7gen Bloc

Our Game Plan Summit meeting of leading sustainability thinkers has begun. It's absolutely remarkable to have all these extraordinary people in one place working together. The brain power in the room is palpable, and it's a very hopeful thing to see it so focused on things that matter so much.

To open the summit, I spoke for a few minutes about the challenges ahead. Here's what I said:

Seventh Generation has spent 21 years creating a model for the possibility that corporate responsibility represents. And we have built a successful model that represents this new possibility. We have taught and influenced thousands of other business. We have provided a business case that supports the argument that sustainable business can generate returns that far exceed the returns of the average company. And yet, sadly, the world is little better off. In fact, by most measures, things have consistently moved ever more quickly in the wrong direction.

I was giddy with hope back in November when Barack Obama won the election. I believed that we stood at the edge of the positive change that was so desperately needed. This was the time we had been waiting for. An opportunity that I believe arises only once in a generation.

Today, seven months later, I am more deeply concerned than ever. More cynical. Not hopeless, but I have lost the boundless excitement and the sense that the future I had hoped for was just around the corner. While we are moving in the right direction under our new leadership, making positive changes from climate change to credit card debt, by every measure our progress falls far short of what is needed. The progress we are making as a result of our new political leadership is incremental at a time when revolutionary change is needed.

Our political and economic structures and systems, governed by largely invisible powers, ever more dangerously concentrated, will not change direction willingly. We will have a little less of what is bad, we will be on a slightly more positive trajectory, but it seems abundantly clear that our financial system will not be forced to restructure in a meaningful way. Global climate change will bring devastation upon the planet that may be delayed by a generation, but will come nevertheless. We will not end up with a new educational system that delivers the talent required to lead us toward the world we want to leave to our children.

This is not a condemnation of the new administration, but a sad recognition that the current incremental and highly compartmentalized change that is so pleasing after eight years of a world led by Bush and Cheney is simply not adequate.

I have sadly concluded that both the new administration and the field of corporate responsibility will fall far short of generating the change required to create a sustainable future.

Today we truly face, as Francis Fukuyama said, "a systemic crisis, one in which an old order of political economy has been shown to be both unsustainable and immoral." Many see evidence that a dangerous imbalance in the relationship between business and government grew gradually over the past thirty years. [1]

So what is to be done? How do we seize this moment in history to make the bold, lasting, and fundamental change that is essential to avoid the profoundly painful events that are certain to unfold if we don't?

First, we must reframe the challenges we face, and approach them not from the compartmentalized perspective with which we tend to frame and separate all our many problems -- from climate change and declining fresh water resources to the obsessive accumulation of stuff and the twin evils of poverty and hunger -- but from a systemic perspective that attempts to identify the common root causes of all of these symptoms of an overarching disease. Here is what we need to focus on:

1. Shared Purpose vs. Siloed Interests
The economic crisis, the energy crisis, the water crisis, the food crisis, the security crisis, the leadership crisis, the healthcare crisis, the educational crisis, the climate crisis. You name it. The crisis conversation is happening all over the place. What's interesting is that each of the aforementioned crises has its own discourse, its own NGO group (each working with a single-issue mindset), its own conferences, journals, websites, funding mechanisms, programs, and so forth. While all these single-issue groups of change-makers engage in well-intentioned work by mobilizing action for their respective crisis symptoms, there seem to be, by and large, two missing pieces: one, a discourse across these silos about how all of these issues are interconnected, and two, a discourse about the systemic root causes that continuously reproduce the whole cluster of crises mentioned above.

We must rapidly evolve from a world where millions of single-issue groups and organizations compete for resources and attention to a world that begins to unite them in the common pursuit of a better future for all. One cannot expect each group to let go of their individual concerns, but it is essential that we help them shift their perspective and begin to view the world though a different lens, a lens that allows us all to see that our only chance of lasting success is through a greater focus on what unites us, rather than what divides us.

We are squandering our passion and willingness to help. In my own world there are dozens of groups representing progressive business, yet they never speak with one voice, agree on priorities or pool their resources. To change this paradigm will require a major shift in consciousness.

Such a shift is not impossible to imagine. In some places, groups have already come together in common cause. The Green Group, for example, has united the environmental community on global climate change policy. Multi-stakeholder coalitions have made impressive progress on sustainable palm oil and coco.[2]

2. Money and Politics
One could argue that our political process remains primarily an extension of money and the power it confers into governmental affairs. Until we can separate money and politics, we will never have a political process that acts in the best interest of all stakeholders. Publicly financed elections are a first and essential step.

3. Full Cost Accounting
Our current system of pricing products and services ensures that society perpetually makes poor choices. Until we remove the ability to transfer the cost of externalities from business to society, we will never willingly make choices that are aligned with the best interest of future generations.

By mispricing both risks and consequences, we encourage corporate decisions that are at odds with the long-term interests of society.

The same holds true for the metrics that calculate our progress as a country. By adding the "goods" and the "bads" together on the same side of the ledger (our Gross National Product) and not charging ourselves for the depletion, destruction or diminished value of natural resources, we confuse economic activity with progress.

4. Ownership and the Purpose of the Corporation
Business is consistently cited as the most powerful influence on the planet. In the future it will become even more so. We must repurpose the corporation to benefit society and all stakeholders.

Today corporate owners are incentivized to single-mindedly pursue the short-term maximization of financial gains. Whether it is how we tax capital gains or pay CEOs, we have institutionalized incentives that value the exact wrong type of behavior. There is a total disconnection of purpose between money managers (Wall Street) and capital providers (pension funds and individual investors). Professional money managers manage money to maximize their economic interests at the expense of the interests of those that provide them with capital.

Employees create value in which they maintain no ownership, thus concentrating wealth in the hands of stockholders.

5. Shifting Values
This is an unprecedented moment in history. The disruption, uncertainty, and reordering of our economic life will lead to new worldviews, marked by an unfolding revolution in social values and behavior. Though greater consciousness of the potential perils and opportunity at our doorstep, we must insure that values shift toward creating real and lasting value for all, rather than a world filled with an abundance of artifacts for the few, ensuring a dismal fate for us all. This shift in "consciousness" leading must ensure the understanding of the essential nature of five values:

Quality vs. quantity
First and most importantly we must simply buy less stuff, but what we buy must be made to last, leaving the smallest possible footprint behind.

Long term vs. short term
Driven by concern for our future generations as well as the quality of our own, we must ask, "What are the long-term implications of my every decision?" What are the unintended consequences that only a systems perspective will reveal?

Community vs. individualism
What's in it for us, not just what's in it for me? What is best for the whole? Where are "my" interests aligned with "our" interests?

Meaning vs. matter
Unable to take anything in life for granted we must decide what really matters and is worth holding on to. Only in meaning will we find lasting value.

Responsibility required
As greed and selfishness jeopardize our future, we must accept nothing less than institutions that represent real responsibility. Transparency is required as only "you" can judge whether "I" have fulfilled my responsibility.

As President Barack Obama said in his inaugural address in January, "The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on the ability to extend opportunity to every willing heart -- not out of charity, but because it is the surest route to our common good."

[1]Defining Prosperity by Philip Auerswald & Zoltan J. Acs; The American Interest, May - June 2009
[2]The Blind Spot of Economic Thought: Seven Acupuncture Points for Shifting Capitalism 2.0 to 3.0 Paper prepared for presentation at: Roundtable On Transforming Capitalism MIT, June 8-9, 2009 by Otto Scharmer