Gil Friend is a systems ecologist and business strategist, and is the CEO of Natural Logic, an environmentally-focused strategy, design and management consultancy. He writes a regular blog on issues of business and the environment. Gil has agreed to write occasional essays on sustainable business for our Sustainability Sunday feature, and we are happy to add his voice and perspectives to our site. Take it away, Gil:
[An expanded version of this article is posted at http://www.natlogic.com/resources/nbl/v13/n08.html]
Two weeks ago, writing about the European Union's product take back and product content regulations, I observed that many companies' sustainability initiatives are hampered by a pervasive and deeply wrong-headed assumption: that designing and delivering better, more efficient, less toxic, more recyclable products would necessarily cost more money and yield less profit.
Why does that assumption persist? Let me offer some perspective on both the barriers and the opportunities -- and how companies that understand the ecosystem drivers behind these new regulations can potentially get out ahead of them.
First, there's the great power of "we've always done it this way," with its impact on habits (of thought as well as of action), on cost analysis methods, on capital budgets. What's worse, changing what "we've always done" engages the tacit admission that "what we've always done" may not have been as good as we could have done. This is hard on the human psyche and murder on corporate lawyers.
Second, change is not easy, and is inescapably multi-dimensional -- change in technology, processes, roles, ways of thinking, and more -- can demand investment, in time and money, that conflict with other perceived needs.
Third, business is hampered by analytical methodologies that fail to accurately capture and value the full spectrum of costs and benefits. Boundaries of consideration are typically drawn too narrowly, whether to exclude factors that are considered "someone else's problem," or because it's simply easier to do it that way. Multiple benefits and synergistic impacts are commonly ignored, because familiar financial analysis tools commonly ignore them.
What can be done about it? Here are four steps to consider (expanded versions of each of these steps can be found here).
It's easy to make design improvements that cost more -- just add "green" criteria on to an existing design. It's more challenging -- and more profitable -- to integrate "green" into the design process, by including stakeholder expectations and the system conditions for sustainability into the design specification from the very beginning.
"Regulatory insulation" -- running so clean that you don't really need to care about the regulations -- makes far more sense than regulatory guesswork. "Numerous chip companies," Rachel King notes in Electronic Business, "are redesigning parts so that they contain no hazardous substances, so they'll be compliant no matter what the final requirements specify."
Which, as radical as it may sound, is in fact the most prudent course of all.
