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Global Perspective

The Future of Ecological Leadership



Sep 1st 2009
By Daniel Goleman

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 engineers precision. The main method, life cycle
assessment, renders values for the environmental, health (and, more lately, social) 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 todays 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.

One proof-of-concept for such systems can be seen in GoodGuide.com, which launched only a few
months ago. GoodGuide rates an items ecological impacts on a ten-point scale based on an aggregation
of more than 200 databases and lets shoppers instantly compare any products environmental,
health, and social impacts with all its competitors. When I spoke with Dara ORourke, the University of
California-based industrial ecologist who developed GoodGuide, he told me his hope for this
information system is to provide a giant lever that shifts markets to prod manufacturers incrementally
to get better across the board.

Facilitating that perpetual ecological upgrade is the point of Earthster, a supply-chain management
system that takes openly disclosed LCA data, helps companies spot where they can make the biggest
ecological improvements, and then guides them in finding suppliers who can provide the needed
upgrades.

In a coming era of radical transparency a supply management system like Earthster might in turn feed
precise metrics to a consumer-facing rating system like GoodGuide. That flow of data would fuel a
process of ongoing innovation, as ecological impacts become as competitive an arena as price is today.
As Gregory Norris, the industrial ecologist who designed Earthster says, When anyone in your supply
chain makes a smart move, it makes your product greener, too as well as the purchases of everyone
who buys your product. That ripple effect turns thousands of upstream suppliers into your allies, to the
extent any of them make improvements.

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 whats 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.

Toyota is the world model for such ownership of the supply chain, keeping their suppliers in touch with
what customers want in their autos, and co-developing improvements. Another best practice model can
be seen in Nikes response to the revelations that their supply chain relied on sweatshops and Nike
then taking the leadership in its sector in finding ways to ensure fair working conditions.

There are countless executives leading sustainability initiatives at companies worldwide. Good starts,
but no company has come near the full vision. Which consumer products company will accomplish the
ultimate raising of the bar for all the rest: making LCA data fully transparent, vowing to lead the way in
perpetual ecological upgrades? What retailer will be the first to post LCA product ratings next to the
items price tags, and have brands compete for shelf space on the basis of their ecological footprint?

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.




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