To describe the achievements of John Elkington in the sphere of sustainability is almost a task of impossibility. He was one of the early movers in the space, the sort of Guru who saw it before it gained traction. It was in 1995, that he coined the term Triple Bottom line, put the intricacies together and offered it to the world. Described as the foremost authority on sustainability, Shashwat DC, sat down with him for a detailed interaction on how the ground is shifting on the subject of sustainability, what does the future portend and more importantly what is John’s view on CSR. Here’s the interview with the intrepid guru of all things green.
What is ‘Tomorrow’s Bottom Line’and how different is it from the triple bottom line?
‘Tomorrow’s Bottom Line ’is the theme of the new book that I’m working on with JochenZeitz, who used to be the Chairman and CEO of Puma. He is now co-Chair of The B Team with Sir Richard Branson of Virgin.
The background, as you may remember, was that in 2011 Puma published the first environmental profit and loss account. The idea was that this EP&L approach ultimately would be part of the full triple bottom line accounting process. Puma’s owner, the holding group Kering, formerly PPR, owns a broad range of fashion brands, including Gucci. By 2016, Kering plans to produce a set of environmental profit and loss accounts for each of the brands they own.
So for me, tomorrow’s bottom line is saying, “20 years ago when we came up with triple bottom line (people, planet, profit),the aim was to say to business leaders that whatever you’ve done, over the last 200 years or so capitalism, has been an extraordinary achievement in terms of value creation. But, at the same time, there are things that economists like to call externalities, including negative impacts on society and the natural environment. Such social, economic, environmental and governmental externalities aren’t much considered today, mainly because we haven’t yet internalized them.
So the triple bottom line was an attempt to say, “You should be thinking in multiple dimensions of value creation and destruction. You should be managing in multiple dimensions and you should be measuring or reporting in multiple dimensions.”
Can you tell us a little about how the concept emerged?
The Brundtland Commission (the World Commission on Environment and Development) report that was published in 1987 didn’t use the term sustainability as such, but it did speak of sustainable development—and the triple bottom line was implicit in its analysis and recommendations. It was already clear that there were three dimensions that needed to be measured.
The surprising thing is that many people assume that concepts like the triple bottom line, or shared value, surface more or less instantly, but the truth is that getting to these three words was a real struggle. A colleague and I spent 18 months trying to figure out a crystalized form of language. And when the concept finally came to me, pretty much in a flash, it seemed too obvious. Someone else must have thought of it. I remembered Paul McCartney of The Beatles saying that when he woke up with the tune of “Yesterday” in his mind, he thought he must have heard the tune somewhere. And I had the same feeling.I started to ring people up, just trying to find out whether somebody else had come up with it. And they hadn’t.
For me, the term was a conscious attempt to coin new business language, trying to get under the guard of business people. You could see it as something of a Trojan horse, trying to get into their brains, under their skins, giving them a sense that this was something that they wanted to play with and buy into.
Once business people started to use the language and commit to it to some degree, we could then stretch our definitions in ways that could stretch their imaginations and ambitions.That’s how it happened.
At the time, in the mid-1990s, we were working in the corporate reporting area and were developing a series of projects around environmental reporting. From 1996, we focused on sustainability reporting—and used triple bottom metrics to assess company progress.That really woke people up. There were a growing number of companies doing environmental and eco-efficiency reporting, and now they suddenly realized that this was going to be more complicated.
The following year in 1997, after two years of refusing to work with Shell, mainly because of the series of controversies they had been involved in around oil-rig disposal in the North Sea and human rights in Nigeria, we finally agreed to work with them. And the first project that we worked on with them was their inaugural sustainability report, which they chose to call, ‘People, Planet And Profit,’the term I had come up with two years earlier, in 1995.
The fact that an Anglo-Dutch company used the title was a huge advance. Go to Holland, for example, and you find that the three Ps are everywhere. Businesses use the language, government use it and many others are using it. But this wasn’t just about reporting, and it wasn’t just about achieving a balanced result across three bottom lines. Even then we were looking for breakthrough mindsets, technologies and business models that would help our economies on a more sustainable trajectory.
Did you ever think of copyrighting the concept?
Right in the beginning when we came up with the idea, we thought of copyrighting or trademarking it. We went through the process of thinking about it because we didn’t want it abused. But in the end we decided not to copyright it because we believed that if we took what would now be called an “open source” approach people would pick it up and play with it and others might even improve it.
When I first came up with the triple bottom line, people thought it was interesting and they certainly found it challenging. For some, it was almost existentially challenging. It wasn’t what people had been taught at business school,and it certainly it wasn’t what they were rewarded for in their balance score cards. So we still face the question of how we spur the evolution of integrated business models, and linked accounting and reporting procedures. The business schools have been lagging indicators of change in this space, but some are now spotting the opportunity and beginning to pile in.
You’re also credited with terms like, ‘green consumer’. Are we in a green-consumerism bubble? Is buying new stuff inherently unsustainable? And is green consumerism enough?
In 1984, I came up with the term “environmental excellence” and this is the time when Peters and Waterman had done a book called, In Search Of Excellence. And I found that there was not a single mention of the environment in that book. And so I wondered what would happen if we took what they were doing and grafted on the environment. The answer was that for quite a period of time afterwards, environmental excellence became a term that was used in the US oil and chemical sectors.
Then, two years later, I came up with the terms ‘green consumer’. And I started to think about how do you interest consumers? Because if you lecture them and you try and turn them into missionaries, it won’t work. So how do you make it aspirational, interesting, sexy? And that’s how the green consumer tag entered my brain. In 1988, we launched The Green Consumer Guide, which sold around a million copies and went in to 20 foreign language editions.The book—and the agenda—had a huge impact for a number of years. But it is clear that full-blown consumerism is intrinsically a pretty flawed social system. It breeds dissatisfaction, and advertisers play to that. Consumerism is not sustainable in anything like its current forms, That said, I would be the first to admit that I love buying things like books and magazines, and I have long been an admirer of the products turned out by companies like Apple—even if I have often felt acutely uncomfortable with their lack of attention to environmental issues.
Unlike many other concepts that have been coined or invented, the triple bottom line is something that has persistently stayed with us despite all the changes. Is it the emotional chord that it strikes with everyone?
Though I say it myself, I think it’s rather clever branding. It seems to me that a key part of what I do is to spread what Richard Dawkins calls ‘memes,’ the cultural equivalent of genes.And timing is very important in this, because even if you come up with the most brilliant memes, they may go nowhere.
There is a new emerging profession made up of people called chief sustainability officers who are trying to drive sustainability into the DNA of companies. How long would it take for companies to imbibe the ethos of sustainability, without the help of CSOs?
I am excited about the new wave of people who are surfacing in the top echelons of major companies. These are very bright, committed people. However, I look at CSOs as a transitional species.
So I think the idea of a CSO is an important trend, but I don’t think it’s necessarily one that is guaranteed to stay forever and I hope in some ways that it doesn’t, because I think sustainability is got to be mainstreamed in the business. Yet,if you ask my co-author Jochen Zeitz, who among other things has chaired board sustainability committees at Kering and Harley-Davidson, he says, “This is something that is here for at least 10-15 years.” Such people, whatever their role is labeled, will play a critical role for a long time to come because we’re dealing with such a complex and rapidly emerging subject.
How do you feel about Indian companies and their participation in the sustainability movement?
I haven’t worked with many Indian companies, except Ford of India and the Tata Group, and I have visited companies like Infosys. What I have seen is that some MNCs are bringing elements of what they do globally into India—while some home-grown companies are also now pushing the envelope of what’s possible.
You are well aware of the 2% CSR Bill. What are your thoughts on such mandates?
I think India is in a really interesting space with the Bill, but it worries me because every time you force people to do something, you put them on the defensive, and you have them running for their lawyers. So, while it’s potentially useful to have such a law, if it encourages business leaders in India to think differently, the first thing many people do is try to figure out how to break the law.So in that sense, my reaction to the Bill has been strongly qualified.
The 2% benchmark will have many different impacts and implications. People will read it very differently. Some people will say, “We’re in the business to create social value, so 100 percent of what we do is already social value.” Others will say, “Here’s an interesting new challenge—and some useful guidance on what we should be doing in response.”
Then finally, of course, I think it’s great that reporting is being recommended. It’s great that engagement with stakeholders and social entrepreneurs is being encouraged. However, government has a critical ongoing role to play, in terms of monitoring what’s going on, pulling together the information and using it to guide policy and market incentives to ensure the economy as a whole moves towards more sustainable forms of value creation. At the moment, though, I don’t see much of that happening in India, or in other BRICS countries.
In India we have mixed philanthropy and CSR. Do you think the new law will reinforce or change how we look at CSR?
There are those that argue that newish concepts like shared value replace CSR and sustainability. By contrast, I think shared value helps professionalise the leading edge of CSR. But it focuses on win-win outcomes, rather than the win-win-win (or triple dividend) outcomes we pursue in the world of sustainability. It also doesn’t help much when it comes to the win-lose outcomes that are inevitable when you are dealing with a dysfunctional economic system. The inevitable consequence of system change is that some people are going to be left with what investors call “stranded assets,” assets they can’t earn from or eventually even sell. Think of coal mines in a climate-obsessed future.
At the same time, we shouldn’t belittle what people are doing in areas like CSR and philanthropy. People like Bill Gates are transforming the whole field of what is increasingly called impact investment. He realized that rather than waiting until he died in order to have a foundation setup, he would start early, and bring to bear skills learnt in the IT sector. There is a growing amount of cross-fertilisation between the worlds of philanthropy, CSR, shared value, impact investment and social entrepreneurship, for example. India has the potential to be an extraordinary incubator and leader in this space, and the new law could help drive that along. As they say, watch this space!