How to tell a sustainable business from a greenwashing one: Interview with Paul Gilding

The Australian environmentalist is also the author of the internationally acclaimed book called “The Great Disruption”, which discusses the critical juncture that humanity finds itself in, a period of transformation starting with how businesses operate and can grow the economy without adding to further environmental and social impact. Responsible businesses are those that recognise that society’s success is their success, he says. Truly sustainable companies “do good things in order to make money”, he explains, whereas a greenwasher merely does good things after they’ve made money.

Despite the worsening climate conditions and the implications it has on food, water and energy security, Gilding, who lives in southern Tasmania, believes that people will act within this decade, and the impetus to drive this change will be led by the private sector.

This November 25 to 26, he will be a keynote speaker at the Responsible Business Forum on Sustainable Development at the Marina Bay Sands in Singapore. He will be sharing his insights on the changing economic landscape and how businesses that innovate and act sustainably will triumph.

In this wide-ranging interview, Gilding speaks to Eco-Business about the green economy transformation, human nature and how history has proven we can respond strongly to global crises.  

You’ve spent more than three decades seeking to change the world and yet sustainability is still at its infancy in many parts of the world. What made you start then and why do you continue to do so until now?

I guess it’s the same with what has always been said to me from the science of climate change and risks and resource constraints – that we face very serious issues as humanity. My motivation is not so much protecting the environment – it is needed terribly – but protecting the stability of civilisation and humanity. And to do that we have to protect the ecological systems and the social systems which we depend on. That was my motivation 30 years ago and that is my motivation today. The big difference today is there’s so much more urgency.

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The reason I’m coming to this conference and the reason my work now is focused on the business community is because I think the business community is the biggest obstacle and the biggest opportunity.

In addition, I think having children was a major motivator. My first child was born 30 to 40 years ago, and that was certainly a big impact in my life because it makes you think about the world in much longer time frames. What happens in 30 to 50 years time becomes more important to you when it’s your child or their children that will be inheriting this world. The second motivation for me, more selfishly, is that it’s satisfying work! That what you’re doing with your life is worthwhile.

How would you rate yourself and your life-long work? Were you able to do what you intended to do?

I think anybody who works in this area inevitably feels a sense of failure. But on the other hand, we now have an extraordinary understanding and awareness about the issues so there’s no longer any serious argument about the underlying science or the underlying need to act. And that I guess is our only significant achievement so far, that we’re now moving into that era where we have to do the action. There’s no serious dispute about the need to act, but it’s still a frustrating achievement since it’s not enough at this stage.

What is the biggest obstacle to addressing these issues?

The reason I’m coming to this conference and the reason my work now is focused on the business community is because I think the business community is the biggest obstacle and the biggest opportunity. Unless we can engage business, then I think we will fail, because business is such a powerful force in society and so influential on government. But with business support, we can easily achieve what we need to achieve. The challenges we face are not insurmountable at all. They’re actually – not to make it sound too easy – achievable and businesses are a good mechanism to do that with. 

How has the world evolved in terms of building a sustainable economy?

This is the central argument that I’ll be making at the conference: we’re in a new era of sustainability and corporate social responsibility. Up until now, for business leaders to be engaged in sustainability was kind of an option, that they can do it if they chose to. They can do it because it makes them feel good or because it would help their reputation. They didn’t have to engage in sustainability to be successful as business people. Whereas now I think we’re moving into an era where you do. Unless you engage in sustainability and understand that we are beginning a major economic transformation then you simply won’t succeed in business anymore. And that is a very different idea and that is the big change we’re seeing now.

We’re talking about a transformation of the economy, and when you transform economies, then some businesses win and some businesses lose. There will be large companies that need to cease to exist for us to become sustainable and there will be large companies that need to be creative for us to become sustainable.

And are most multinationals engaged in corporate social responsibility?

I think they are engaged in the conversation. They’re all talking about it, but most are not yet really engaged in it as being essential to business success – and that’s where the opportunity lies. This conference is important in trying to get businesses to engage a lot more deeply on sustainability as a business question, as a competitive question, as a success and failure question. 

How will we be able to differentiate if they’re doing substantial work or just greenwashing?

That’s a very important question and I think the answer is to look at whether they’re working sustainability into their products or are they investing in sustainability? Are they changing the products they produce or how they produce them? Or are they just doing good things in the community? This is good to do but this is not a question of doing good things while you make money. It’s a question of doing good things in order to make money. Your measure of success has to be driven by it.

In your widely acclaimed book, The Great Disruption, you talk about a global crisis and the changing economic landscape. Can you tell us more about this?

Why I came to write the book and the recognition that I had was that we were not going to change as a society until there was an economic disruption, that we would not engage on the issue enough as a question of responsibility, that we would only act when the impacts were felt in the economy. Therefore, I looked around to understand what that could look like. How will that occur?

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I think World War II is a good example, where we showed acting late but acting strongly is always still possible. When we look around at the economy today, the solar energy industry is now booming globally at a phenomenal rate… And that is a very important example because what it means is that the winners in the sustainability transformation will be new companies and old companies will not be able to respond fast enough

I started this process in 2005 and what was clear to me was that we had to look for signals in the market. For example, increasing commodity prices, increasing food prices, or when were resources constrained sufficiently that this added to business success and failure… then we paid attention.

That was the big shift in my mind. Now we see that very clearly. We see big food companies like Unilever talking about the very direct impact on their business performance. So companies are no longer talking about future risks, they’re talking about today’s risks and today’s economic impact, and that’s a significant change. 

You also talk about how this will bring out the best in humanity and how this is a business opportunity. Can you explain this and give us some examples?

This is a very important question because people in this area tend to be very despondent about the prospects. They tend to be negative about how slow society is to respond and how it’s going to be terrible. I understand that, because that’s what science tells us, that the path we’re currently on is very negative.

But what people forget is that this is normal pattern for human behaviour. We tend to avoid acting as long as we possibly can. We tend to wait until a crisis is fully unfolding around us and then we respond dramatically. That’s fundamentally why I feel optimistic about the situation. I’m very confident that we are able to respond very quickly once we put our minds to it. 

I think World War II is a good example, where we showed acting late but acting strongly is always still possible. When we look around at the economy today, to cite some examples, the solar energy industry is now booming globally at a phenomenal rate. There are now multi-billion solar power companies in America and in China, which will be tomorrow’s Google or Microsoft or Amazon. And that is a very important example here because what it means so far is that the winners in the sustainability transformation will be new companies and old companies will not be able to respond fast enough.

That is what economic history suggests - that old companies simply fade away and new companies replace them, rather than old companies changing. Of course, there are some very old companies around like DuPont that’s been around for 200 years. But very often the case is these companies die and are replaced, that’s why markets and businesses are a good mechanism to drive the change.

That said, and with you being from Australia, what can you say about the recent changes undertaken by the new Australian government regarding climate change?

All around the world we know how serious this issue is and yes there’s a big difference between this government in Australia and the last government. But if you put them on a scale, then the new government is at two and the old government is at one and we need to be at ten.

So yes they’re different, and yes they’re winding it back on certain matters, and they shouldn’t be doing that, but no one, even the last government, is actively engaged in climate change.

Nobody is talking about ending the use of coal, or the electrification of every car in the world, or the need to have government intervention in the food system to ensure food security. But we should be talking about all these issues seriously.

I have been in Singapore before talking to the military chiefs there about security issue in climate change and resource constraint, and how much an impact that is. We’re so far behind in government action that the changes in government in Australia is not as important as what people make out.

Having said that, I think some governments are doing significant things. China is a good example of a government that is waking up to the economic implications of doing things wrong. Germany is another good example. It has an aggressive programme to move to renewable energy. There are many good cases where governments are acting and are doing a lot more than others. Countries like Australia and America are being left behind in these areas.

In climate talks, some countries are saying that these old nations who are responsible for most of the emissions should be responsible for the crises. Who should bear the responsibility?

I think it’s a dangerous approach for the developing countries to argue that. It assumes two things that are wrong: first is that action is optional, that we have a choice whether to act or not, and secondly it assumes that acting is bad – but the evidence is emerging now in China and elsewhere that it is not just a necessary action, it’s a positive action for your economy. 

So I think this argument of ‘we won’t do it until you do it’ is slowing everyone down, which is bad for the global economy and security. The sooner we act, the cheaper it is to act. 

The Responsible Business Forum on Sustainable Development will bring together business leaders, NGOs and policy-makers from around Southeast Asia to discuss commitments and policy recommendations to increase sustainability across six sectors – agriculture & forestry, palm oil, consumer goods, financial services, building & urban infrastructure and energy.

The forum will discuss the transformational journey to the green economy and offer practical ways to accelerate business solutions and policy frameworks for a more sustainable world.

To hear more from Paul Gilding and other experts, register for the upcoming Responsible Business Forum on Sustainable Development here.