The following is a chapter excerpt from the in-progress book “Sustainable Vikings: Nordic Leadership in Sustainable Capitalism” authored by the CRB Executive Director Robert Strand. This book serves as the base text for the Haas undergraduate course “Sustainable Business in the Nordics” and Haas executive MBA course by the same name. The CRB will publish a chapter from this book throughout the academic year on the CRB blog. This is a work-in-progress so please leave your feedback and suggestions for improvement in the comments section!
Part I: Global Leadership by the Sustainable Vikings
Chapter 1: Modern Vikings: Global Sustainability Leaders
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”— Gro Harlem Brundtland1
These words from the Brundtland Report, also published in 1987 as the book Our Common Future, represent the most commonly used definition of sustainability. The core of the word, sustain, comes from the Latin sustinere where tenere is “to hold” and sus is a form of sub, meaning “up from below.” Sustainability brings the dimension of time into consideration through explicit attention to future generations. The Brundtland Report is named after Gro Harlem Brundtland, who chaired the UN Commission on Environment and Development responsible for generating this report. The Nordic ties are deep as Gro Harlem Brundtland is former Prime Minister of Norway. She is commonly referred to as the “Mother of Sustainable Development.”
I first encountered this definition as an MBA student in the early 2000s. I vividly recall the class session in my Sustainability course in which my professor scribbled these words upon the board. They moved me. I recognize it is quite unusual to be moved by a definition, but the simplicity, the holistic nature, and timelessness of this collection of words resonated deeply2. I had recently completed that other outlier course from my MBA, Business Ethics, where I found the definition of sustainability directly connected to the ethical concepts about which I had been learning in my Business Ethics course. Business ethics focuses primarily on the individual level unit of analysis (i.e. what is the ethical decision for me to take?) and organizational level unit of analysis (i.e. what should my company do to be a “responsible company?”). Sustainability connects such ideas of ethics to the national, supra-national, and global levels as meeting the needs of the present and future generations is not referring to just an individual or an organization. Meeting needs of the present and future implies the inclusive ideal to meet everyone’s needs – all of us. This connects directly to the learnings from my Business Ethics course – specifically a Kantian categorical imperative I mentioned in the Introduction, which originated from the German philosopher Immanuel Kant, who stated that human beings should never be treated solely as a means. Said another way, people should never be disregarded or treated just as a tool. We commonly say someone is acting ‘unethically’ if they are taking advantage of someone for their own selfish purposes and that other person is harmed. So, on the flip side, working to support sustainability is akin to acting ‘ethically’ as embedded within the definition of sustainability is consideration for the well-being of others. The traditions of ethical thought were connecting to the concept of sustainability for me.
The Brundtland Report represents a significant departure from prior mainstream conceptions of economic development as somehow existing in a separate domain from human beings and the environment, emphasizing that we cannot consider major sustainability challenges — such as climate change or loss of biodiversity or poverty —solely in economic terms, or social terms, or environmental terms. These kinds of challenges are all of these things at once. The Brundtland Report embraces and promotes a systems level thinking view of the world. The report states:
There has been a growing realization in national governments and multilateral institutions that it is impossible to separate economic development issues from environmental issues; many forms of development erode the environmental resources upon which they must be based, and environmental degradation can undermine economic development. Poverty is a major cause and effect of global environmental problems. It is therefore future to attempt to deal with environmental problems without a broader perspective that encompasses the factors underlying world poverty and international inequality (p. 3).
With this in mind, the report continues:
The Commission focused its attention in the areas of population, food security, the loss of species and genetic resources, energy, industry, and human settlements – realizing that all of these are connected and cannot be treated in isolation one from another.
Therefore, a key contribution of the Brundtland Report was the bringing together of economic, social, and environmental considerations into a holistic concept that emphasized the interconnectedness of these issues. Its authors wrote, referencing the UN Commission, “The Commission focused its attention in the areas of population, food security, the loss of species and genetic resources, energy, industry, and human settlements – realizing that all of these are connected and cannot be treated in isolation one from another”.
Circling back to our navigational sólarsteinn from the Introduction, the Brundtland Report traverses across all units of analysis from the individual to the global with the expressed intent to “raise the level of understanding and commitment to action on the part of individuals, voluntary organizations, businesses, institutes, and governments” (1987: 347). The Brundtland Report emphasized a systems view of the world and the interconnectedness of challenges across all units of analysis. In a systems view of the world, everything is connected.
The Brundtland Report also helped move beyond a paradigm in which social and environmental considerations are routinely treated solely as economic costs along the lines of “trade-offs” within a zero-sum game mindset. Building upon such influential offerings as Rachel Carson’s Silent Spring3, the Brundtland Report helped to mainstream the view that taking social and environmental concerns into account should not be framed solely as costs; they are also investments in the future. Furthermore, the Brundtland Report helped remind mainstream audiences that ethical considerations may extend beyond what the domain of economists as people and natural resources are not just “inputs.” People and natural resources possess an intrinsic value that deserve respect independent of economic value.
Economists have long framed tradeoffs in terms of efficiency and equality. In 1975, famed American economist Arthur Okun published Equality and Efficiency: The Big Tradeoff4 in which he succinctly articulated the Efficiency-Equality conceptual framework5. With respect to efficiency, Okun articulated (2015:2), “To the economist, as to the engineer, efficiency means getting the most out of a given input. The input applied in production are human effort, the services of physical capital such as machines and buildings, and the endowments of nature like land and mineral resources. The outputs are thousands of different types of goods and services. If society finds a way, with the same inputs, to turn out more of some products (and no less of others), it has scored an increase in efficiency.” He continued, “This concept of efficiency implies that more is better, insofar as the ‘more’ consists of items that people want to buy.”
With respect to equality, Okun wrote of equality of income6 —that is to say the consideration of the spread between the “haves” and the “have nots.” As the title of Okun’s book indicates, economists considered efficiency and equality to be in tension7. Care about engendering a society with greater equality? It must come at the cost of efficiency. Want efficiency? Bring on the inequality!
Okun related tensions between efficiency and equality with the underlying tension between the concepts of capitalism and democracy. The domain of capitalism is predominantly the domain of efficiency. Efficiency is the dominant logic of capitalism. Democracy, on the other hand, is the domain of equality as equal rights for all is an ideal of democracy. One such right in a democracy is the right to vote where power is dispersed throughout a society (eg. “one person, one vote). It may be more “efficient” to have one person take a decision, as is commonplace when power is concentrated in the hands of one dictator or an oligarchy that rules by decree. Such concentration of power violates democratic principles. In a democracy, the decisions taken are based upon the building of consensus through such processes as holding a vote. Making a decision by the building of consensus rather than decree is far more ‘inefficient’ – it takes a lot longer – but the decisions taken are more likely take the interests of all the people into consideration, not just the few with power. A well-functioning democracy disperses power. Okun concluded Equality and Efficiency by emphasizing the fundamental tension between capitalism and democracy – i.e. between efficiency and equality – but stressed these tensions are not something to be neglected and in fact can be constructive, stating:
.. the conflict between equality and efficiency is inescapable. In that sense, capitalism and democracy area really a most improbable mixture. Maybe that is why they need each other – to put some rationality into equality and some humanity into efficiency (p. 120).
The Efficiency-Equality conceptual framework is immensely helpful in understanding the tensions that exist between capitalism and democracy. This framework helps us to acknowledge that tensions do, in fact, exist whereby we can engage with those tensions and make the best of it. This would qualify as constructive negotiation of the tensions. Many influential economists of the twentieth century like Milton Friedman focused attention almost exclusively on issues of efficiency and downplayed or outright ignored issues of inequality and the associated humanistic challenges. Ignoring tensions does not make them go away – quite the contrary. The Efficiency-Equality conceptual framework helps to overcome this and enable constructive deliberations.
However, the Efficiency-Equality conceptual framework today demands the addition of a critical dimension: Sustainability. The massive advancements in efficiency over the course of the twentieth century have had negative unintended consequences. The conclusion of the Brundtland Report succinctly outlines why sustainability demands explicit consideration, stating:
Over the course of this [twentieth] century, the relationship between the human world and the planet that sustains it has undergone a profound change. When the century began, neither human numbers nor technology had the power to radically alter planetary systems. As the century closes, not only do vastly increased human numbers and their activities have that power, but major, unintended changes are occurring in the atmosphere, in soils, in waters, among plants and animals, and in the relationships among all of these. The rate of change is outstripping the ability of scientific disciplines and our current capabilities to assess and advise. It is frustrating the attempts of political and economic institutions, which evolved in a different, more fragmented world, to adapt and cope. It deeply worries many people who are seeking ways to place those concerns on the political agendas.
As assumed by most economists of his time, Okun expressed disbelief that human activity could threaten the environment in an uncorrectable manner. He stated, (p. 3) “[S]ome warn that the economic growth that generates more output today may plunder the earth of its resources and make for lower standards of living in the future,” and referred to such views as part of a “doomsday school.” Okun rather briskly stated that, in his judgment, his fellow economists had effectively refuted the dire predictions. Different schools of thought at play here that include a belief in market forces to ensure that natural resources are never depleted (i.e. cut down too many trees, prices go up, people plant more trees) to a religious belief “God will provide” related to an expressed disbelief that mere human mortals could possibly destroy what God has created. The Cold War historical context is also most relevant in the dismissal of sustainability concerns. Milton Friedman stated that businesspeople who concerned their companies with environmental degradation (or such things as discrimination in the workplace) were committing “pure and unadulterated socialism”8 as they were, in Friedman’s view, preventing the free markets from doing their thing and free markets were central in defining American capitalism vis-à-vis Soviet communism.
Today, it is self-evident that Okun and his economist colleagues were very, very, (very, very, very) wrong to assume the earth could support limitless economic growth9. Sustainability challenges like climate change, extinction of biodiversity, and ocean acidification expose the flawed nature of the economists’ longstanding assumptions. Industrialization has proven to be a far more powerful force relative to the earth than what was historically considered (if it was considered at all.) Assuming the markets would “take care of it” is flat out wrong. Market forces do not sufficiently tackle climate change, for example, in part because of its delayed effects. We immediately receive the “benefits” from increased consumption, such as the pleasure received by taking a long hot shower, but the “harm” that we experience from increased greenhouse gases emitted to generate the electricity from fossil fuel sources is delayed until decades later. This is analogous to a smoker who receives the immediate benefits from smoking, the pleasure, but does not experience the harms until much later in life. If the harms of smoking were immediately realized –i.e. take a puff and feel immediate pain – far fewer individuals would smoke. Immediate benefits but delayed harms present challenges for markets – i.e. latency.
Furthermore, the problem for the markets to handle climate change is compounded by the fact that the harms of climate change are dispersed over a broad population of people. Individuals living in a developing nation may have never enjoyed the benefits of a long hot shower but nevertheless are harmed by those of us who have. In economist speak, this is “tragedy of the commons.” The smoker again serves as a useful analogy when we also consider second hand smokers. The smoker receives the benefit of immediate pleasure by smoking whereas those who were exposed to secondhand smoke around him received no benefits ever but yet they still bear harm in the future. However, the market forces are still significantly stronger for smokers to quit smoking than they are for greenhouse gas emitters to stop emitting. At least with smoking, the smoker bears the lion share of the future costs and therefore successful information campaigns may be effective to curtail the individual smoker from smoking. The same is not true for greenhouse gas emitters because that long hot shower that we took, of which only we received the benefits, its future harms will be indiscriminately spread across the world.
One might rightfully argue that sound policy is thus needed so appropriate incentives are established for the markets, i.e. efficiency, to drive sustainability. However, from a political standpoint, it is difficult to implement public policy in the face of delayed harms because it’s much difficult to rally public to support for far-off threats than for more immediate ones. Leadership is needed to first build general awareness that a problem exists and, subsequently, to build consensus for what to do about it. Tragedy of the commons is at play here also as the future harms caused by current levels of consumption in advanced economies (i.e. people in the U.S. and Nordic countries taking lots of those long hot showers) are spread across people in places who are not consuming at heightened levels. (This is also the case within a particular country as wealthier individuals tend to consume more and wealthier individuals tend to wield more political power thereby making it all the more challenging for political processes to address the issue.) Furthermore, the economists’ idea of substitutes goes out the window when it comes to climate change as we do not have a substitute planet upon which to live10.
The Brundtland Report directly challenged these longstanding economist ideas. Therefore, it is now time that we also update the framework to efficiency-equality-sustainability to reflect the omission of considerations toward sustainability11. The “Triangle of Tensions” depicts the conceptual dimensions efficiency, equality, and sustainability together in one common framework and the associated tensions between these dimensions. Through the constructive negotiating of these tensions we can realize a better, more resilient outcome. Efficiency brings rationality into equality and equality brings humanity to efficiency, as Okun described. Sustainability brings conservation to efficiency and an intergenerationality to equality. Conservation is a statement of efficiency in that natural resources should not be unnecessarily wasted. But conservation demands that natural resources be considered more than merely an input. From a sustainability perspective, natural resources have intrinsic value and are not solely a means. One may theorize this is an extension of Kant’s axiom where humans AND natural resources should not just be considered a means but also deserve respect as an end in and of themselves. Sustainability, with its attention to future generations, also brings an intergenerational element to the ideal of equality that can otherwise become consideration solely for the here and now. Conversely, the ideal of sustainability benefits from consideration to efficiency and equality. Efficiency brings practicality to sustainability. A development project in a poor region with high likelihood for significant economic returns but comes with a potential to endanger a slug species in the area may very well be a practical approach. Equality brings a here and now presence to sustainability that can help to bring discussions into current needs that are known and away from venturing into future far more considerations that are uncertain. Pragmatically negotiating these tensions is a constructive endeavor.
The Brundtland Report performed a great service in providing a timeless definition of sustainability and bring together economic, social, and environmental considerations into a holistic concept that emphasized the interconnectedness of these issues. However, it did not include specific objectives and targets against which action could readily be taken and measured. That would be not be resolved until 2015 with the global launch of the Sustainable Development Goals (SDGs).
Sustainable Development Goals (SDGs)
The Sustainable Development Goals (SDGs) represent the world’s greatest materiality assessment that represent the most significant challenges we face on this planet12. The deliberation and consensus building process leading up to their launch was significant and politically robust. This has resulted in the 17 SDGs and their underlying 169 targets as the most widely recognized sustainability framework in the world13. The 17 SDGs unanimously adopted by the 193 member states of the United Nations and launched in 2015 bring together the world’s most pressing social, environmental, and economic challenges into one widely agreed upon framework. Achieving all 169 targets would signal accomplishing all 17 SDGs by 2030 that would effectively mean humankind has achieved a sustainable world. The only way to achieve the targets associated with the SDGs is through the successful negotiation of the tensions represented in the Efficiency-Equality-Sustainability framework.
At their foundation, the SDG’s leverage the definition of sustainability from the Brundtland Report as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” The Brundtland Report holistically brings the social, environmental and economics domains together, emphasizing their interconnectedness as part of a system, whereby it follows that the 17 SDGs represent a holistic platform through which to consider the connections between these sustainability challenges. SDG #1 No Poverty is directly connected with SDG #8 Decent Work and Economic Growth. The greatest poverty alleviation program is a good job in a society that fosters equitable growth. SDG #5 Gender Equality is directly connected with SDG #4 Quality Education. Societies whose young girls receive access to quality education are societies that achieve greater gender equality. SDG #13 Climate Action is directly connected with SDG #7 Affordable and Clean Energy. The climate crisis, as Sweden’s Greta Thunberg is helping to call much needed global attention, calls upon the building of infrastructure needed to ensure access to affordable, reliable, sustainable and modern energy for all.
But the interconnected nature of the SDGs goes beyond these readily evident connections. Educating girls, which is a combination of SDG #5 Gender Equality with SDG #4 Quality Education, is one of the most effective ways to address SDG #8 Decent Work and Economic Growth and SDG #3 Good Health and Well-being. Educated girls realize higher wages and greater upward mobility, contributing to economic growth. They are less likely to marry as children or against their will. Their agricultural plots are more productive and their families better nourished. And educating girls is one of the most effective means available to effectively tackle SDG #13 Climate Action as Project Drawdown demonstrates14. Educated girls and women are more effective stewards of food, soil, trees, and water. They have greater capacity to cope with shocks from natural disasters and extreme weather events. Education shores up resilience and equips girls and women to face the impacts of climate change. Just imagine the positive effect on climate action if girls throughout the world received access to quality education as the young Greta Thunberg had in Sweden that is commonplace across the Nordics. Furthermore, as one digs into the underlying 169 targets, the interconnected nature of these sustainability challenges is ever the more apparent. SDG #12 Responsible Consumption and Production includes the target 12.3 “By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses.” Food waste is one of the greatest contributors to climate change, represented by SDG #13 Climate Action. If food waste were a country, it would be the third largest greenhouse gas emitter behind only the U.S. and China15. The interconnectedness of the SDGs are a reflection of the interconnectedness of the social, environmental, and economic domains as emphasized in the Brundtland Report and serve as further evidence of the need to take a systems thinking approach when addressing sustainability challenges.
Through the aesthetically pleasing packaging of the colorful SDG logo, the broad agenda encapsulated by the 17 SDGs is brought together in one attractive framework that represents form and function. I wear the SDG lapel pin (pictured below) on an almost daily basis, in part as a conversation starter. The SDGs take an otherwise overwhelming agenda from which many would otherwise run away and package it in a manner that make it assessable and desirable to engage. In 2015, when the SDGs launched I will admit that I was deeply skeptical as I felt the agenda represented by 17 goals was overwhelming. I was accustomed to three goals or maybe up to ten at the very most. But 17? The attractive packaging of the SDGs has been so vitally important to overcome this and I have come to realize how important having this expansive agenda is to enable effective systems thinking through which the interconnections between the SDGs are more readily apparent and collaborations between the relevant actors is inspired to take action. (And guess what! The SDG logo itself comes from the Nordics. The Swedish designer, Jakob Trollbäck, is behind its attractive design.16)
The SDG Index was launched in 2015, coinciding with the launch of the SDGs. The SDG Index, also called the “Sustainable Development Report,” is the first worldwide study to assess where each country stands with regard to achieving the SDGs. The SDG Index describes a purpose whereby governments and civil society can u identify priorities for action, understand key implementation challenges, track progress, ensure accountability, and identify gaps that must be closed in order to achieve the SDGs by 2030. It is co-produced annually by the Bertelsmann Stiftung and the Sustainable Development Solutions Network (SDSN) in collaboration with Professor Jeffrey Sachs (who has also been intimately involved with the World Happiness Index), the World Business Council on Sustainable Development (WBCSD), and the Prime Minister’s Office of Finland.
The Nordics regularly dominate the SDG Index. In every year since 2015, Nordic countries have retained the top three positions globally. Sweden has been a regular at number one but Denmark spiced things up a bit in 2019 by overtaking the position as world’s most sustainable country pushing Sweden back to runner up. Finland again took the respectable bronze with Norway and Iceland regulars in the Top 10. (For the sake of comparison, the U.S. ranked #35 in 2019, which was among the bottom of the most highly developed countries17). Friendly Nordic jockeying notwithstanding, the results are consistent and clear: the Nordics are global SDG leaders.
The SDG Index is an excellent metric with respect to its data sources, the organizations and individuals involved in its generation, and the fact that the SDGs are embraced globally as representative of the most widely agreed upon sustainability agenda. Therefore, it has become my one “go to” metric when kicking off discussions about sustainability. That said, I am always hesitant to put complete stock in one particular indicator. Fluctuations can occur from one year to the next that are more noise than a signal of some significant underlying change and any metric – sustainability or otherwise – is fallible subject to problems with data sources, appropriate weightings, etc. These issues can be largely overcome by considering a basket of related metrics and tracking them over time.
Therefore, just because the SDG Index has become my “go to” metric, I still track all of the related metrics including the UN Human Development Index measurement of societal well-being and Yale’s Environmental Sustainability Index that I had first encountered during my MBA studies and originally piqued my curiosity for how the Nordics were doing so well in them all. I have since added to it a number of others that I had discovered since or launched thereafter including the World Happiness Index, Transparency International Corruption Perceptions Index, RobecoSAM Country Sustainability Ranking, World Economic Forum Global Gender Gap, UNICEF Child Well-Being Index, Dow Jones Sustainability Index (DJSI), the Global 100 Most Sustainable Corporations in the World Index, among a number of others.
Below, I offer a few glimpse of these additional performance metrics. In Appendix X, I offer a full smörgåsbord of these performance metrics and associated methodological details. The resultant story is clear – so I will say it again: the Nordics are global sustainability leaders.
Benchmarking is an exercise that involves the comparison of performances and practices in an effort to learn something and ultimately improve. Benchmarking is a common practice in virtually every field – from education to healthcare to public policy to business and beyond. Most important with any benchmarking exercise is to have an open and curious mind with a commitment to continuous improvement. Whether or not one will learn something from a benchmarking exercise is largely a self-fulfilling prophesy. If you believe there is nothing to be learned by studying another context, then indeed you will likely not learn anything. But if you adopt an open mind that there is always a potential lesson to be learned by considering another context – particularly one that is demonstrating comparatively strong performances – then you are well on your way to learn.
A benchmarking often involves the following four steps:
- Identify outperformer(s).
- Study the outperformer(s). Attempt to understand how the outperformance is being achieved
- Study the context of the outperformer(s). Pay particular attention to similarities/differences to the context in which you desire to apply learnings.
- With the differing contexts in mind, consider how learnings from the outperformer (s) may be prosperously applied within context in which you desire to apply learnings. Some learnings may be applied directly “off the shelf” with little to no change while others will require adaptation to account for the differing contexts.
Given that the Nordics demonstrate the comparatively strongest sustainability performances in the world, if you are benchmarking sustainability, you have to include the Nordics. I am going to say that again, just a little louder. WHEN YOU ARE BENCHMARKING SUSTAINABILITY, YOU HAVE TO INCLUDE THE NORDICS!
Here I draw a page from my past as an industrial engineering student of the 1990s when my life revolved around benchmarking Japan. From the 1970s into the 1990s, Japan gained a reputation for hyper efficiency in manufacturing that drew the attention of the world18 19. Much of this attention focused on the automobile company Toyota as an exemplar of efficient manufacturing – also known as “lean manufacturing.” The “Toyota Production System” was documented in a number of books made available business practitioners throughout the world and became a mainstay in university courses taken by industrial engineering students like myself and professional development programs for practitioners.
As foundational elements of this, students like me were taught about technical aspects of the Toyota Production System. This included attention to its flexible working approaches where employees were empowered to move to the work and encouraged to see the production floor as a holistic system. We considered how employees were empowered to raise issues of quality concern irrespective of how low or high one might be considered on the hierarchical ladder. We were taught cultural components of working in a Japanese context and were taught a wide suite of Japanese words and associated concepts that included muda (waste), heijunka (level scheduling), kaizen (continuous improvement), kanban (pull system), and poka-yoke (error proofing). Upon joining Corporate America, I put these concepts from Japan into practice in the U.S. as a labor and capacity planner at the world’s largest IBM manufacturing factory in Rochester, Minnesota, U.S. As with any benchmarking exercise, I had to make adaptations given the U.S. context is different from the Japanese context (and the tech industry is different from the automobile industry). But like so many others, I successfully applied concepts of lean manufacturing from the Japanese context in the U.S. context with great success.
Today, with respect to sustainability, I apply this same mindset to look for the strongest performances in the world and learn from them. Just as no benchmarking exercise into lean manufacturing would have been complete in the 1990s without concerted attention to Japan, today no sustainability benchmarking exercise is complete without concerted attention to the Nordics.
Despite the overwhelming evidence of comparatively strong Nordic sustainability performances, I have encountered significant resistance from many of my American compatriots to consider lessons that may be learned from the Nordics. One of the most common things I often hear “yeah, but they’re small and homogenous” stated in a rather dismissive manner. It bears stating that Japan is far smaller and far more homogenous than the U.S., so when I consider how hungry many of us in the U.S. were to benchmark Japan for lean manufacturing and learn from that country’s rapid advancements in productivity, it strikes me that a charge of small and homogenous does not fully explain this Nordic resistance. Furthermore, in all of my years, I never heard a Nordic colleague dismissively state “yeah, but they’re big and heterogeneous. There’s nothing we could learn by benchmarking them.” (We will thoroughly explore this and more in Chapter 4 with titled “Yeah, But They’re Small and Homogenous.”)
Perhaps resistance to looking at the Nordics has to do with a general lack of interest in the sustainability agenda experienced in a U.S. context. The U.S. demonstrates overall lower levels of engagement and concern with issues of sustainability than other regions of the world. Sustainability in the U.S. context has been perceived as a bit more of a sideshow compared to issues considered to be more squarely in the realm of economics – like GDP growth or company profitability. Or perhaps some of the resistance may be explained by the fact that, by no desire of their own, the Nordics are involved in a sort of political proxy war between the Right and the Left in the U.S. At the risk of oversimplifying, the political Left in the U.S. tends to love the Nordics (think Bernie Sanders) that may result in utopian characterizations where universal healthcare and education freely flows from the faucets. The political Right in the U.S. tends to despise the Nordics (think Fox News “There is Something Rotten in Denmark”20) depicting a dystopian characterization of a Marxist communist state where freedoms of the individual have been trampled and the Nordic citizenry is a collection of unwitting dupes entirely dependent upon the State for their very existence. So perhaps when yours truly comes around raising the Nordic flag, I am met with resistance by some because the Nordics are themselves considered a political statement.
Irrespective of whatever the source of Nordic resistance may be, I am hopeful to overcome it by framing the deliberations from the perspective of a basic benchmarking exercise. The plain fact is that comparatively speaking, the Nordics are the highest sustainability performers in the world. As such, the Nordics demand our attention. Deliberately neglecting attention to learn from the strongest sustainability performances on the planet only hurts us all.
The Greta Reality
While the Nordics are on top or near the very top of virtually every global sustainability performance indicator, as the young Swedish advocate Greta Thunberg reminds us the whole world must improve – very much including the Nordics. Thunberg has inspired a global youth movement to protest lack of necessary action to tackle climate change (SDG #13). The summer of 2018 was the hottest Swedish summer on record since records began 262 years prior and the typically green lands of Sweden were struck by destructive wildfires. Thunberg launched her protest outside of the Swedish Parliament in August 2018. When she started, she was alone. Today she is not.
The Greta Reality, as I’ve come to call it, reminds us that comparative sustainability performances alone are not good enough. Thunberg handed out leaflets outside Swedish Parliament that read “I am doing this because you adults are shitting on my future.” As The Guardian reported, Thunberg’s protest came as a surprise for some given Sweden’s reputation as a climate pioneer and having “the most ambitious climate law in the world,” aiming to become carbon neutral by 2045. In response to those claims, Thunberg has stated, “This is too little too late, it needs to come much faster… Sweden is not a green paradise, it has one of the biggest carbon footprints.”21 22
The Greta Reality is effectively a restatement of the “Planetary Boundaries” concept23. Led by the Swedish scientist Johan Rockström, the Planetary Boundaries concept originated in 2009 by a team of Earth system and environmental scientists. Rockström and colleagues went on to found the Stockholm Resilience Centre through which they developed nine boundaries, including climate change, which show the earth as a closed system and we are exceeding its limits. The concept articulates Planetary Boundaries demonstrates that human activity, chiefly through industrialization, is challenging and in some cases exceeding the earth’s natural limits. As shown in Figure [Planetary Boundaries], climate change is an at-risk Planetary Boundary (i.e. SDG #13) and other Planetary Boundaries are presently at even greater immediate risk. This includes risks to genetic diversity that directly related to SDG #14 Life Below Water and SDG #15 Life on Land.
The Greta Reality is also evidenced in the statements included within the SDG Index. The authors, Sachs et al., highlight the Nordics are outperforming the rest of the world but this is not the whole story. They state “This year, three Nordic countries, Sweden, Denmark, and Finland, top the global SDG Index ranking, yet all three still face major challenges in achieving the SDGs.” Therefore, from a benchmarking perspective the Nordics are outperforming and thus demand our attention; However, the Nordics must continuously improve – and significantly so.
Sachs et al. sum up the sort of significant change necessary to meet the challenges presented by the SDGs, stating:
Achieving the SDGs will require deep transformations of education systems, healthcare, energy use, land use, urban planning, and deployment of information technologies. These transformations require strong government leadership working in partnership with business and civil society. Integrating the SDGs by 2030 into national strategies, budgets, audits, procurement policies, regulatory and human resource management, and other dimensions of public policy poses major challenges for developed and developing countries alike. While some countries have proven to be better than others at long-term planning and implementation, all countries need to improve their public policies if they are to achieve all the SDGs within the next 12 years. Success will require massive innovation, learning, and sharing of best practices within and among countries. — Sachs et al. (2018)
The Greta Reality reminds us that the Earth is indifferent whether the Nordics perform comparatively better than the U.S. in a sustainability index. The entire world must improve as we are collectively exceeding the Planetary Boundaries. “Advanced economies” like the U.S. and Nordic countries are the greatest contributors given our heightened levels of consumption compared to less-developed countries. Industrialization of the U.S. and Nordic countries brought with it incredible advances in efficiency that has dramatically improved standards of living in these advanced economies. However, without a concerted attention to the sustainability dimension, as explicitly included in the Triangle of Tensions, efficiencies were subject to having been achieved with limited consideration to conservation. We now face the Greta Reality that we are exceeding the Planetary Boundaries. Something must be done – and fast.
This brings me back to the Nordics as they demonstrate the kind of approach that is so urgently needed to more effectively tackle these challenges. Sustainability challenges are so great that no single actor can effectively address them alone. The Nordics have much to teach the world, and particularly the U.S., for how to effectively cooperate and achieve sustainability performances. A Nordic approach rooted in cooperation, consensus-building, humanism, reverence for democracy, systems thinking, and stewardship represents our greatest hope to effectively negotiate the tensions between efficiency and sustainability to address our greatest global challenges.
1As part of the Brundtland Commission’s report “Our Common Future.”
2A suite of related expressions have arisen since I first encountered this definition of sustainability. This includes “regenerative” and “restorative” that are critically important concepts that reflect the reality that the global challenges we face are now so big and urgent we must actively work to improve the condition of the world. Simply reducing the harm is no longer good enough because we have effectively dug ourselves into a hole. The challenges presented by climate change serves as excellent example as the problem is now so big and urgent that we must both reduce carbon emissions (i.e. reduce harm) and work to actively improve conditions through deliberate efforts to sequester carbon (i.e. remove carbon dioxide from the atmosphere through natural or technical processes). These expressions are consistent and supportive of the concept sustainability as articulated in the Brundtland Report. We need regenerative and restorative practices to meet the needs of the present without compromising the ability of future generations to meet their own needs. One can readily identify two camps of people with respect to definitions. One camp is drawn to the idea of an “umbrella construct” whereby related ideas such as sustainability, regenerative, and restorative are treated as interrelated and expressions of a common concept. The other camp is described as “validity police” that tends to apply a narrower and more rigorous definition. I fall in the umbrella construct camp. I have grown a bit tired over the years taking part in what are oftentimes less than productive debates between proponents of one expression over another. One can see a pattern of almost “faddish” behavior to critique yesterday’s label in favor of today’s and then repeat again tomorrow. I see present critiques of the sustainability definition – in favor of such terms as regenerative and restorative – as falling into this realm. I propose these expressions need not be the enemies of one another – quite the contrary in fact. All of that said, I recognize many readers may in fact be drawn to the validity police camp a periodically vigorous debate over definitions can serve as a useful exercise. So I invite productive discussions. For additional useful commentary, see Hirsch, Paul M., and Daniel Z. Levin. “Umbrella advocates versus validity police: A life-cycle model.” Organization Science 10, no. 2 (1999): 199-212 and Gond, Jean-Pascal, and Andrew Crane. “Corporate social performance disoriented: Saving the lost paradigm?.” Business & Society 49, no. 4 (2010): 677-703.
3Carson, Rachel. Silent Spring. Fortieth Anniversary Edition. Houghton Mifflin Harcourt, 2002.
4Okun, Arthur M. Equality and efficiency: The big tradeoff. Brookings Institution Press, 2015.
5Okun was chairman of the Council of Economic Advisors (CEA) under U.S. President Lyndon Johnson. The CEA is responsible for advising the president on economic policy.
6This is also known as “equality of outcome” where your income is considered an ‘outcome.’ The Gini coefficient is an oft-used measure of income equality (or inequality) intended to represent the income distribution of a group of people, most commonly at the national level unit of analysis, on a scale of 0 to 1 . A Gini coefficient of 0 depicts a scenario where there is absolutely no deviation between the individuals of the group where everybody has the exact same income – i.e. complete equality. A Gini coefficient of 1 depicts a scenario where one individual in the group has all of the income and everybody else has none – i.e. complete inequality. The Nordics demonstrate comparatively lower levels of income inequality with Sweden having most recently scored a 0.25, for example, whereas the U.S. has comparatively high levels of income inequality having most recently scored 0.45. (Source https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html). Equality of income is one measure of economy equality. Equality of wealth is another. Of course, these are related concepts as inequality in income, or time, will accumulate as greater and greater inequality of wealth. For more about this, see Piketty, Thomas, and Arthur Goldhammer. Capital in the Twenty-first Century. Cambridge Massachusetts: The Belknap Press of Harvard University Press, 2014. Piketty, Thomas, and Arthur Goldhammer. I will later discuss “equality of opportunity.” A measurement of equality of opportunity is the Social Mobility Index for which the Nordics top the world. These are related concepts but differ in some fundamental ways that will be more thoroughly explored in Chapter 2 and 3.
7Okun (2005: 4) stated “The presence of a tradeoff between efficiency and equality does not mean that everything that is good is necessarily bad for the other. Measures that might soak the rich so much as to destroy investment and hence impair the quality and quantity of jobs for the poor could worsen both efficiency and equality. On the other hand, techniques that improve the productivity and earnings potential of unskilled workers might benefit society with greater efficiency and equality.” Nevertheless, as the book title indicates, the framing of efficiency and equality are, on the whole, considered as presenting a tradeoff where to get one you are likely to have to give up the other.
8Friedman, Milton. The social responsibility of business is to increase its profits. New York Times Magazine. 1970.
9I have today come to realize a rather cavalier attitude amongst a number of influential economists to stick with the assumption that markets will solve everything. In response to a question about Greta Thunberg calling for fossil fuel divestment to limit the mounting harms of climate change at the World Economic Forum in Davos in 2020, U.S. Treasury Secretary Steve Munchin said “Is she the chief economist? …. After she goes and studies economics in college she can come back and explain that to us.” https://www.theguardian.com/business/2020/jan/23/greta-thunberg-told-to-study-economics-by-us-treasury-secretary-steven-mnuchin.
10A substitute in economic theory is a product or service that a consumer considers as effectively the same, or so similar to another product or service, that they are almost interchangeable.
11It should be noted that Okun was from the political left in the U.S. who served as chairman of the Council of Economic Advisers to U.S. President Lyndon Johnson and whose primary influence was John Maynard Keynes. Said another way, this was not a right leaning Milton Friedman economist type but rather a leading left leaning economist type. The commonality here is this was the dominant perspective by economists. The dominant line of thinking among economists in the U.S. context was there was little reason to take concern with environmental degradation as the market would sort it all out through pricing mechanisms (i.e. degradation of a particular resource would lead to its scarcity and an increasing price that should reduce its consumption and subsequently reduce its scarcity), or limitless potentials for substitutions (i.e. all the trees cut down for houses? Use aluminum!)
12Materiality is an accounting term that effectively means something is relevant or significant. We will discuss materiality later when we introduce the Sustainability Accounting Standards Board (SASB).
13The SDGs are a result of a multi-stakeholder process conducted throughout 2013 to 2014 with governments, nongovernmental organizations (NGOs), and the business community taking part in the negotiations. After 13 sessions, the UN General Assembly Open Working Group on Sustainable Development Goals submitted their proposal of 17 SDGs and 169 targets to the 68th session of the General Assembly in September 2014. On December 5, 2014, the UN General Assembly accepted the proposal and the SDGs came into effect for the period of 2015-2030.
15“Food waste is a vastly overlooked driver of climate change” Washington Post 2018. https://www.washingtonpost.com/news/theworldpost/wp/2018/07/31/food-waste/
18Jorgenson, D. W., & Nomura, K. (2007). The industry origins of the US–Japan productivity gap. Economic Systems Research, 19(3), 315-341.
19The American W. Edwards Deming is widely credited as having brought the ideas associated with lean manufacturing and productivity to Japan. Deming also played a role to help bring these concepts that he perfected in Japan ‘back’ to the U.S. So perhaps I should set my sights on being the Deming of Nordic sustainability rather than my previously stated aspiration to be the Flava-Flav of the Nordics. Although, unlike Deming, I merely observed the superior sustainability performances and practices in the Nordics and played no role in its establishment.
20https://www.youtube.com/watch?v=E2Bqx3iXFdM. For a response see https://www.youtube.com/watch?v=JXecLXlzEXE&t=31s.
22In a 2019 conversation with U.S. Congresswoman Alexandria Ocasio-Cortez, the congresswoman asked Thunberg if the Nordics can be an inspiration for other countries, such as the U.S., she replied: “Many people, especially in the US, see countries like Sweden or Norway or Finland as role models – we have such a clean energy sector, and so on. That may be true, but we are not role models. Sweden is one of the top 10 countries in the world when it comes to the highest ecological footprints, according to the WWF – if you count the consumer index, then we are among the worst per capita.” In SDG terms, the challenges Thunberg raises are encapsulated by SDG #12 Responsible Consumption and Production and SDG #13 Climate Action. And Thunberg is 100% correct. Dramatic improvement in SDG performances are needed in particular areas even within the globally leading SDG performers. The earth is a system and we are using more than it can replenish or absorb. The Nordics and all virtually all developed nations demand dramatic improvements for SDG #12 and SDG #13. Thunberg’s calls echo those of the report associated with the SDG Index in which Jeffrey Sachs (et al., 2018) and colleagues offered: “This year, three Nordic countries, Sweden, Denmark, and Finland, top the global SDG Index ranking, yet all three still face major challenges in achieving the SDGs.” SDG #13 Climate Action and SDG #12 Responsible Consumption and Production were highlighted as demanding the urgent action. The SDGs are set to expire in 2030. With headlines like “Planet has only until 2030 to stem catastrophic climate change” the challenges of sustainability are upon us and rapid action is needed. Young Greta Thunberg has rapidly become the global face calling for this action. In December 2018, Thunberg was invited to address the United Nations Climate Change Conference, and in January 2019 she was invited to speak at the World Economic Forum at Davos. At Davos, she spoke directly to the global elite and said: “Adults keep saying: ‘We owe it to the young people to give them hope.’ But I don’t want your hope. I don’t want you to be hopeful. I want you to panic. I want you to feel the fear I feel every day. And then I want you to act. I want you to act as you would in a crisis. I want you to act as if our house is on fire. Because it is.”