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The Business of Sustainability

Guest Essay: The continued health of capitalism depends on a system that produces not only goods but also healthy customers-who will not flourish in depleted, polluted, and desperate conditions.
October 10, 2003

In the most vibrant areas of research and education, creative relationships are being forged between academia and industry. This is especially true in the fields of energy and environmental studies. The truth is that sustainability requires not just funding from, but the active involvement of, the private sector. This is the part of our society that will invest in, develop, market, and if necessary, defend technologies that fit into what I call a sustainability matrix: a combination of public policy, industrial decision-making, fundamental new discovery, and technology development.

Changing the material conditions of localities, from the village to the globe, requires a convergence of all four elements. Take the Montral Protocol, a global response to an alarming threat to the world ‘s atmosphere. International concern over destruction of the atmosphere ‘s protective ozone layer by chlorofluorocarbons led to agreement to replace them in both industrial processes and products with less dangerous compounds. This 1987 agreement would not have been possible without the collaboration of companies, particularly DuPont, in implementing new technologies to meet regulatory requirements.

Business leadership must be involved in identifying technological options for mitigating industrial pollution at the bioregional level, which is likely to involve several, potentially conflicting, public jurisdictions. Let ‘s look, for example, at the possibility of reducing global carbon dioxide emissions by fielding an international fleet of hydrogen-fuel-cell-powered cars. This technology has been hailed by many, including the Bush administration, as a clean-energy panacea.

There is, however, a basic problem with this vision: Earth has no store of the hydrogen gas that fuel cells consume. Therefore, powering a fleet of fuel cell vehicles would require massive energy inputs to extract hydrogen from methane, methanol, or water. Barring a major (and unlikely) national commitment to the development of alternative energy technologies, producing that energy will require either burning things, with the resultant emission of greenhouse gases, or else nuclear fission, with its end product whose severe toxicity is mitigated only by time-thousands of years of it (longer than any stable polity has ever lasted).

Powering a fleet large enough to put a dent in global production of carbon dioxide will require extensive public and private investment in hydrogen production facilities and fueling stations. Every element of this alternative would require intensive life-cycle analysis before it was implemented.(Some scientists have voiced concern that in a full-scale hydrogen economy, leakage from pumps, pipelines, vehicles, and power plants would compromise the ozone layer.) Setting up this infrastructure is a daunting prospect for a country the size of the United States.

At a recent stockholders ‘meeting of a major oil company, a move to adopt environmentally sustainable practices was voted down on the grounds that the company ‘s responsibility was to stockholders, not to any kind of “social experiment.” This is a laughably shortsighted view. In fact, capitalism itself is a social experiment, and not a very old one. Its continued health depends on a developing global system that produces not only goods but customers: healthy, secure, and cash-bearing customers with the means and capacity to make choices. They will not flourish in depleted, polluted, and desperate conditions.

This spring, I chaired a video workshop on the business case for environmental sustainability for faculty and students of MIT ‘s Leaders for Manufacturing and System Design and Management program and their counterparts from the University of Michigan’s Tauber Manufacturing Institute and Stanford University ‘s Alliance for Innovative Manufacturing-the three top manufacturing programs in the United States. These students will be involved in the sourcing, use, pollution mitigation, and security of energy supplies for decades to come. The companies they will direct will face known and unexpected environmental challenges, work with regulators at many levels of jurisdiction as business continues to globalize, and partner with the academic community to build and implement new technologies (including advances in information technology, nanotechnology, and biotechnology).
MIT and other universities have a responsibility to equip students with the most advanced thinking, not just about managing complex systems, but also about using those systems, powered by industry, as engines of responsible change in the world.

This article originally appeared in the MIT Technology Insider, a monthly newsletter covering MIT research and commercial spinoff activity.

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