Sustainability in Uncertainty?

At the beginning of September 2019, my son and I were admiring the view from the top of Snaeffelsjökull (“jökull” meaning glacier) in Iceland. Under our feet was mature ice, thousands of years old. The sun was shining, the sky was blue and it was bracingly cold. There was no lockdown, everything was free and open and we could travel, go to restaurants and everything was OK.

But was it really OK? “Ok” (“Okjökull” in full) was also the name of the first glacier in Iceland to be declared dead in 2014. In other words it melted – a direct result of climate change. At what was the base of the glacier is a plaque to commemorate its demise, embossed with the global average atmospheric carbon dioxide concentration when the plaque was placed there in 2019 – 415 parts per million. That was the highest CO₂ concentration ever measured in Earth’s atmosphere.

Oscar Wilde once said: “Everything will be OK in the end, and if it is not OK, it is not yet the end.” I believe in the last part; it is not yet the end.

The current short-term Coronavirus crisis puts pressure on sustainability while the long-term climate crisis gives purpose to it. Therefore, we should no longer only look at the well-known 3 Ps of sustainability but should add two more and think in terms of 5 Ps .

The 3 Ps of sustainability stand for the economic, ecological and social dimensions of sustainability – in other words for profit, planet and people. They are often referred to as the triple-bottom-line of sustainability.

On the economic side, the most sustainable target is to continue making a profit. This is not an unethical goal, but some business leaders might consider it an overriding one. If you’d have asked a CEO or CFO one or two decades ago what there 3 Ps were, many would have answered profit, profit and profit. If you were to ask the same question today, their answers should be – and in many companies, this is becoming the case more and more – profit, planet and people.

Lubricant companies need to continue making profits, of course, otherwise they are out of the game of making a sustainable difference or contributing sustainable solutions in the future, not to mention socially irresponsible and shedding jobs.

While continuing to have the first P stand for profit, companies must be aware of the ecological and social footprint they leave behind, while making money. This is where the planet and people dimensions of sustainability come into play. Creating not only economic but also ecological and social value for a company, its employees and external stakeholders is no longer an add-on or nice-to-have, but has become an integral part of the strategy of companies that want to be successful in the future.

Taking the lubricants industry as an example, footprint must be measured along the process and value chain of a lube manufacturer. This can be done by answering the following questions about raw materials, as well as finished products: “How sustainable are my suppliers and their supplies?” and “How sustainable is my lube production and are my lube products?”

As mentioned before, I propose two more Ps. The 4^th calls for an examination of the actual purpose of a company, which in my view must be, to provide sustainable value to its customers. The 5^th P is the pressure currently placed on sustainability strategies due to the uncertainty we all face these days.

This uncertainty can be managed by an interesting concept called “effectuation.” Effectuation is a method of decision making that is used during uncertain times and that has unclear goals. Classical management dictates that one can predict or plan for the future, while effectuation accepts that chaos and the unforeseen can and will happen but that the future can still be shaped. Metaphorically speaking, when friends turn up to your house unannounced in the evening, you feel obliged to feed them. Since the stores are all closed, you improvise the best you can with what is already in the fridge.

How does effectuation connect to sustainability? The answer comes with my 5 Rs: recover, rethink, reset, restart and reduce. Recover by means of effectuation from the pandemic. Rethink your business model. The current crises revealed to us through a magnifying the mistakes some companies have done in the past. Press the reset button, which many companies have been forced to do. Restart your business again in a more sustainable way, for example, by integrating the United Nations’ 17 Sustainable Development Goals, which resulted from the Paris Agreement of 2015 as a guideline and framework. Reduce resources and base your strategic thinking on repair, recycling, and reuse. This fosters a thinking toward the circular economy and cradle-to-cradle resource management, wherever possible.

The word sustainability is overused – in conferences, promotional literature for products, in year-end reports – yet there is still no common consensus on what it means in the business world.

So let me share my definition, which will form the foundation of these columns and throughout Sustainability InSite. I believe that, at its core, corporate sustainability means continuous improvement, in all fields along the process or value chain of the business, to create economic, ecological and social value for the stakeholders of a company, be they customers, employees, investors, suppliers, communities and government. This is especially important during this seemingly endless pandemic.

Thus, sustainability in times of uncertainty takes on another layer of meaning when we examine the word itself: “sustain ability” – the ability to sustain business. Companies are faced with the question: “How can we sustain the abilities of our people, our production, our products and our customers during and after COVID-19?”

The 5 Ps of sustainability, the 5 principles of effectuation and the 5 Rs of agile business can be applied in every industry, including the lubricant industry. How can this be achieved? Let’s find out next time.

Take care and,

STAY SuSTAYnable!