“In the world of business and sustainability, John Elkington’s work soars above all — it is honest, practical, compassionate and deeply informed. Cannibals with Forks is a brilliant synthesis of his genius for cutting through the thicket of tough issues and producing elegant solutions that can be applied today.” Paul Hawken, Author, The Ecology of Commerce “John Elkington forthrightly and clearly conveys that sustainability, as a new value, will be the “price of entry” that society will demand for business success in the 21st century. I believe this is an essential message for all forward thinking businesses.” Deborah D. Anderson, Vice President, Environmental Quality Worldwide, Proctor and Gamble “The Triple Bottom Line is becoming an imperative. Environmental and social responsibility should beat at the heart of every business leader.” Anita Roddick, CEO, Founder of the Body Shop “Leading edge corporations must be moving up a gear, beyond eco-efficiency. The winners are driving up the sustainability curve and and enriching social capital. Those idling, satisfied with “Beyond Compliance”, will end up in the scrap yard. This book is the corporate citizen’s route map.” Patrick Thomas, CEO, ICI Polyurethanes “I commend this book. John Elkington has consistently both challenged us all to think differently and offered us a way to do so. The issue of how to define sustainability in day to day terms is one which all companies should face up to. There are no ready answers, but Cannibals with Forks provides us with a good compass. And it is both constructive and stimulating to read.” Rodney Chose, Deputy Chief Executive, British Petroleum “While not everyone would accept John Elkington’s assertion that most company boards are both deaf and blind when it comes to monitoring the emerging agenda on sustainable development, I suspect that almost all would benefit from a greater understanding of the issues he describes so well.” Sir Anthony Cleaver, Chairman, AEA Technology plc “The face of corporate environmentalism has changed dramatically in the past few years. Cannibals with Forks is a testament to that shift, and shows how sustainable development has become a priority for astute CEOs. Companies are increasingly using efficiency to achieve what John Elkington calls the triple bottom line: profitable operations, sound ecology and social progress. By encouraging business to be more resource efficient, to do more with less, efficiency will benefit society at large.” Björn Stigson, Executive Director, World Business Council for Sustainable Development “John Elkington has reached new horizons in bringing to light some key trends you may have missed so far. Cannibals with Forks tests best management practices against the sustainability imperative and, in so doing, challenges managers to discover and examine their companies’ blind spots. The result is a thought- provoking and practical guide to rising above the waves in the rough business seas ahead.” Claude Fussler, Vice President, New Businesses, Dow Europe II “Since the Brundtaland report, many have tried to answer the question: “what does sustainable development look like and how can we get there?”, Cannibals with Forks not only gives us a glance at how business could be practiced in a more sustainable society, it also identifies 7 key parameters that can guide everyone involved, not only business, in evaluating and improving their practices, behaviour and policy making for a more sustainable future. As John Elkington rightfully concludes, changes will be fast and those who can anticipate them will be surfacing as the shapers and creators of a sustainable society. The next challenge for John is, once the cannibals know how to cat with a fork, to try and identify the most wholesome and healthy diet to expand their life expectancy” Joke H. Waller-Hunter, Director, Division for sustainable Development, United Nations “This is not exactly the easiest agenda to have your finger on the pulse of — it’s fast moving, multi-layered and often invisible to all but the most tutored observer. John Elkington is second to none in that department, and whisks his readers briskly and confidently through an enormous range of issues, case studies and trends. In the process he immerses its in the detail whilst never once losing sight of the bigger picture — which all makes for indispensable, reading.” Jonathon Porritt “In this book John Elkington shows that he possesses sensitive antennae, for the aspects of sustainable development that are becoming increasingly important in today’s civil society. Indispensable reading for anyone concerned with the relationship between business and society.” Maria Buitenkamp, Coordinator, Friends of the Earth’ Sustainable Europe’ Campaign “John Elkington has done it again in helping those who care about how their enterprises an survive in the next century navigate what should be obvious routes for good business. In pulling the strands and tools together in a lively and convincing piece of work, the question is asked whether our business leaders are prepared for the local and global societal responsibilities thrust upon them by the revolutionary final decade of the 20th century. Working with and listening to the best and most farsighted should not distract us from the frightening challenge of convincing the many of’ the imperatives of sustainability.” Robert Davies, Chief Executive, The Prince of Wales Business Leaders Forum “Cannibals with Forks is a truly useful book. John Elkington pragmatically and convincingly spells out the agenda that business must deal with to survive and prosper into the next century. The book helps its answer the questions we must respond to if we are to keep our customers, attract the employees we really want, and keep the friendship and respect of our children and their friends.” Mods Øvlisen, Corporate Environmental Deportment, Novo Nordisk “In a time when doomsday prophecies sell best, John Elkington remains a well- grounded optimist. He argues that we can all do better in meeting the triple bottom line. This will demand new values, attitudes, concepts and tools. His powerful new book will help motivate the business leaders and executives who must now invest in innovation and help to drive the necessary transition.” Professor Ulrich Steger, Institute for Ecology and Business Administration, European Business School CANNIBALS WITH FORKS The Triple Bottom Line of 21st Century Business John Elkington CAPSTONE IV That’s a brilliant idea. But how could it possibly work in my organization? How often do you think as you read a business book that if only you could ask the author a simple question you could transform your organization? Capstone is creating a unique partnership between authors and readers, delivering for the first time in business book publishing a genuine after-sales service for book buyers. Simply email [email protected] to leave your question (with details of date and place of purchase of a copy of Cannibals With Forks) and John Elkington will try to answer it. Capstone authors travel and consult extensively so we do not promise 24-hour turnaround. But that one question answered might just jump start your company and your career. Capstone is more than a publisher. It is an electronic clearing house for pioneering business thinking, putting the creators of new business ideas in touch with the people who use them. Copyright © John Elkington 1997 First published 1997 by Capstone Publishing Limited Oxford Centre for Innovation Mill Street Oxford OX2 OJX United Kingdom All rights reserved. Except for the quotation of short passages for the purposes of criticism and review, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. British Library Cataloguing in Publication Data A CIP catalogue record for this book is available from the British Library. ISBN 1-900961-27-X Designed and typeset in 10/12pt Century Schoolbook and Futura by Kate Williams, London Digital processing by The Electric Book Company, http://www.elecbook.com/ Contents FOREWORD VII NOTES XII ACKNOWLEDGEMENTS XIII EXECUTIVE SUMMARY 1 NOTES 13 PART I 15 INTRODUCTION 17 NOTES 39 THE THIRD WAVE 41 NOTES 66 THE TRIPLE BOTTOM LINE 69 NOTES 94 PART II SEVEN REVOLUTIONS 97 MARKETS 99 NOTES 119 VALUES 123 NOTES 156 TRANSPARENCY 159 NOTES 185 LIFE-CYCLE TECHNOLOGY 187 NOTES 216 PARTNERSHIPS 219 NOTES 242 TIME 245 NOTES 272 CORPORATE GOVERNANCE 275 NOTES 300 PART III 303 SUSTAINABLE CORPORATIONS 305 NOTES 336 Contents VI MAINSTREAMING 339 NOTES 366 PART IV 369 SUSTAINABILITY AUDITING 371 NOTE 381 CODA 383 NOTES 391 APPENDIX 393 INDEX 399 FOREWORD “Is it progress,” the Polish poet Stanislaw Lee asked, “if a cannibal uses a fork?” I believe it can be, particularly in the case of corporate capitalism and corporate cannibalism. If this last phrase seems far-fetched, read this description of Microsoft’s founder, William Gates III, “Bill Gates eats competitors with the methodical determination of a corporate Pacman.”1 Gates, it is true, is scarcely renowned for his environmental or social sensitivities. But in our rapidly evolving capitalist economies, where it is in the natural order of things for corporations to devour competing corporations, for industries to carve up and digest other industries, one emerging form of “cannibalism with a fork” — sustainable capitalism — would certainly constitute real progress. The fork, sustainability’s triple bottom line, is explained in Chapter 4. Its three prongs are economic prosperity, environmental quality, and social justice. Cannibals With Forks identifies seven revolutions which are already beginning to transform the world of business and will help drive major corporations and leading economies towards these goals. The book, for reasons which will become apparent, is skewed more to the environmental dimension of sustainability than to the social or economic dimensions, but the integration of these different dimensions of the emerging political agenda will be a central challenge for 21st century business. And we will need to maintain our focus and drive to sustain this agenda through the inevitable cycles of economic growth and recession, company mergers and demergers, public enthusiasm and disillusion, government activism and passivity. Inevitably, a key part of the task will be effective stakeholder consultation. Larry Ellison, founder of the US software giant Oracle, showed the way when he took the unusual step of setting up a cyberspace polling booth on the Internet to canvas opinion on whether he should bid for troubled Apple Computer. Apple may be a Foreword VIII special case, but many of the companies discussed in the following pages have decided to consult a much wider range of stakeholders than would have been usual even a few years ago. Moreover, some are trying to work out ways of doing so on a continuing basis, not simply when in the throes of takeovers, mergers, or — as the recent history of companies like ICI, Hoechst, and Monsanto suggests will increasingly be the trend — demergers. In the following pages, I draw on firsthand experience over more than two decades with some of the world’s best-known corporations, national and international government agencies, and non-governmental organizations, as they have struggled to embrace key elements of the sustainability agenda and to internalize a growing range of economic, environmental, and social costs. Most of these companies have acted because they have had previous, painful experience of what can happen when they, or other companies, misread or fail to act upon a major new economic, social, or political agenda. But growing numbers have also responded because they scented commercial opportunity. Many of the case studies are drawn from companies with which SustainAbility has worked over the years, because these are the organizations I know best. Throughout, I will name companies we have worked with, explaining some of the things that have gone right for them and some of the things that have gone wrong. Alert readers will note that the geopolitical focus of the book is largely on Western Europe and North America, where many of the relevant trend first surfaced. But our ability to deliver longer term stustainability will also depend heavily on our ability to help switch on the capitalists, financial markets, entrepreneurs, managerial classes, and consumers of the emerging economies, developing nations, and less developed countries of the world. As I have mentioned, much of the work described in the following pages has been carried out through SustainAbility, the London-based-think-tank and consultancy founded in 1987 with the triple mission of foresight, agenda setting, and change management. It is interesting, however, to recall the problems we had with the name. For several years, my colleagues and I spent much of our time, whether on the telephone or at conferences, spelling out and defining the Sword for people who had never heard it before. Indeed, a recent university computer search suggested that our use of the word in this particular sense may have been the first in print. True or not, it was certainly among the first; hence our problems. Today, the problem is very different, given that many people think they know what “sustainability” means, yet define it in almost infinitely various ways. Perhaps surprisingly, business, initially in the form of a few leading companies, has been at Foreword IX the cutting edge in terms of working out what sustainability might mean at the level of a product, a process, a company, an industrial sector, or even an entire economy. We have worked with many of these pioneers in depth and often with extraordinary mutual candor. As a result, we know what it takes to switch a company on to this complex agenda, and we know many of the barriers which then need to be surmounted as the company struggles to make business sense of the sustainability agenda. I first tried to work out what sustainable development might mean for business in the early 1980s following the publication of the 1980 World Conservation Strategy.2 As a cofounder and later managing director of Environmental Data Services (ENDS), I was involved in efforts to bring together leading companies with public sector agencies and non governmental organizations. But this was still a very different world. When, in the wake of the Bhopal disaster, I sat down to write The Green Capitalists3,’ the Berlin Wall was still standing and stood for several years more. The Soviet Union was more or less intact, Eastern Europe still under its thrall. Yet the broad shape of the future was already clear. Capitalism, in its many forms, was the wave of the future. But then so, the book concluded, was sustainability. The Green Capitalists, which ended with a perspective by Tom Burke, who went on to advise three consecutive UK Secretaries of State for the Environment, was first published in 1987. That year also saw the publication of the World Commission on Environment and Development’s report Our Common Future,4 which brought “sustainable development” into the vocabulary of international politics. “Perhaps, what we are seeing is the emergence of a new age capitalism,” Tom concluded on page 252 of The Green Capitalists: “appropriate to a new millennium, in which the boundary between corporate and human values is beginning to dissolve. It is now clear from the results who won the nineteenth-century argument about capital and labour. Socialism, as an economic theory, though not as a moral crusade, is dead. The argument now is about what kind of capitalism we want.” We were interested in the central role of governments, but the real focus was on the emergence of a new breed of “green capitalist” (an oxymoron for which I must accept responsibility), which we saw as an enormously hopeful trend. A key message was that unless, and until, the environmental community learned to work