THE FUTURE OF ECOLOGICAL LEADERSHIP

Posted by: Rajat Kumar, Head of Finance

Standard practices in industry and commerce today are largely the legacy of an ecologically innocent time, before we could assess such impacts, says Daniel Goleman, the author of Emotional Intelligence.

Visionary leaders tackle great challenges with grand consequences over long timespans. How long? Well, the current crises in the global economy and the consequent reshaping of capitalism will work themselves out over a decade or two. But the threats posed by the potentially inexorable ecological meltdown of our planet will play out over centuries.

That meltdown has direct implications for business leaders. The vast majority of industrial platforms, designs, chemicals and other habits of commerce were developed blind to their ecological impacts. The discipline that reveals these impacts is but a decade or two old: industrial ecology, which measures the manifold consequences of any product with an engineer’s precision. The main method, life cycle assessment, renders values for the environmental, health impacts of an item over the course of its entire life cycle.

Standard practices in industry and commerce today are largely the legacy of an ecologically innocent time, before we could assess such impacts. Now that we can measure those impacts, we need to rethink and reinvent almost every man-made thing. We need to innovate on a vast scale, finding new technologies that are at least neutral in their ecological impacts and, ideally, some technologies that replenish our debts to nature.

This leap requires going beyond today’s business practices of identifying inefficiencies to save money and involves creating a marketplace where ecological impacts of every kind become a basis for gaining or losing market share. Leading this change in the most basic habits of business and industry will require leaders with daring, great vision, remarkable persuasive and collaborative skills, and a keen business sense.

Such leaders can capitalize on an emerging market force: ecological transparency. Recent innovations in information systems make it possible to create databases of life cycle analyses that aggregate masses of information in a consumer-facing display that instantly compares the ecological impacts of any product versus its competitors.

Achieving such an ecologically intelligent future will depend not on the actions of politicians, but executives at the companies who take the lead in embracing radical transparency as a core business strategy. Going first will immediately raise the bar for everyone, not the least by alerting the shopping public to their new power to weigh ecological impacts along with price and quality in their purchase decisions. Needless to say, such companies will score enormously in reputation points.

But to get there, leaders will have to first sell internally a major shift in thinking about some basic practices of global operations today, such as exporting externalities like pollution to some distant supplier, and disavowing responsibility. Great leadership here will come with a corporation acknowledging — rather than denying or disowning — the realities of what’s upstream and taking responsibility to upgrade operations in ways that mitigate the worst impacts, and publicly making this the beginning of a gradual, but perpetual, upgrade.

Whichever company that turns out to be will, no doubt, have a great leader at the helm, one who will hold a hallowed place in the history of business in the 21st century.