It’s time to reframe sustainability
Sustainability sounds tired? Let's reframe it along the lines of long-term thinking and posterity. The potential benefits are huge.
Over time, words can become tired through overuse. This certainly happened to “sustainability”. It’s a word that is used so broadly and in such different ways that it’s in constant danger of losing its meaning. So let’s reframe it. What sustainability is about really is the long-term viability of your business. It’s about what we leave to our children and grandchildren. And about creating value in the long term. About posterity.
There’s a quote attributed to Scottish poet Alexander Smith:
“A man doesn’t plant a tree for himself. He plants it for posterity.”
Here’s a glimpse of inter-generational responsibility that was beautifully captured in the Newcastle Weekly Courant (1837):
“He who plants trees upon his paternal estate, repays a debt to his posterity which he owes to his ancestors.”
An inter-generational contract
In Germany, there’s the notion of an inter-generational contract (Generationenvertrag). Its focus is the payment of pensions for the retired generation by contributions from the current workforce. Now, this is something every society has to organise, one way or the other. We need to redistribute the gross domestic product (GDP) of any given year among the whole population, from the newborn to the aged.
This redistribution can be organised in different ways, but the net result is always that a certain percentage of GDP flows to the elderly. It’s just that the overall amount, the method, and the distribution patterns vary. The inter-generational contract is about repaying a debt to our ancestors who brought us up, but it largely ignores our posterity. There is no equivalent of a pension that would flow to children or, rather, to their parents.
Posterity in a digital world
But before we get lost in the details, let’s elaborate on the concept of “posterity”. In 2004, Dorie McCullough Lawson published Posterity: Letters of Great Americans to Their Children. From the foreword:
“That so few of us write to our children any longer, that we so rarely write personal letters of any sort, is a shame. I think often of how little we will leave about ourselves and our time in our own words. Maybe some of the e-mail will survive, but I doubt it. How will future generations ever come to know us? Historians and biographers a hundred or three hundred years hence will have almost nothing of a personal kind to work with. Our story, consequently, will be a lot less interesting, less human, perhaps even impossible to write.”
While I still have many of the letters I’ve received over the decades, much of my e-mail from the early years (since 1994) is probably already gone. Some of it possibly still survives on CD-ROM disks somewhere, but I doubt they’ll be readable whenever I decide to access them. The digital world we’ve been busy building for most of our lives doesn’t give much thought to data from the past. The data that’s not commercially exploitable gets ignored and forgotten.
Leadership for the long term
But this observation only points towards a larger picture. We need to think and act for the long term. Big Tech definitely does this. To illustrate this point, just look at their leadership tenures:
- Since the return of Steve Jobs in 1997, Apple had only two CEOs in 24 years.
- Microsoft had three CEOs in 46 (!) years.
- Amazon was headed by Jeff Bezos for 27 years, who only recently handed over to Andy Jassy.
- Google employed three CEOs in 23 years.
- Facebook has the same CEO since 2004. That’s 17 years.
- Tencent has been lead by Pony Ma since 1998. 23 years and counting.
We can find similar patterns in German family businesses:
- Viessmann was headed by Martin Viessmann from 1992 to 2017. That’s 25 years.
- Würth was lead by Reinhold Würth for almost 40 years. The current CEO has been in place since 2005.
- Otto had three CEOs in 40 years (since 1981). Michael Otto served as CEO for 26 years.
- Dirk Roßmann founded Rossmann in 1972 and is still in charge today. That’s 49 years.
What the tech giants have in common with these family businesses is the long-term thinking and perspective. They are all in what Simon Sinek calls The Infinite Game in his book of the same name. They are thinking way beyond themselves and their own tenure and lifespan. There’s other data to support this thesis. In 2019, HBR came to the following conclusion:
The leaders on our 2019 list of the world’s best-performing CEOs demonstrate remarkable longevity. They’ve held their jobs for an average of 15 years, more than twice the average tenure of an S&P 500 CEO. They’ve prospered by outperforming their peers both financially and on increasingly important environmental, social, and governance measures.
Reframe sustainability: the ESG concept
Here we come full circle. Environmental, social, and governance measures – or short ESG – are closely related to sustainability. While the ESG concept is far from perfect, it’s clearly a step in the right direction. It puts long-term thinking investors and shareholders in the driver’s seat. We already see more money flowing into companies with better ESG records. This influx now allows the financial markets to sharpen ESG criteria and separate sustainability wheat from the chaff.
There’s no longer a contradiction between financial or economic success on the one hand and meeting the ESG criteria on the other hand. We can have both. If (or, hopefully, when) this trend continues, it also means that sustainable growth is not only possible but also desirable. Increasingly, it’s in our own best interest to think beyond ourselves, to think about posterity. There are short-term rewards for long-term thinking.
So it’s time to reframe sustainability. The pendulum is swinging back from the breathless short-termism of the neoliberal era. But it does so by integrating long-term viability into the short-term view, the daily business, and the financial markets. If this approach proves to be successful in the long term, we can expect huge benefits. It would help to solve global problems at scale.