The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Sustainable Business

URL:  http://boards.fool.com/hi-ganado-the-point-on-nike-from-you-and-frecs-11530714.aspx

Subject:  Re: Defining SB Date:  11/16/1999  2:33 PM
Author:  krygeris Number:  1472 of 1656

Hi, Ganado.

The point on Nike, from you and Frecs, is well taken. No, I don't think abusing a work force is sustainable, and even if it were, it's not right. I tend to be overly focused on the environmental.

So before we talk about "sustainable business", let's talk about what we mean by sustainable.

Electricity is not unsustainable in itself, but the ways we usually produce it are. Solar cells, windmills, and water turbines all sustainably collect the constant input of energy from the sun; our use of fossil fuels instead burns up a legacy of millions of years of solar collection by plants. All of our ecosystems ride the free energy of the sun, and our economies should, too.

The other categories to be aware of are sources and sinks. (I take this terminology from Beyond the Limits by Donella and Dennis Meadows and Jorgen Randers.) Sources are those supplies we pull from our environment, sinks are those aspects of our environment that we use up through dumping (for example, our atmosphere is a carbon dioxide sink). Together they're called resources, and can be divided into renewable and non-renewable.

Renewables can be used at their replacement rate and, in this sense, be sustainable. So we can call a timber harvest sustainable if our harvesting plan accounts for the time it takes to grow new trees on the land (but this doesn't account for the fact that we've hauled a lot of resources off the land with the tree, and for literal sustainability, these need to be replaced).

The waste from renewables is often, but not always, able to be reabsorbed into the environment, but again we have to account for the time it takes the sinks to process this waste. Also, many of our pollutants are organic (but not necessarily natural) poisons.

Our saving grace with renewables is that there are so many systems in place to work with them. The carbon dioxide from the paper and food composting in our landfills gets carried back to the forests and fields by our atmosphere. Our soils contain the microscopic life that enables our compostable wastes to be turned into new plants for our use (if we make the effort to get those wastes back to the land).

In his book The Ecology of Commerce, Paul Hawken talks about creating systems like these for our modern economies. In these systems, the waste from one operation becomes the input to another operation. (The first index entry on "industrial ecology" in the book refers to an example.) So the company Kafus that I mentioned in my last post becomes the dung beetle of a new economic "ecology". (I wonder what that'll do to the stock price if it gets around.)

One other concept from Beyond the Limits: none of this will happen overnight, so while sustainable resources and systems are being developed, we need to make sure that our current unsustainable resources are used at rates that can carry us to the transition to a replacement.

So, then, what do we mean by sustainable business?

I'd call sustainable a business that:
<UL>
<LI>limits energy use</LI>
<LI>uses sun-based energy</LI>
<LI>finds a use for any substantial waste energy</LI>
<LI>limits its intake of raw materials</LI>
<LI>uses organic, renewable materials where possible</LI>
<LI>uses waste-stream resources where possible</LI>
<LI>limits its output of waste material</LI>
<LI>dumps into the ecosphere only non-damaging materials which the ecosystem can process</LI>
<LI>maximizes the reuse of waste materials</LI>
</UL>

Or more concisely:

For energy, sources, and sinks, a sustainable company should (1) use as little as possible, (2) use renewables, and (3) use waste sources.

That's my ideal. I don't imagine there are many (any?) businesses that currently embody this ideal, but some are starting to work toward it.

Thanks for asking, Ganado. This was a great opportunity to get my thoughts on this subject in order. I look forward to your response, and those of others.

-Allan
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us