Sustainable Business

It has become fashionable to pitch sustainable business practices recently. One wonders if there is a profound understanding of the concept, or if it is just the catch-phrase of the new millennium. Perhaps we should cut to the heart of the matter. We are all discussing symptoms instead of the disease. This is because it has become politically incorrect to discuss the derivative cause. In fact, most pundits are not even conscious of it. To put a find point on it, earth can no longer support its population of humans. There are too many people. Every other issue currently being debated is a direct symptom this simple fact.

Why do I say this? There are two billion people on earth who do not have potable water. Over 1.4 billion humans live on less than $2.00 per day. There are roughly 800 million people on earth staving to death at any point in time. Over 700 million people in China live in severely degraded air and water environments. Over 100 million babies are born every year; the majority of them in Developing and Third World Countries. Over 50,000 square miles of tropical deforestation per year is caused by population pressures in Third World countries. Over 40 million humans worldwide have AIDS; usually in countries with no means to stem the flood of new infections. Over 4 million babies die every year in Developing and Third World Countries. And at the tip of this litany of pain, over 250,000 children are killed every year in forced participation in wars around the globe. Ours is dysfunctional world under severe stress.

It has also become fashionable to decry past alarmists regarding overpopulation because of declining birth rates in Developed Economies. Western pundits have noted that rich people have fewer children. How profound. This ignores the facts above, and betrays a vast ignorance of how one third of humanity lives – in grinding pain and poverty. This is simply not good for business. So the question becomes, “Can a business afford to ignore the human condition?”

If your business plan is premised upon, (1) continuously leveraging cheap labor in Developing and Third World Countries; (2) accessing cheap depletable resources in Third World countries without regard to environmental impact; and, (3) a consumer business model based upon endless expansion of outlets rather than profitability per unit; then your business model is not sustainable. It generates short term profits at the expense of long term stability. One need only look at the Russian oil oligarchies to see an extreme example of this point.

Concerns about Global Warming pale beside the wrenching conditions that a third of humanity is forced to endure. A simple look at the pressures worldwide on basic commodities proves the point. If all humanity were to succeed in raising their standards of living to Western norms, we couldn’t collectively afford the energy bill. Or to put it another way, there isn’t enough fresh water on earth in the right places right now to sustain the average Western standard of living for all humanity.

The answer to this is not to dumb down the Developed World’s productivity. The usual red herring is to decry the United States as being the world’s largest user of energy for example. But when one factors in US productivity as the quotient over energy usage, the US is one of the most productive and efficient nations on earth. The answer instead is to slowly and intelligently nudge the population of humans into balance with what the earth is capable of supporting.

It does not matter whether the cause of all this pain and poverty is human greed, or inefficient distribution of assets. The end result is the same. Until we bring the population of humans in balance with the capacity of earth to support them, we are doomed to our present gross inefficiency of resources; a world that wastes fully one third of its human resources and all that means in the inefficient distribution of energy, goods and services.

The purpose of a sustainable business then is to reach a balance in its delivery of energy, goods or services to stable populations of consumers; earning a profit for its owners while reaching an realistic equilibrium on the availability of raw materials and the realistic cost of labor required to accomplish the task.

Richard Wottrich