Some businesses will not survive the shift to a sustainable economy

Former Greenpeace executive director Paul Gilding explains why some unsustainable businesses will fail in the next decade

This interview first appeared in Eco-Business, an Asia Pacific based media outlet covering sustainable business

How has the world evolved in terms of building a sustainable economy?

PG: We’re in a new era of sustainability and corporate social responsibility. Up until now, for business leaders to be engaged in sustainability was kind of an option, that they can do it if they chose to. They can do it because it makes them feel good or because it would help their reputation. They didn’t have to engage in sustainability to be successful as business people. Whereas now I think we’re moving into an era where you do. Unless you engage in sustainability and understand that we are beginning a major economic transformation then you simply won’t succeed in business anymore. And that is a very different idea and that is the big change we’re seeing now.

We’re talking about a transformation of the economy, and when you transform economies, then some businesses win and some businesses lose. There will be large companies that need to cease to exist for us to become sustainable and there will be large companies that need to be creative for us to become sustainable.

ER: And are most multinationals engaged in corporate social responsibility?

PG: I think they are engaged in the conversation. They’re all talking about it, but most are not yet really engaged in it as being essential to business success – and that’s where the opportunity lies. 

ER: How will we be able to differentiate if they’re doing substantial work or just greenwashing?

PG: That’s a very important question and I think the answer is to look at whether they’re working sustainability into their products, or are they investing in sustainability? Are they changing the products they produce or how they produce them? Or are they just doing good things in the community? This is good to do but this is not a question of doing good things while you make money. It’s a question of doing good things in order to make money. Your measure of success has to be driven by it.

ER: What is the biggest obstacle to addressing these issues?

PG: The reason my work now is focused on the business community is because I think the business community is the biggest obstacle and the biggest opportunity. Unless we can engage business, then I think we will fail, because business is such a powerful force in society and so influential on government. But with business support, we can easily achieve what we need to achieve. The challenges we face are not insurmountable at all. They’re actually – not to make it sound too easy – achievable and businesses are a good mechanism to do that with. 

ER: In your widely acclaimed book, The Great Disruption, you talk about a global crisis and the changing economic landscape. Can you tell us more about this?

PG: Why I came to write the book and the recognition that I had was that we were not going to change as a society until there was an economic disruption, we would not engage on the issue enough as a question of responsibility, we would only act when the impacts were felt in the economy. Therefore, I looked around to understand what that could look like.

ER: You also talk about how this will bring out the best in humanity and how this is a business opportunity. Can you explain this and give us some examples?

PG: This is a very important question because people in this area tend to be very despondent about the prospects. They tend to be negative about how slow society is to respond and how it’s going to be terrible. I understand that, because that’s what science tells us, that the path we’re currently on is very negative.

But what people forget is that this is normal pattern for human behaviour. We tend to avoid acting as long as we possibly can. We tend to wait until a crisis is fully unfolding around us and then we respond dramatically. That’s fundamentally why I feel optimistic about the situation. I’m very confident that we are able to respond very quickly once we put our minds to it. 

When we look around at the economy today, to cite some examples, the solar energy industry is now booming globally. There are now multi-billion solar power companies in America and in China, which will be tomorrow’s Google or Microsoft or Amazon. And that is a very important example here because what it means so far is that the winners in the sustainability transformation will be new companies and old companies will not be able to respond fast enough.

That is what economic history suggests – that old companies simply fade away and new companies replace them, rather than old companies changing. Of course, there are some very old companies around like DuPont that’s been around for 200 years. But very often the case is these companies die and are replaced, that’s why markets and businesses are a good mechanism to drive the change.

Nobody is talking about ending the use of coal, or the electrification of every car in the world, or the need to have government intervention in the food system to ensure food security. But we should be talking about all these issues seriously.

I think some governments are doing significant things. China is a good example of a government that is waking up to the economic implications of doing things wrong. Germany is another good example. It has an aggressive programme to move to renewable energy. There are many good cases where governments are acting and are doing a lot more than others. Countries like Australia and America are being left behind in these areas.

ER: In climate talks, some countries are saying that these old nations who are responsible for most of the emissions should be responsible for the crises. Who should bear the responsibility?

PG: I think it’s a dangerous approach for the developing countries to argue that. It assumes two things that are wrong: first is that action is optional, that we have a choice whether to act or not, and secondly it assumes that acting is bad – but the evidence is emerging now in China and elsewhere that it is not just a necessary action, it’s a positive action for your economy. 

So I think this argument of ‘we won’t do it until you do it’ is slowing everyone down, which is bad for the global economy and security. The sooner we act, the cheaper it is to act.