of end-user pressures, like those for cheap clothing with rapid fashion turnarounds. As a result, external costs (such as pollution) by emerging market suppliers may not be followed up through the supply chain.

Yet greenwash is an advance from being unabashedly unsustainable because its pretension to new-found virtue is vulnerable to exposure as bogus. Completely unconscious incompetence, in contrast, ignores sustainability altogether.

Alignments between business-as-usual and sustainability

Alignments between short-term profits and sustainability create real sustainability outcomes (unlike greenwash). But they are only partial solutions which do not go beyond compliance; thus no company can ignore enforceable regulation or reputation loss, and cutting out waste is a profits win-win.

Sustainability gains often accompany technologically-driven change:

• Innovation in corporate products can produce major sustainability efficiencies; thus storing solar energy could turn fossil fuels into stranded assets

• Sustainable innovations in markets can sell recent inventions; for example, the high volume of Africa’s low margin consumers transacting business through mobile phones (this is thought to save energy use overall).

Sustainability vision aligned with commercial motivation may seem to go beyond the basics of legal compliance by combining the two in a single name like ‘Eco-Advantage’; but by itself this does not change corporate culture. To the extent that sustainability thinking is cordoned off into corporate niches −  which may be deliberately held in readiness for landscape or other transformational market change −  it is skin-deep.[2]

The fake sustainability of strategic ambiguity

Strategic ambiguity can be an advance from alignment because it brings in a wide-ranging sustainability vision − maybe by combining environmental and people issues − and purports to integrate it creatively with business-as-usual. But under the surface strategic ambiguity is a ‘structural fudge’.

Structural fudge is often necessary for internal coherence given the closeness of the unsustainable, business-as-usual starting point. How far coaches or people developers delve behind such strategic ambiguity may depend on the sustainability maturity of the corporation and individual client (in much the same way coaches make or withhold psychological interpretations depending on the extent of client self-knowledge). Strategic ambiguity about sustainability may represent a split between (or cognitive dissonance within) stakeholders, employees, executives etc.[3]

Within the following much-vaunted, overlapping contexts there is frequent strategic ambiguity about sustainability:

• Stakeholders. This term, which arose in the 1980s, recognises that the social and environmental effect of companies extends beyond shareholders to employees, customers, the supply chain, those affected by pollution, the public in general. Yet companies traditionally owe the highest standard of care (a ‘fiduciary’ duty) to their shareholders only.
  
  There is a fudge problem in our new Anthropocene circumstances, in which we all need to take responsibility together for the care of the planet, because the solution of extending the same duty of care to all affected stakeholders is held to be too radical. Instead there have been equivocations, for example the influential advocacy about twenty-five years ago that already existing common morality would suffice and could be brought more fully into profit maximisation (the financial crisis of 2008 has shown up such complacency!)[4]
  

• Creating shared value (‘CSV’). This is about redefining the purpose of the corporation in terms of a claimed higher form of capitalism. CSV is said to focus on the interdependence of business and society, to reconceive products and markets, to redefine productivity in the value chain, and to build supportive industry clusters and create pre-competitive frameworks. But it has been criticised for underlying greenwashing, ignoring social need, giving a purely efficiency-oriented answer to the normative issue of sustainability, and for not questioning the sanctity of corporate self-interest.
  
  CSV can be a stepping stone from business-as-usual towards conscious sustainability incompetence; for instance Nestlé, which has been much criticised for non-sustainability, orients itself in terms of creating shared value.[5]
  

• Corporate Social Responsibility (CSR). ‘Davos’, a media-saturated word, creates widespread ambivalence. We all know that CEOs of multinationals ritually converge on the World Economic Forum in this posh Swiss resort to talk (among other matters) about commerce’s unintended consequences, like poverty and global warming. Lamentably, says the founder, Klaus Schwab, a great many business leaders are not engaged. Thus ‘Davos’ is an ambiguous facade. Yet its air-miles are justified in that CEOs through their very attendance are legitimating corporate social responsibility, including the big idea that companies themselves are global citizens with duties.[6]
  

• Collaborating interorganisationally. Umbrella bodies like the Forest Stewardship Council comprise stakeholder groups for environmental, social and economically viable management of the world’s resources. Though they are rooted in business-as-usual, these inter-corporate platforms also stake out a moral legitimacy which goes beyond narrow self-interest, and which has the potential to emerge into society-wide governance.[7]

Dark side abuse of sustainability

The possibility of employee abuse of power increases once the traditional tightly drawn focus on shareholder interests is loosened and coordinating the interests of a wide range of stakeholders takes over.

At its most obvious, the dark side of self-interested executive behaviour ends up in financial corruption, as in the case of Enron in 2001. Less obviously, the dark (or grey?) side occurs when employee self-interest fails to rise to the sustainability occasion. Thus companies fall short in opportunities for multi-stakeholder conversations between businesses, governments and citizens: for example, for securing whole system, catchment level approaches to improving water quality; or for making living wages precompetitive; or for ensuring that one sustainability goal is not undermined by another.[8]

Making sustainability an indispensable part of the company’s policy and strategy

The sham of strategic ambiguity needs to be transcended for the sake of achieving full conscious incompetence. Acknowledging –  at the right moment – the company’s sustainability performance as incompetent can thus be highly meaningful, a major employee achievement. Unilever’s sustainability vision and Marks and Spencer’s green Plan A lead the field because they define big gaps between full sustainability and current practice.

• ‘Sustainable development’ has long (since its origins in the Brundtland Report 1987) been strategically ambiguous. It has a noble destination, the achievement of combined intra- and inter-generational environmental justice, but has not got on the right road because it has yoked the incompatible horses of environmental justice and profits together as equals. This has been accompanied by a tradition of research with a dismal – and inconclusively answered – question: whether sustainability leads to increased profits (assuming it does not, continued pollution is still not an option given risks like global warming). But today there are hopeful signs that research is moving on from this backwards-facing question to a new stage of acknowledging tensions and paradoxes.[9]

Once enough sustainability infrastructure is in place, the gaps between strategic ambiguity and full sustainability may be addressed:

• Sustainability can reduce profits, at least in the short-term, for example by adding the costs of engaging with stakeholders when drilling for gas

• Sustainability has to negotiate commercial landscapes which lock in market failure: for example there have been systemic reasons for the UK’s refrigeration industry’s continued use of HFCs even though they are 7,000 times more atmospherically toxic than carbon dioxide

• Sustainability encourages imitation of best industry practice – but this can reduce competitive advantage for individual companies

• The more sustainability meets obligations to future generations by lowering discount rates, the more it adds to present costs

Thus corporate sustainability – through greenwash, alignments, strategic ambiguity, the dark side – is often hollow, and the beneath-the-radar corporate chat which says so rumbles the rhetoric. 

Getting to the stage of corporately acknowledging this vacant sustainability space opens up the opportunity to mobilise such folk wisdom credibly. Coaching, particularly team coaching, could be invaluable for this.

Developing stakeholder relationships

After fully acknowledging sustainability incompetence, what then for leadership? How can capitalist multinational companies advance towards the end stage of conscious sustainability competence? This sustainable state will pay the price of ceaseless wakefulness because unconscious competence, the model for a sustainable pre-scientific society, is too dangerous for our technologically dynamic Anthropocene era.

As the company, perhaps assisted by coaches, climbs the ladder of awareness towards sustainability, the leadership problem increasingly becomes focused on the outside: market failure, landscape lock-in, and investors’ pursuit of immediate profits above all else. These factors explain the vagueness of later stages in models for big companies to achieve sustainability: examples can’t be found!

Moving towards conscious sustainability competence requires much more than a living company: i.e. a human community that keeps awareness of its identity alive through being sensitive to the surrounding world and testing new ideas while being financially prudent.

• No longer in the West is there a Protestant ethic – though there may be an Islamic one – which can legitimise the social welfare legacies of businesses. In the profits culture of late capitalism quoted companies are acutely vulnerable to venture capitalism and asset-stripping, as in US Kraft’s takeover of UK Cadburys in 2010

Yet systemic change towards sustainability is occurring. It makes itself felt through the influence of myriads of internal/external connections involving employees, contractors, competitors, consumers, suppliers, governments and other stakeholders:

• Out of the blue, as when a board member is questioned about melting icecaps by a grandchild being shaped by the nursery school curriculum (today’s ‘what did you do during the War, Daddy?’ question)

• Predictably, as in employment – companies like Nestlé need to recruit the ablest from environmentally concerned up-and-coming generations

In an overall context of incremental change towards sustainability, the company may yet sometimes have to react by leaping, or otherwise risk losing the initiative:

• Businesses may face a sustainability priority paradox in which they have to genuinely prioritise sustainability in order to survive commercially. For e.g. when BP ceased to be ‘Beyond Petroleum’, BP risked its position in the non-fossil fuel long-term of sustainable energy. The sustainability priority paradox resembles alignment, but in reverse because sustainability is no longer subordinate to profits.

• Otherwise businesses moving towards the green economy seems to be incremental (unlike Marxism’s previous great challenge to capitalism through all-or-nothing political revolution). Full sustainability challenges existing business-as-usual with gradual but radical reform through separating development from the absurdities of GDP-defined growth, and through advocating convergence and per capita GDP contraction in the most flagrantly resource-consuming world economies.

Furthering the tendency for companies to develop their stakeholder relationships is surely a crucial part of the leadership answer once sustainability incompetence is fully acknowledged. The next article/blog examines motivating stakeholder stories, narratives and mythologies which have not yet been considered in the sustainability discussion. [10]

Over many years I’ve seen how indispensable coaching can be for personal and group vision-formation. I wonder how this experience can best be brought into the development of companies’ sustainability visions.

To connect with Geoffrey Ahern:

Geoffrey Ahern is experienced in executive coaching and sustainability. APECS accredited and working independently for the past decade, he has been a Fellow of the Centre for Leadership Studies, University of Exeter and before that was employed for five years as an executive coach by Coutts Consulting Group.

After 2008 he carried out multinational corporate consultation on sustainability in association with the World Wildlife Fund/IUCN and became an Honorary Lecturer in sustainability at the University of Liverpool’s Management School. He has published widely including a second edition of the book of his PhD (LSE 1981) on an ecologically-oriented global movement.

Email: geoffrey@geoffreyahernconsulting.com.
Website: geoffreyahernconsulting.com

References and Footnotes
[1] (2010) www.businesspundit.com/the-top-25-greenwashed-products-in-america.
[2] Schaltegger, S, Hansen, E., Ludeke-Freund, F. (2015), ‘Business models for sustainability: Origins, present research, and future avenues’, Organization & Environment, 29(1):1-8; Esty, D. and Winston, A. (2009), Green to gold. How smart companies use environmental strategy to innovate, create value, and build competitive advantage, Hoboken NJ: John Wiley: 21; Geels, F. and Schot, J. (2007), ‘Typology of sociotechnical transition pathways’, Research Policy 36: 399-417.
[3] Wexler, M. (2009), ‘Strategic ambiguity in emergent coalitions: the triple bottom line’; Corporate Communications: An International Journal 14(1): 62-77.
[4] Goodpaster, K. (1991), ‘Business ethics and stakeholder analysis’, Business Ethics Quarterly, 1(1): 53-73; Ghoshal, S. (2005), ‘Bad management theories are destroying good management practices’, Academy of Management Learning and Education, 491): 75-91.
[5] Porter, M. and Kramer, M. (2011), ‘Creating Shared Value’, Harvard Business Review, Jan-Feb: 63-77, and (2006), ‘Strategy and society: the link between competitive advantage and corporate societal responsibility’, Harvard Business Review, 84(12): 78-92; Crane, A., Palazzo, G., Spence, L. (2014), ‘Contesting the value of creating shared value’, California Management Review 56(2): 130-153; www.nestle.com/csv.
[6] Schwab, K. (2008), ‘Global corporate citizenship: Working with governments and civil society’, Foreign Affairs, 87(1): 107-118.
[7] Scherer, A. and Palazzo, G. (2010), ‘The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance and democracy’, Journal of Management Studies, 48(4): 899-931; Brammer, S., Jackson, G. and Matten, D. (2012), ‘Corporate societal responsibility and institutional theory: new perspectives on private governance’, Socio-Economic Review, 10: 3-28.
[8] Cennamo, C., Berrone, P. and Gomez-Majia, L. (2009), ‘Does stakeholder management have a dark side?’, Journal of Business Ethics, 89(4): 491-507; andWalker, P. (2017), ‘Peace, justice and corporate strategy’, The Environmentalist (May): 26-28.
[9] Gao, J. and Bansal, P. (2013), ‘Instrumental and integrative logics in business sustainability’, Journal of Business Ethics 112: 241-255; Van der Byl , C.and Slawinski, N. (2015), ‘Embracing tensions in corporate sustainability: A review of research from win-wins and trade-offs to paradoxes and beyond’, Organization & Environment, 28(1): 54-79; Hahn, T., Pinkse, J. Preuss, L.. (2015), ‘Tensions in corporate sustainability: Towards an integrative framework’, Journal of Business Ethics 127: 297-316.
[10] De Geuss, A (1997), ‘The living company’, Harvard Business Review, 75 (Mar-Apr): 52-59; Santana, A. (2012), ‘Three elements of stakeholder legitimacy’, Journal of Business Ethics, 105(2): 257-265.