BURNING QUESTIONS ABOUT SUSTAINABILITY
Edith Callaghan, Graham Daborn
Vol. 35, Issue 4, Dec 2005
“All the lessons of our educational history suggest we are only capable of increasing specialisation, not decreasing it.”1
Specialization, in which companies arise to fill highly specific niches, leads to diversity in the corporate sector as a whole, something which is commonly seen as beneficial for stability of an economic and social system. But specialization may also lead to vulnerability: if the need for the product vanishes because of changes in technology or the marketplace, the producer is likely to go out of business. As Ludwig von Bertalanffy long ago pointed out,2 there are interesting analogies between the dynamics of human organizations and those of natural ecosystems: diversity of species or organizations favours stability for the system as a whole, but results in individual failures (extinctions) if the habitat or market demand changes. How then does one work to achieve sustainability in a region if the primary dynamic forces promote the creation of separate, specialized entities when external factors (e.g. global climate, environmental awareness and policies, and market forces) are undergoing rapid change? In a competitive environment, how can the successful strategies of the most resilient organizations (the leaders) be transferred to those who follow (i.e. the peloton)? These are some of the questions addressed in a regional conference of the Greening of Industry Network,3 hosted by the Arthur Irving Academy for the Environment4 at Acadia University from October 20-22, 2005. This international conference, entitled Global Shifts and Regional Development: Innovating for Sustainable Energy, Agriculture, and Finance, examined the roles of the energy, agriculture and finance sectors in helping regions move toward a sustainable future in the context of a globalized society. These sectors are often considered in isolation: for example, as sustainable energy, or as sustainable agriculture. Less often do we take the time to consider: 1) how these sectors have synergistic or conflicting effects on each other; and, 2) as energy, agriculture and finance operate on increasingly global scales, what the implications are for sustainability on a regional basis.
A second specific design element of this conference was a deliberate emphasis upon diversity among the participants. This is unusual. As we know, conferences commonly involve people talking to like-minded people, often drilling down into one specific area of concern, rather than looking at issues holistically. Involving the private sector, governments, academics, and NGOs to discuss broad aspects of sustainability can be difficult to do, but it is essential. The conference planners believe that, while specialization is necessary, it is through fostering diversity within organizations that the most interesting and creative answers to our problems will be found. Out of 60 conference participants, 34 were from academia (students, researchers and professors), 13 were from the private sector (including several presidents, vice presidents and CEOs), 11 were from governments, and the remainder from three NGOs. The conference was designed to facilitate discussion of topics among participants and encourage respectful challenges to current frameworks and ways of thinking. Implicit in the discussions was a fundamental interest in environmental issues, and the manner in which corporations are addressing environmental effects, resource management and conservation concerns. In some sessions, the Chatham House Rule prevailed. During the conference, plenary panel discussions addressed specific issues; between plenaries, conference participants were divided into mixed working groups to discuss presented papers and assigned questions related to plenary presentations.
We made a special effort to showcase examples of some innovative enterprises through a series of case studies. These case study presentations came from two Maritime-based, family-owned corporations with worldwide interests (Irving Oil and Minas Basin Pulp and Power Company Ltd), a major US-based international corporation (Smithfield Foods), and a local town (Bathurst, New Brunswick). Although different in many respects, these are examples of leaders in environmental and social action, exhibiting commitments to quality, sustainability and to their employees.
Invited speakers included: Kenneth Irving, President of Irving Oil Ltd. (NB); Hank Schilling, Managing Director, Environmental Support at GE Energy Financial Services (Conn); Scott Travers, President and COO of Minas Basin Pulp and Power Corporation Limited (NS); Dennis Treacy, Vice-President Environmental, Community and Government Affairs, Smithfield Foods (Va); and Mark Joyce, Associate Director and Senior Policy Advisor, Office of Cooperative Environmental Management, United States Environmental Protection Agency (Washington, D.C.)
Several related questions surfaced frequently during the course of the conference: Are we really making progress in addressing global changes, or merely rearranging the deck chairs on a sinking ship? What really is the problem of sustainability? Is the ecological crisis (if you believe one is here or coming soon) associated merely with products and processes, or rooted in more fundamental ways of living and thinking? Who is responsible for moving us ahead? Does how we define ourselves, and remain within or reach across personal or organizational boundaries (us versus them; me versus you) inhibit or promote sustainability? And, does our current educational system prepare children and young adults to address the needs of a sustainable society?
Each of these questions is complex enough to warrant a thesis on its own. In the remainder of this brief essay, we will address the question of progress.
Progress toward a sustainable society & ecology…
Are we making progress toward a sustainable society and ecology? Obviously, volumes have been written on this topic. For simplicity’s sake, this general question was divided into three parts: 1) Is there a problem? 2) Are these problems being addressed? 3) Are these efforts enough?
Is there a problem?
The balance of evidence and consensus in the workshop suggests, yes – there are many severe ecological and social problems that place us in a state of pending, if not outright, crisis. Rainforest and wetland destruction continues unabated; many fisheries are near to collapse or are gone already; waters across the globe are contaminated with wastes that threaten existence of humans and ecosystems; the numbers of the very poor and very hungry are rising (not only in developing countries),…and so on.
At present, climate change is treated as the most pressing problem. The consensus is that the global climate is changing dramatically and a number of ill effects are anticipated: erratic weather patterns, severe storms, melting of glaciers and ice caps, sea level rise, increased drought in the major grain-growing areas of the world, etc. Of course, the effects of climate change itself are not uniform over the globe. In some regions, such as the Arctic, it is expected to be severe, and whole scale changes appear to be already under way. In western Canada, warming and drying is anticipated to be progressive over the next decades. In the Atlantic region, the forecasts are for modest, and possibly insignificant, physical change, because the maritime land climate is so strongly moderated by the surrounding oceans, and their buffering capacity might well diminish the direct effects of global warming. Does this mean that Atlantic Canada will avoid the effects of global warming? Probably not. Our knowledge of the oceans is currently inadequate to provide secure predictions: there are serious uncertainties about the fate of the major ocean circulation patterns affecting the North Atlantic – the Gulf Stream, the Atlantic conveyor belt, and the Labrador Current – that provide no confidence that the present climate change predictions for the area are accurate. Furthermore, the effects of climate change on global markets will inevitably have very strong effects on this region.
Global climate change may represent the most significant challenge that the world’s inhabitants have faced together; clearly, addressing climate change is in everyone’s interest. In relation to our conference, the three sectors of energy, agriculture and finance have roles both in effecting and being affected by climate change.
Are the problems being addressed?
During the conference we heard from several representatives of industry, NGOs, government, and academia, all of whom are working towards sustainability of their company and/or their community in anticipation of the effects of long term global changes. Presentations at the conference were only a small sample of many, many organizations and people throughout the world that are doing good things for the environment. Nonetheless, it is worth summarizing a few of these case studies below.
Minas Pulp & Power Company Ltd5: Located in Hantsport (Nova Scotia), Minas Basin Pulp and Power Company Limited was established in 1927, and operated a pulp mill on the Avon Estuary for more than six decades. Utilizing power and water mostly from its own reservoirs, the company has continuously focused on increasing efficiency of resource use. Like most pulp mills, waste products from the plant included some environmentally hazardous materials, but when environmental effects monitoring became mandatory in the 1990s, Minas Basin P&P became one of the first mills in the country to meet full compliance. Since 1996, it has undergone a major transformation from a primary processor of wood pulp for paper, to the largest paper recycling plant in North America. Instead of releasing wastes into the environment, the Hantsport plant now enables the diversion of more than 10 million cubic feet of paper from landfills each year, producing products that are 100 percent recycled. Maximum capacity of the locally-designed plant is 100,000 metric tones per year. While a major success story from an environmental point of view, for which the company has received regional and national awards, it must still live and compete in a tough global marketplace: paper prices have plummeted in recent years, and there is increased competition from new recyclers and alternative materials that affects the market in which it does business. The company continues to focus on efficiency: its present plans involve innovative technologies for the recapture and reuse of waste heat from the plant, and a minimizing of water use. As a specialized company owned by Scotia Investments Ltd., a family-controlled enterprise based in Nova Scotia, however, Minas Basin Pulp & Power Company Ltd. is strongly linked into a diverse network of companies that utilize its products and provide some of its resource needs. Increasingly, Scotia Investments is focusing on environmental innovation, with an array of companies that have complementary features and share commitments toward the minimizing of their environmental ‘footprint’.
Irving Oil Limited6: Irving Oil is a regionally-based oil company with a diversified and expanding presence that was established by K.C. Irving in 1924. One of a group of companies owned by the Irving family, which also include forestry, shipbuilding, pulp and paper, agricultural products, food and construction sectors, Irving Oil has been long recognized as a leader in the Canadian petroleum industry, particularly in environment-related issues. It was the first company to offer unleaded gasoline in Canada (1977), the first company in the world to have its gasoline endorsed by all of the major automobile companies (1997), and the first company in North America to produce ultra-low sulphur diesel fuel (a 97 percent reduction from the market standard). The new refinery in Saint John (NB) is Canada’s largest, producing 300,000 bbl of refined product per day. The company has received numerous awards for its environmental performance, including the US EPA’s Clean Air Award – the only Canadian company to do so. In meeting the challenges of the marketplace, Irving Oil is diversifying into other energy sources, including a liquefied natural gas terminal in Saint John.
Smithfield Foods7: Smithfield Foods of Virginia is the world’s largest pork processor and hog producer, with revenues (2005) in excess of $11 billion. Recently it has diversified into beef and poultry. It has wholly-owned subsidiaries or joint ventures in 9 countries, employing more than 50,000 people. The company has a highly developed stewardship strategy that covers animal welfare, and environmental and social issues. It was the first company in the industry to become ISO 14001 certified (2005), and no less than 47 of its plants have received Environmental Management Awards from the American Meat Institute. In 2005, several of the subsidiary companies received Governor’s Environmental Excellence Awards in Virginia.
Bathurst Sustainable Development8: BSD was originally established at Bathurst (NB) in 1995 by Fisheries and Oceans Canada (DFO) and the Environmental Trust Fund of New Brunswick. It became a non-profit community organization in 2000, and since then has led a number of local initiatives aimed at sustaining resources and the local community. Its activities have included energy and greenhouse gas emission audits, a study of properties suitable for solar assisted hot water heating, water conservation and urban transportation. As a community, they have accepted the “One Tonne Challenge.”
The common theme for all these case studies, repeated by speakers and in discussion groups, was the absolute necessity of taking a long range, holistic view of the company’s future, and of its capacity to adapt to rapid changes in market forces and environmental factors. In some cases, economic benefits were not easy to identify immediately, but decisions were nonetheless made “because it was the right thing to do.” These are instances where corporate ethics are not just words on paper.
Finally, are these solutions and initiatives enough for sustainability?
There are no road maps to sustainability: maps can only be drawn once someone has traversed the path – no society that we know of has (on a scale as large as ours) achieved social, ecological, and economic sustainability.9
We do, however, have many examples of societies that have collapsed due to their lack of foresight and/or understanding of and ability to deal with the forces around them. In his recent book A Short History of Progress,10 Ronald Wright argues that it is progress and a tendency for over specialization that ultimately led to the demise of many societies. Zealous reliance on specific technologies, resources, or the over-adherence to specific belief systems created an inability for societies such as Easter Island, Ancient Rome, and the Classic Maya to adapt to changes in the world around them. This inability to adapt led to decline and demise. From these arguments, then, follows the question: are we as a global society, and/or as many local societies, over-specialized or too reliant on specific resources that we do not have control over? Are we so adherent to a belief system that we are blind to important changes in our landscape, and/or unable to adjust? Taking remarks of the plenary speakers and workshop participants as our “data,” we cannot come to a definitive answer to this new set of questions, but we do find some interesting considerations.
To satisfy our energy needs in Canada, approximately 38 percent comes from petroleum, 30 percent from natural gas, and 12 percent from coal.11 Obviously, we have a high reliance on non-renewable resources, and the same is true for our neighbors to the south.
This reliance on fossil fuels is a problem for two reasons. First, greenhouse gasses that collect in the atmosphere and contribute to global climate change (discussed above) are primarily the result of burning of fossil fuels. Second, many resource economists suggest that we are now half way through our global supply of oil. Given that it has taken humanity approximately 100 plus years to burn the first half of our global supply, one wonders how long it will take to burn through the second. Over the last decade, significant progress has been made toward increasing efficiency of our use of non-renewable energy sources, thus decreasing the energy to output ratio. We have also made progress in terms of burning fuel in a cleaner manner. However, our consumption of energy has outstripped our savings from efficiency, and although the burn may be “more clean,” increased industrial growth has led to an increase (not decrease) in annual greenhouse gas emissions.
Factors that keep us tied to non-renewable energy sources and limit our advancement with alternatives include: a pervasive yet inflexible infrastructure, and a lack of holistic thinking.
The extent to which our social and economic infrastructure is dependant upon fossil fuels cannot be over estimated. Take a moment to consider how each activity you perform on a daily basis is supported by fossil fuels. Beyond the obvious cooking, heating or cooling your house, and transporting yourself and family to school, work, and other activities, consider: how did the products you use every day get to your front door? How did they get to the store? In what were they packaged when you purchased them? What are they made of? Consider the simple little girl’s dress-up doll. These treasures of girlhood fantasy are primarily (if not entirely) made of plastic, a petroleum-based raw material. They are primarily imported from China, Indonesia, or some such country that is across the world from the principal customers of these dolls. The factories in which these dolls are made are powered by electricity (China’s use of fossil fuels has ballooned over the past 20 years),12 and (hopefully for the workers), are well heated, cooled, and ventilated – again powered by fossil fuels. This is but one small example of our utter dependence on fossil fuels and specifically petroleum. To change this infrastructure would cost us dearly both in terms of socio-cultural expectations, and in terms of real money. Investments in new technologies are expensive at the best of times
The second problem, lack of holistic thinking, is summed up well by the comments of one of our conference participants, an expert in energy options in Canada: “The development of alternatives would be easier if environmental regulators could look at the whole picture instead of singling out one impact and opposing development on that account. For example, DFO’s duty is to protect the fish; the RAMSAR Convention protects birds; and the Nuclear Safety Commission is charged with keeping Canadians safe. None of them is authorized to consider the offsetting benefit of reducing greenhouse gas emissions. Regulatory decisions made on the overall effects of a project would make it considerably easier to develop more alternative capacity .”
Food and how it gets to our tables is often taken for granted in North America. Although we know it is rarely the case, many of us harbor quaint images in our minds of the noble farmer, honest and lean, out toiling with the earth. Many who live in sub-urban and rural areas have seen it: fields and orchards are sold off to make way for development13. Most of our food comes from medium to large factory farms where planting, spraying, watering, and harvesting are highly automated and a farmer is more likely to be found sitting behind a computer than out hoeing a field. Modern day agriculture is as dependent on fossil fuels, as it is on predictable and stable weather patterns – if not more so: virtually all agricultural pesticides, fertilizers, and herbicides are petroleum products.14 Thus, as the global climate and the energy markets convulse through gradual change punctuated by shocks, so too will the business of agriculture. In this respect, it could be said that our agricultural system has a dangerous level of over-reliance on fossil fuels for the production and delivery of their product.
Finally, market forces favour the efficiency of large scale operations rather than small, individually owned enterprises. Increasingly, our agricultural system has developed into large, specialized factory farms that cater to large retail organizations which derive their goods in a worldwide, competitive marketplace, and then “add value” to the product before selling it to the consumer. The production of food has steadily moved away from its customers; in North America, food often travels hundreds of miles before it reaches our plates.15
Not only has our domestic food production moved away from its customers, but as much of our manufacturing moves offshore, so does our agriculture. The Valley Region of Nova Scotia has one of the world’s best climate and soil conditions for apple production, however in most major super markets in Nova Scotia apples imported from across the border or across the sea are usually what the customer will find. Growth in apple production around the world has been slow or static, except in China where apple production has increased by 700 percent over the last twenty years.16 Relying on imported food for much of our nutrition, in and of itself, is not a bad thing. In fact, it could be argued that we have benefited in two major ways from global sourcing of agricultural product: access to a wider variety of food and nutritional opportunities than previously were available; and the risk of regional crop failure no longer carries with it the risk of regional starvation for the customer. These benefits, however, have not been seen by everyone. Despite economic growth and technological advances global hunger and malnutrition has continued to increase. The risk comes with the fragility of the system. Currently, the price of imported foods does not reflect the real cost of this risk, or the environmental costs associated with imports.
The Next question
In sum, the conclusion of this report is: 1) Yes, there are major global challenges ahead and upon us, 2) Yes, many organizations and individuals are doing great things to address these challenges, 3) No, this is not enough – we are still too specialized, too dependent on fossil fuels and complex systems of production and distribution. So, what do we do about it? Here is where educational institutions, and universities in particular, must play a vital role.
Business school students are taught very early on that to be a “success” in business one must focus on “core competencies.” While there is much talk about striving to increase efficiency and reducing waste, the purpose of such exercises in most cases is, ultimately, to bolster the bottom line and maximize returns for shareholders. This concept of business is very useful for individual businesses trying to win in the market game. However, it may not be the best model for managing a society with complex problems. Of course, there are a number of business schools that now offer courses on Corporate Environmental Management or Corporate Social Responsibility. We wonder if the following question has ever been seriously considered: is the traditional growth and return model of running industry one that can adequately meet the global social and environmental challenges we all face? Given that the risk of ecological and social crisis seems to be increasing, it is time that business researchers, teachers and students turn their brains to this question. Of course, business researchers will not be able to do this alone; they must partner with researchers from other disciplines such as biology, sociology, political science, etc.
If the answer from researchers to this new question is a loud and strong YES, then maybe we only have a bit of work to do to find our way to a sustainable future for our children and grandchildren. If the answer is No, then we will have a very large amount of work to do in designing new systems and ways of thinking. But, no matter what, we will be better off starting sooner than later.
Dr. Edith J. Callaghan, Assistant Professor, Fred C. Manning School of Business Administration, Acadia University.
1 C.P. Snow 1953. The Two Cultures. Cambridge: Cambridge University Press.
2 L.von Bertalanffy. 1968. General Systems Theory. New York: George Braziller Inc.
3 The Greening of Industry Network is an international association of researchers, business leaders, policy makers and activists dedicated to building a sustainable future. Through linked conferences, publications and communications, the Network creates new relationships, visions and practices for sustainability. The GIN conferences, 23 events in 12 countries around the world since 1991, comprise a unique experience and record of bringing people and the issues together for a big perspective on sustainable development, forging productive connections among research, policy and practice. GIN members receive priority in registration, reduced conference registration fee, and a subscription to Business and the Natural Environment published by Wiley, UK.
4 The Arthur Irving Academy for the Environment was established in 2004 to develop a diverse, trans-disciplinary program of scholarly activity, education and community activities, focused on environmental issues of local, national and international scope.
9 We understand that “sustainability” or “sustainable” implies in perpetuity. Here we do not mean that the human race would live on forever within our existing ecology. Change is inevitable. However, to the extent that we can control it, we refer to sustainability as our ability to contribute as little as possible to our own and our ecologies’ ultimate demise.
10 Wright, Ronald (2004) A Short History of Progress. Toronto: Anansi.
11 Natural Resources Canada, Statistics and Facts on Energy (http://www.nrcan.gc.ca/statistics/energy/default.html), retrieved on December 19, 2005.
12 See, Energy Information Administration, (http://www.eia.doe.gov/pub/international/iealf/tablee1.xls), retrieved December 19, 2005.
13 Understanding that actions often speak louder than words, conference planners accessed local products and services as much as possible. The welcoming reception was held at a locally owned fair-trade coffee house (Just Us Café); wine, cheese, jellies, coffee and pastries from local producers were served. During the second evening, wine donated from another local producer was served.
14 See, Ruppert, Micheal C. “Colin Campbell on Oil” (http://www.fromthewilderness.com/free/ww3/102302_campbell.html), retrieved December 19, 2005, and Pfeffer, Dale Allen “Eating Fossil Fuels” (http://www.fromthewilderness.com/free/ww3/100303_eating_oil.html), retrieved December 19, 2005.
15 See, localfoodworks (http://www.soilassociation.org/Web/SA/SAWeb.nsf/ localfoodworks_index.htm?OpenPage &charset=iso-8859-1 ), retrieved December 19, 2005.
16 See Nova Scotia Agriculture and Fisheries Market Research Report: Opportunities Evaluation of the New England Applesauce Market for Avon Foods Ltd., (http://www.gov.ns.ca/nsaf/marketing/research/appsauce.shtml) retrieved December 19, 2005; and United States Department of Agriculture, Foreign Agricultural Services, (http://ffas.usda.gov/htp2/highlights/1999/99-09 /china_apple/production.html) retrieved December 19, 2005.
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