Can Business Save the Earth?

With this summer’s heatwaves increasing the evidence of climate change and when, for the first time since the collapse of communism, capitalism is being challenged across the political spectrum, it is heartening to read a book that shows how private sector business can be a driving force for environmental sustainability – albeit only if it works in alliance with scientists, investors, consumers, activists, policy makers, and the public sector.

Science and capitalism built the modern world. Now, despite the antagonism of many green activists, we urgently need to deploy these two engines of human progress to address climate change and our broader sustainability challenges. However, according to Michael Lenox and Aaron Chatterji in Can Business Save the Earth?, we cannot rely on either innovators or free markets alone to force the pace. Rather, a broad set of stakeholders must become deeply involved if markets are to be ‘catalysed’ to create the disruptive new business models and innovative technologies we need.

With the US exiting the Paris Climate Agreement amid growing evidence of global warming, it is easy to see why the authors are concerned about the future. That they also feel optimistic at the same time is more surprising but is due to the enterprising spirit they have observed, through their teaching and research, amongst students, innovators, and entrepreneurs. (Lenox and Chatterji are professors respectively at University of Virginia’s Darden School of Business and Duke University’s Fuqua School of Business.)

The book defines ‘saving the earth’ as building a future where humans can flourish in a world that supports not only basic needs of food, water, and shelter but allows people to fulfil the potential of the human spirit. Clearly if this is to happen there will have to be some massive changes, taking account not only of how we perceive our human needs today but what they might be in the future.

Calls for conservation or more regulation are just not enough, real progress can only come through massive transformative innovation across multiple industrial sectors. But how can this be achieved? The key according to this book is to pull the levers that can activate the system to generate more disruptive sustainable technologies whenever “opportune or politically palpable.” The book focuses on the ecosystem of players needed to pull these levers – innovators; business leaders; investors; consumers; government policy makers, national and local; activists; media; foundations and NGOs; universities; and individual citizens – and suggests what each group can do to drive green change.

Free market enterprise may have caused many of the environmental problems we face. But markets are fundamentally just an expression of human demand. Even Hayek, the guru of free enterprise, called for sensible market regulation and for decades regulation was too lax. However, it is the needs and desires of all of us that really moves markets. The changes we need require people to demand better and better requires innovation.

The authors propose a model for innovation as a system – from technology push (innovators), through research development and commercialization (investors and managers), to demand pull (consumers), at the core, surrounded by a broad range of private and public sector influencers who can support the innovation process.

This timely book provides a unique and valuable guide to how, through a systematic approach, the efforts of many diverse players can be co-ordinated to address the complex challenges we face if business is to save the earth.

‘Can Business Save the Earth? Innovating Our Way to Sustainability’, Michael Lennox and Aaron Chatterji. Published by Stanford University Press, 2018, ISBN 978-0-8047-9099-4