The two faces of progress.
The romantic idea that man used to live in harmony with nature is nothing more than just that – an idea. He fully exploits every ecosystem he enters for his own benefit. Every door that progress opens, every convenience it brings, has its ecological price. That’s how it’s always been. Ecological imbalance is not a phenomenon of modern times. But neither is problem-solving. Recently, two developments have gained importance, giving new impetus to mankind’s ecological efforts and taking them to a new level.
On one hand, there is a change in values. Around the globe and in all social classes, the topic of environmental protection is a constant, from urban development to the financial sector to the attentive consumer – a balance of power as favorable as never before. Globalization and networking show that we are all in the same boat. We have all become stakeholders and share a great collective responsibility, a responsibility we are increasingly embracing. Refusers are threatened with isolation. The second big change comes from progress. Fortunately, it can always help us to stop or even reverse its own negative effects. The ideological rejection of any kind of progress, which ironically also comes from the romantic ecological movement, proves to be untenable.
And what effect does this have?
Ecology and social commitment are increasingly influencing the economy. In the past, it was purely financial criteria that determined the actions of companies. Today, however, environmental issues such as reducing CO2 emissions and social issues such as working conditions, combating corruption, etc., have become economic factors. The demand for environmental technologies is rising and the high-tech industry is creating innovations. Emissions certificates have established themselves as a currency.
The importance of CSR continues to grow as consumers, investors, politicians and business partners take a closer look. Since 2018, over 500 large, capital market-oriented companies in Germany have been obligated to submit a sustainability or CSR report. In order to be comparable, the key figures are based on international standards. Specialized rating agencies use this data to assess the CSR performance of listed companies. They can no longer avoid CSR management. Real economic and ecological survival become one.
A question of perception.
Of course, progress that further minimizes the ecological impact means that mistakes or setbacks stand out all the more and therefore poses a bigger PR problem for affected companies. In 1973, over one hundred oil spills occurred in the open sea worldwide. All the more attention was drawn to the Deepwater Horizon accident in 2010, when the number of incidents had reached a new low and was already below ten. And all this while the amount of oil transported doubled between 1970 and 2016. Economic growth and ecological progress are compatible.
Good Sites for Consumers.
In the past, the quality of a product or service and the price-performance ratio, i.e. maximum self-interest, were the most important factors to consumers. The shift in values towards more responsibility also allows consumers to look at other factors. An example of this, in which the digitalization (the progress) is reflected at the same time, are sites like The Good Guide, B Corp, JustMeans Insights and others. These provide comprehensive databases of thousands of products and their CSR-relevant rating. With the app from The Good Guide, making an informed purchase decision on the go is a breeze. Simply scan the barcode and the user can see how the product performs.
The top ten based on consumer opinion.
In 2017, a study by the Reputation Institute in Boston compared 170,000 reports from 15 countries in which consumers assessed the socially responsible actions of companies. Here’s how the companies ranked:
4. Walt Disney
5. BMW Group
7. Robert Bosch
8. Cisco Systems
Apple, Samsung and Volkswagen all slipped. The Cupertino group due to a lack of cooperation with security authorities during the investigation of a shooting and Samsung because of the thermal runaway of the Galaxy Note S7. Everyone knows the reasons for VW. The car company finished in 100th place.
Customer focus first, then trust.
It turns out that in addition to measuring hard facts such as CO2 consumption, the proportion of green electricity or the renunciation of child labor, perceived perception plays an enormous role. Whether this is always justified would have to be investigated. However, it cannot be ignored and regaining playful trust is a Herculean task.
Investors are the second biggest power on which companies depend. The term green investment has long ceased to be hype, but is still vaguely defined. In the broadest sense, it includes investments that have a direct or indirect positive impact on the environment. Here, too, the picture is similar to that of the consumer. At the beginning of capitalism, companies were solely capital-driven. Over time, corporate responsibility has grown beyond purely financial balance sheets. Today, companies and public funds invest in building renovations, the expansion of public transport, the promotion of renewable energies or reduce subsidies for fossil fuels.
China is setting examples.
Countries also act as investors. China is a pioneer in investing in ecological measures. Yes, China – the country in Asia with its 1.4 billion inhabitants. Although the country is still the biggest emitter of greenhouse gases today, radical measures are beginning to take effect in order to get rid of the polluted air and the reputation of being a filthy mess. The nationwide use of coal is limited, and it is forbidden to burn coal for private use. As well, the import of plastic waste from other countries is prohibited. The consequences: In the Chinese bond market, the issuance of green bonds is increasing rapidly. While these amounted to approximately one billion US dollars in 2015, by 2017 the figure had already risen to 37.1 billion. With the withdrawal of the US from the Paris Climate Agreement, Donald Trump leaves the field to China.
China is also the leader in terms of electromobility. Until recently, VW, Daimler and BMW had little reason to invest in alternative drive systems. Then the Chinese government simply banned the production of over 500 models. Tens of thousands of charging stations are being built, and Beijing and Shanghai are teeming with electrically powered vehicles. In January, the number of electric cars nationwide was over 700,000, and by 2020 it is expected to be five million.
The questions of the present for the future.
Companies that want to be economically successful in the future must ask themselves these questions:
Where do our raw materials come from?
How are they transported and processed?
How can energy be saved or generated?
How can a closed water circuit be created?
How can employees be sensitized and trained?
The sooner companies have answers to these questions, the better, because the legal requirements for environmental and climate protection will become stricter.
Since 2016, the gruene-startups.de platform has been networking and supporting green economy companies with the aim of promoting sustainable business ideas. According to Romek Vogel, one of the founders of the platform, every sixth start-up in Germany is already a »green« company, i.e. it helps shape change with its products, technologies or services. However, he criticizes the willingness of investors in Germany, presumably due to the unfulfilled promises of the solar industry. For the future, he believes that products and services that combine sustainability with a strong personal incentive will be the most successful. Much potential still lies in the area of recycling management and sustainable mobility. 2
No trust without transparency.
Perhaps the hardest ecological currency for companies is transparency. Those who still advertise today as »CFC-free« make themselves suspicious of greenwashing. The phase-out of CFCs has long been a legal requirement and not a special voluntary effort on the part of the manufacturer. Other variations of this questionable approach are, for example, the use of vague terms, comparison with even worse products, or lobbying to influence legal texts.The German car industry has not shown enough will to overcome the age of the internal combustion engine either, leaving Tesla and Co. in the running. All measures to reduce fuel consumption are offset by the steady growth of engines.
A thousand Times greater sustainability!
Or maybe the same words are used over and over again. The frequency of the word »sustainability« in US texts has increased more than a thousandfold since 1950. Cartoonist Randall Munroe took this opportunity and extrapolated this development into the future. According to the chart below, by 2109 each sentence will consist only of the word sustainability.
Densifications and dematerialization.
Two principles that have always characterized the progress of mankind and will probably continue to do so in the future are densification and dematerialization, i.e. disappearance. The main drivers are increased efficiency and simplification. Throughout human history, the principle of densification has made it possible to achieve ever greater yields from ever less material and energy. Using agriculture as an example, this means that special breeds have helped to deliver more protein, calories and fibers while taking up less land.
The principle of dematerialization allows us to put more and more functions into fewer and fewer objects. This is most evident in digitalization. One of the best examples is the smartphone, which has made entire categories of devices superfluous: phone, answering machine, alarm clock, calculator, dictionary, rolodex, calendar, map, flashlight, fax machine, compass, metronome, thermometer, level – all of the individual resources needed to do these things can be eliminated. The digital revolution turns atoms into bits. If a music collection used to consist of cubic meters of vinyl and later CDs, it can now be transformed into weightless audio files. The sharing economy also makes things disappear. Cars, tools, bedrooms and anything else that can be shared can be produced in fewer quantities.
A new ecology.
The enormous progress and the widespread environmental awareness show that all the demonstrations, protest songs and the Club of Rome were quite successful. The term neo-ecology has emerged for these changed framework conditions. The goals are the same, but we’re getting closer every day.
What can data and algorithms achieve?
With the help of data and algorithms, not only the financial but also the ecological costs of entrepreneurial activities can be calculated. Emission certificates are the beginning. It would be conceivable to use comprehensive real-time monitoring to quantify each step not only in dollars or euros, but also to include additional currencies such as CO2 footprints, square meters of rainforest, millimeters of sea level rise, etc. If the impacts were immediately known, this would further increase environmental awareness. Algorithms could then present alternative proposals for action that would be more compatible. It would also be conceivable to prioritize the various environmental problems in real time. If the rainforest problem is defused, the ozone layer rises in priority. Companies that navigate these regions in a particularly ecological way could receive incentives.
How far does the power of the consumers go?
It is becoming apparent that customers and users are increasingly designing »their« brands, because companies cannot avoid placing customer satisfaction and loyalty at the center of their efforts. Only then do they gain trust. The question of consumer power will, however, vanish into thin air if the amount of data is large enough and the algorithms are sophisticated enough. Then, AI will understand each person better than they understand themselves. Business and politics will then be at a crossroads and a new, great responsibility will arise. How is this power used? According to which criteria are decisions made? Does transparency play a role here as well?
About Marcus Lind.
Our author Marcus Lind has been suffering from excess observation since birth, lending to his penchant for philosophy, meta levels and questions that go beyond everyday life. Although he attaches great importance to clarity when writing, he is convinced that a text sometimes has to cause maximum confusion. In addition, he can imitate various animal sounds (often only of his own free will, rarely on command) and is familiar with sound synthesis. His advice to all readers: Not everything that looks like a vita is. On the side, Marcus Lind thinks and writes as a copywriter and conceptioner for big and small brands on marcus-lind.de.