Grow a Tree, Build a Bureaucracy

How Big Business Built an Industry Around Looking Green (Not Being It)

Let’s say you’re a company in the food industry that wants to do something good for the planet. How about planting some trees on a supplier’s farm? Trees preserve topsoil, sequester carbon, and if they’re a certain kind of tree they could offer additional income for farmers. How hard could it be?

The answer is… surprisingly hard. The first obstacle is that you do not own any farms. Your suppliers might not, either – middlemen abound in the food industry, especially for large scale commodities. So, step one is to put out a Request for Proposals (RFP) to your suppliers. They will have to find an amenable group of farmers, whose identity they might not be comfortable disclosing (so that you don’t approach them directly and cut the middleman out), and they’ll have to decide whether or not it’s worth it to them to facilitate this kind of thing, but after a series of meetings and evaluations you pick a willing partner with some engaged farmers and move forward.

Then there’s the problem of tree planting itself. You, a manufacturer, don’t know anything about trees. Your supplier, a logistics and quality expert, doesn’t either. So, you need to find another partner – an NGO, perhaps, or an agronomy consultant – who will implement your tree-planting dream. You put out another RFP, and, over the course of many months and many meetings, various groups will pitch you their visions for a tree-planting plan. You’ll weigh their budgets and projected outcomes, pick a partner, and they’ll supply agronomists and experts to go wherever your supplier has allowed them to get some saplings in the ground.

Then, to make any of this count, you’ll need to share this project somehow. Reportable metrics for your annual sustainability report are a must, plus some nice pictures you can put on social media to show your customers that you’re doing the right thing. It isn’t so simple as asking your supplier for updates, however. Greenwashing is rampant, and any unverified claim is suspect. So, you’ll need auditors to go back, yearly at least, to check your trees’ progress, measure their growth, and provide you with some nice KPIs – carbon sequestration, perhaps – that you can share in your sustainability report. And your marketing and brand teams aren’t going to be content with some quick cellphone picture from your agronomists, farmers, or suppliers. You’ll need to find professionals and parachute them in to get some high-quality shots of whatever’s going on.

Your tree-planting project is now costing you, your supplier, their farmers, your auditors, your marketing people, and their content creators. If you’re lucky, you can get through the planning process in a year. Implementation and follow-up will happen over several more. You’ll spend thousands of dollars and sit through endless meetings, but at the end of the day, you planted a handful of trees, and you can validate for any curious parties that they actually exist, are being cared for, and are growing as planned. Mission accomplished?

A Foundational Challenge

One of the classic pieces of business advice comes from German economist Theodore Levitt, who, writing for the Harvard Business Review, encouraged managers to “know what business you’re in.” This led to the golden age of outsourcing, where companies hand off manufacturing, marketing, customer service, strategic planning, or any task outside to their core identity to other firms, who specialize in those things specifically. It’s great advice for leveraging your business’s core expertise. But it’s terrible for sustainability, because hardly any firms are in the business of sustainability. Especially not larger, older firms, whose very success is built on the destructive practices that now desperately need changing.

To cover these ill-suited companies, a new Sustainability Business was born. It is expensive, inefficient, and simply not effective at actually doing sustainable things.

What the Sustainability Business really does is create bureaucratic processes. The industry is drowning in reporting standards, validation organizations, communications strategies, PR firms, marketing initiatives, verification schemes, and regulatory attempts. All these elements cycle in and out of fashion, multiplying paperwork and requiring yet more expertise to sort through the ever-changing frameworks to figure out what’s actually going on.

And all this work chews through money and labor that could be spent on doing the real work of sustainability.

The dishonesty problem

A great way to see the Sustainability Business in action is with third-party verification schemes. Greenwashing is rampant, so it’s de rigueur to have sustainability work validated by third parties. You can say that you’re paying your farmers fair wages, or looking after forests, but unless FairTrade or the Forestry Stewardship Council sign off, you’re asking for raised eyebrows and reputational risk.

But the trouble is that third parties are suspect for the same reasons as the businesses they verify. They need companies to pay them for their certifications, so there’s always a structural rift in their organization; they’re torn between setting easy standards that businesses can meet and meaningful standards that actually move the needle. And sure enough, Rainforest Alliance, FairTrade, Soil Association, and B Corp (and more) have all been criticized for not living up to their promises. This is hardly surprising when these companies are, in essence, asked to regulate the companies that keep them in business – a strange echo of ratings agencies’ complicity in the 2008 financial crisis.

Moreover, anyone who has tried to read a verification standard, Rainforest Alliance’s, for example, will find it absolutely impenetrable. It changes regularly, based on the whims of the companies who fund it, so it’s nearly impossible for any consumer to understand what precisely they’re validating.

So, to fill the understanding gap, these third parties employ large marketing and PR departments to make the case that their standard justifies the cost incurred by businesses to attain their certifications. These people all need to be paid, so the cost of certification goes up and none of the extra cost goes to doing anything sustainable. Instead, you get standard after standard, revision after revision, expensive awareness gambits and an endless cycle of proposal, criticism, and revision, infuriating those who actually need to be compliant (Kenya recently kicked Rainforest Alliance out of the country) and funneling huge sums into the bureaucratic apparatus without ever creating the structural change that is supposed to be the goal of all this effort. It’s a Russian nesting doll of untrustworthiness upholding standards that nobody understands, siphoning money away from the work that actually needs doing.

Then, back on the company side, sustainability only counts if you can share it in a verified, validated way, so businesses create enormous annual sustainability reports running in the hundreds of pages, backed by hundreds of audits, shared by marketing plans and PR strategies, each meticulously presented, driving up costs of doing sustainable work without moving the needle on sustainability itself either. JBS, the beef giant, claims 446 certification and audit processes. Their annual sustainability report runs for nearly 200 pages. Yet it’s completely obvious that a company dedicated to the raising and slaughter of ever-increasing numbers of cows will never be sustainable. Yet they say they’ll invest 1 billion USD in sustainability initiatives. How much of that is going to being sustainable, and how much will be siphoned off to create the illusion of progress?

Square pegs and round holes

The Sustainability Business is adept at soaking up time, money, and labor, without creating the changes needed for a sustainable future. The ecosystem of auditing companies, third-party verifications, assessors, carbon accountancies, consultants, and verification agencies, is enormous and growing. They’re in competition with each other to give companies what they want - achievable goals, favorable terms, nice reports, steady KPIs, and brand equity – and somehow must square that with pushing vast, expensive structural changes in their host businesses. A recent poll of CEOs found that two-thirds of them believed their sustainability efforts weren’t “genuine”. How could they be, in this environment?

The work needn’t be so onerous. Levitt’s wisdom returns with a new crop of companies who are making it their business to be sustainable from the outset. Tony’s Chocolonely exists to put an end to child labor in the chocolate industry. Patagonia, famously, is “In business to save our home planet.” Organizations like EIT fund food startups with strong sustainability commitments.

The company I work for has been remarkably successful in understanding the sustainability of its supply chain as its own long-term success. A smaller company like ours, with sustainability DNA in its raison d’être and an appropriately progressive market position, can navigate these waters with relative ease. Through direct sourcing and long-term agreements, and a bit of trust from consumers, it’s very possible to spend more money on real sustainability projects and less on bureaucratic bloat.

But companies like these aren’t really the problem. The lion’s share of global emissions, and environmental degradation, are driven by huge firms of JBS’ scale, who need to continue their destructive practices to maintain the level of exploitative profitability that allowed them to grow so much in the first place. For them, change is expensive, time-consuming, difficult, and even risky – especially so at scale.

Shop local, buy small, and support smaller companies who have made it their business to be sustainable. With the political landscape shifting, and western governments all but abdicating responsibility for sustainability, the reins are firmly in the hands of large corporations. Yet large corporations are uniquely ill-suited for the task. The work is too expensive, time-consuming, and difficult, to be implemented at scale. Yet it’s no exaggeration to say that currently humanity is collectively betting its future on the success of this process. Shifting any business possible to smaller, sustainability-minded firms, can help hedge against the wasteful inadequacy of the Sustainability Business.