Leadership 101 for Global Sustainability

Forces reweaving the fabric of society will create a whole new cloth by 2050.  Crystal ball gazing is risky business, but the consequences of long-established trends are hard to ignore. Compared to someone living today, a typical person living in 2050 will be more likely urban, wealthy, and paying higher taxes and utility rates, and less likely xenophobic, eating meat, living in large dwellings, or commuting great distances for work and shopping. You may embrace or detest that future.  What can you do to hasten, delay, or change it?  Begin by understanding the four mega-transitions creating it, and then equip yourself and your organization to be relevant.

Demographic Transition:  Urbanization is a defining feature of humanity’s development trajectory.  In 1800 less than 10% of people lived in urban areas, in 2000 it was 50%, by 2050 it will be closer to 75%. Asia has been urbanizing more rapidly than anywhere else for several decades, making the region home to almost half of all the world’s city dwellers. As world population increases to nearly 10 billion people by 2050—essentially adding another China and several USAs between now and then—most of the new people will live in an Asian city. In response to these pressures and opportunities, cities will double in size by 2050, adding 400,000 square kilometers of infrastructure: an almost unimaginable amount of utilities, roads, roofs, and markets. It took humanity until the year 2000 to build up 400,000 square kilometers of urban area. We will add that much again in the next 40 years. Almost as much existing urban area will be redeveloped; for example, over 40 percent of “urban” areas in the United States will be redeveloped by 2030. Fortunately, cities are major drivers behind both economic development and environmental conservation, so the opportunities for win-win gains are immense.

Environmental Transition: Through continued industrialization, modernization, and globalization, the biosphere will be undeniably humanized by 2050. Humanity must accept the moral responsibility of being the biosphere’s steward. Capacity must emerge to manage impaired ecosystem services.  Climate change, for example, will be fully upon us, so adaptive mechanisms will need intense development.  Water and other resources will be scarcer, requiring massive infrastructure investments. Agriculture productivity may more than double to feed more and more wealthy mouths.  Biodiversity, fisheries, and most every planetary limit will be stressed.  Sustainable development will require adaption and management rather than conservation and preservation.  While there may not be hard limits, we no doubt will learn harsh lessons by catastrophic failures of natural systems that may motivate water wars and climate migration.  We will have to learn from these past mistakes to re-engineer and restore ecosystem functions that support and sustain life.

Market Transition: By 2050, the global economy will likely be 4-times larger than today, dramatically reducing poverty and malnutrition, and ushering billions into a connected, empowered, global middle class. The opportunities and challenges for businesses are immense. Enticingly, the addition of billions of wealthy consumers creates countless new business opportunities. On the other hand, the additional demands placed on natural resources and systems will strain already stressed ecosystems services, especially water and climate. The consequent scarcities and fragilities create risks for business operations, risks that businesses are developing management capacities to address. [1]  Climate change, for example, increases the frequency of damaging frosts, 100-year floods, and similar events disruptive to business operations.[2]  The emergence of a new capitalism–sustainable capitalism—is underway.[3]

A raft of other powerful motivations exists for businesses to practice sustainable consumption and production.[4] Social media interconnectivity and a 24-hour news cycle can create brand damaging public relations fiascos if a company finds itself on the wrong side of an environmental disaster, threat to public health, or labor practices deemed unfair.  Also, investors and insurers are increasingly cautious of risky and unsustainable practices.[5]  Better employee recruitment and retention provides another motive for businesses to align themselves with the sustainable consumption strategy. Employees consider a company’s sustainability efforts during the job search, so businesses with meaningful CSR programs attract higher quality employees. As importantly, meaningful CSR programs affect long-term retention of great employees. Companies simply cannot afford to ignore or lose parts of the workforce.[6] Finally, there is polling evidence suggesting that a small but significant percentage of consumers will buy “green” products if the item is of comparable price and quality to alternatives.  Hence, sustainable consumption may provide a marketing advantage for some businesses.

Governance Transitions: The challenges of 2050 are larger and different than 20^th Century institutions can solve.  Government fiscal resources are curtailed, as is its moral authority.  Laws and policies, still effectively solving end-of-pipe environmental problems such as emission of toxic chemicals, are less effective at non-point, globally distributed challenges such as climate. New strategies, innovations, and institutional arrangements are needed. Cross-sector collaboration—partnerships among business, government, and civil society institutions—is required to solve 21^st Century challenges.  Institutions from each sector bring unique resources and moral authority to problems none of them can solve alone.

Implications

The four mega-transitions—demographic, environmental, market, and governance—are the reasons a typical person living in 2050 will be wealthier, more urban, less xenophobic, eat less meat, pay higher taxes and utility rates, live in smaller dwellings, and commute less for work and shopping.[7]

Simple demographic trends will make us more urban. The US became an urban nation when at least 50% of the population had moved into cities, sometime around 1900. Now we are 80% urban.  Europe urbanized even earlier and the rest of the world is following suite: almost a million people a week will be arriving in cities between now and 2050.  This is good news. Urbanization can improve economic and environmental conditions.  Transit oriented development, energy efficient buildings, and green infrastructure built between now and 2050 will reduce our need to commute, pollute, and waste time and energy.  Well-designed urban density is good for the environment; sprawl is not. The 50% of humanity living in urban areas in 2000 lived on just 5% of Earth’s land area.  Although their ecological footprints are much larger than the 5% of land they occupy, urban dwellers use less energy commuting, consume fewer utilities, and live in smaller houses than their rural and suburban counterparts.[8]  Some specific examples: NY city residents own fewer vehicles and used far less energy commuting than the average American.[9] The average US rural household consumes 27% more electricity than an urban household, in part because the typical rural single family detached home uses 88% more electricity than the typical urban apartment.[10] And, of course, households in dense urban areas don’t have lawns, with all the social environmental costs of turf management.[11]

We will be wealthier because of the comparative benefits of global trade.  By 2050, internal consumption within BRICS economies should sustain those economies: they won’t be dependent upon US or EU consumption.[12] The world will be more global, more interconnected, and have more distributed geopolitical power.  Sometime around 2030, the aggregate economies of BRICS nations will become larger in absolute terms than the G-6 economies.  USA will be bigger and richer than today, but no longer the only big fish in the global economy.  The implications are enormous: we will live in a multi-polar world, with vast wealth and middle class globally distributed.  The US will need to temper its advocacy of American exceptionalism and adopt a leadership role of first among equals.[13] Many countries and peoples will be exercising the responsibly of leadership.

Choice editing will make us want to eat less meat.  Marketers will use their considerable advertising prowess to make us demand things businesses can supply.  Meat, as currently produced, requires too much water and land to feed the entire world a meaty US diet.  Of course there might be factory meat, grown efficiently from a formula rather than inefficiently on a hoof, in which case meat may maintain its center place on the plate, but only if chefs make petri-dish filets a high-status food.   Meat is just an illustration, of course, of the choice editing and marketing behind business risk management efforts to focus consumer demand on products businesses can reliably and profitably provide.  Many foods, for example, will be genetically engineered to take advantage of specific climate and soil conditions and the food system writ large will have multiple redundancies in order to maintain supply in face of disruptions by flood, frost, draught, storm, and other increasingly powerful impacts of climate chaos.  Increasingly, the inputs into the production process will be grown or recycled rather than mined because the grown and recycled supplies will be cheaper and/or more reliable.

Climate chaos also will play a role in making us pay higher taxes and utility rates.  We will do so willingly, because we will stand for only so much disruption to our power, water, toilet paper, bread and basic food supplies.  Climate disrupted provision of basic services, utilities, and supply chains will motivate investment in redundancies and hardening of infrastructure.  The redundancies will be expensive, but we will pay for them, build them, and change our lives to accommodate them.[14]

What can you do?

To be relevant to the future being created, you and your organization must recognize that many of these 21^st century challenges and opportunities can’t be addressed with your current institutional processes, skill sets, or toolboxes.  Solutions to climate change, for example, lie in the solution-space between existing sectors and institutions.  To find and implement these solutions requires cross-sector innovation and leadership.  Business, governments, civil society (social benefits/NGOS), education, science, and religious organizations must collaborate in new and perhaps unfamiliar ways.  Some of the most effective, game changing innovations will involve collaborations among city governments, multinational organizations, and transnational NGOs. Cities are increasingly the centers of money and power.  City governments, responsive to the needs and votes of residents, provide services and compete with other cities for reputations that attract business, talent, and taxes.  Multinational corporations, responsive to client needs and growth opportunities, provision city residents with goods and services and assist in sustaining opportunities for market growth and risk mitigation (even helping with infrastructure).  NGOs protect the commons, including environments, histories, and civil rights.   The transnational NGOs such as TNC and WRI have massive knowledge networks and communities of practice that they eagerly develop and share for purposes of building problem solving capacity and empowering stakeholders in all sectors.

Each sector brings different strengths, limitations, and perspectives to be leveraged and combined for innovative solutions.  Businesses have money, if the solution generates or leads to profit.  They also bring perhaps the most powerful management capacity on earth.  They also control or at least influence major means of production that consume and degrade natural capital.   However, businesses are limited by a short-term temporal horizon, as short as quarterly profit statements and annual reports, with most all business decisions scrutinized using rates of return and interest rates.  Businesses also can be limited geographically by currencies, market preferences, taxes, and import/export regulations.   Governments contribute the regulatory power to develop, enforce, and constrain markets in ways that fix externalities and prevent a race to the bottom.  They can establish and enforce private property rights, define and protect the commons, and address the public goods and market failures that justify governance. They also can assemble powerful but bureaucratic management capacity to define and manage problems over large scales of time and space. But governments also have temporal and spatial limitations.   Election cycles create pressures to focus on short-term goals and avoid long-term problems.  Likewise, laws, regulations, and other manifestations of political power end at political boundaries, while ecological processes, people, and markets cross these boundaries.  Ignoring climate change and racing to the bottom are two potentially unpleasant consequences of the limited reach of governance.   NGOs (civil society and social benefit organizations) can focus on challenges and opportunities that transcend the temporal and spatial limits of business and government.  They also can assemble expertise and focus attention on problems and solutions that are not immediately financially or politically relevant/valuable.  They also bring moral authority that provides legitimacy and trust that a cross-sector partnership needs as part of its social contract.  NGOs are limited, of course, by funding and the strings/agendas attached to funding. They also can be idealistic and opportunistic, championing charismatic causes.  Institutions in all sectors—business, government, and civil society—can cling to outdated understandings, priorities, and values.

Do we need more science?  Integrative, multi-disciplinary science is necessary for charting a sustainable development trajectory to 2050, but it is not sufficient.  Yes, of course we need more climate science, sustainability science, and resiliency science.  We also need more and better resource sciences (water, soil, oil), social sciences (economics, politics, people), and the engineering sciences (agricultural, information, mechanical, and more recently biological).  And don’t forget the arts and humanities, and their powerful insights into the human condition. But all the understanding in the world won’t solve the challenges that lie ahead.  We need leadership capacity.

Leadership for sustainability occurs within complex social-ecological systems, but does not require a complete understanding of those systems. We can’t wait for complete understanding (if it is even impossible).  Leadership actions within a system as complex as climate require courage and opportunism.  Leadership requires being informed about the system, stakeholders and strategies, but never fully mastering them. It requires responding to black-swan events with leadership skills that give direction, alignment and commitment to the partial and evolving expertise of a diverse group of well (and sometimes not well) intentioned stakeholders.  An informed scientific understanding of the system is important, but a distant second to leadership.

Accept and embrace your responsibility for leadership.  Leadership happens by starting from where you are, assisting or resisting the future being created by the system in which you are embedded. Everybody can lead from where they are. Target a system you care about and can come to understand, perhaps one related to climate, water, resource flows, or poverty. Identify the stakeholders invested in that system and examine the strategies they use.  Stakeholders dwell in multiple sectors, at different organizational scales, possessing a range of power and influence. Stakeholders can be individuals, teams, organizations, partnerships, coalitions, and even institutions.   Help stakeholders find direction about a sustainability challenge, align their resources towards its resolution, and build commitment toward implementation.  Get key actors together, learn to hear and trust one another and your differences, then have the courage to innovate, fail, and try again. Most importantly, try again.

If you are student, what should you study?  The demographic transition suggests Mandarin, French, or Hindi might be useful languages to know, as China, Africa, and India will be sources of growth, opportunity, and challenge.   At a minimum, travel and learn how other people, organizations, and places see and solve 21st century challenges.  Given the role urbanization will play shaping the 2050 transitions, you might consider careers that influence change there.  Those of you studying business, take an ecology course, learn something about environmental systems and resource flows so you can integrate that understanding into business risk assessment models.  Those of you studying ecology, agriculture, hydrology, and other technical fields that engineer and manage ecological systems must keep up the good work, but make sure you integrate climate chaos into your thinking.  It is the game changer.  Also, seriously consider getting an MBA and helping businesses deliver on the promise of sustainable consumption and production.

Some of the most talented among us need to work in government. As a professor I’ve advised undergraduates for more than 25 years, mostly they inspire me, but the change in them that make me the saddest is the declining interest students have in working in government.  The anti-government zealots have gotten the upper hand in making government a bad word.  And, unfortunately, poor electoral politics have created dysfunction and gridlock confirming their worst fears.  But we need governance to solve the challenges we create; nothing else can prevent a race to the bottom, fix market failures, enforce agreed upon limits, define what is fair, and prevent the tyranny of small decisions.  Government by itself is not the solution, but government in collaboration with business and civil society is a very powerful force for good, if we allow it to function.

CONCLUSION
Forces reweaving the fabric of society will have created whole new cloth by 2050.  Will you like the future being created?  Decision by decision, day by day, these forces are redefining the opportunities and challenges that shape and constrain us.  Accept responsibility.  Be a leader from where you are.  The challenges are significant, and if not overcome, they will severely constrain humanity’s potential.  Conversely the opportunities will reshape us.  Just look how far we have come.  The future can be….amazing.