Marketing Thought

Building Allies For Sustainability

Paul Hawken’s The Ecology of Commerce has many elements of a classic. It influenced a lot of future thinking, and indeed action. For example, Interface Carpets moves to sustainability were informed by Hawken’s arguments. One of the things that struck me about Hawken’s book (I read the revised 2010 edition) is how he has positive, and some not-so-positive, examples of getting people on board. What can we learn from Hawken about building allies for sustainability?

Green Taxes

Externalities are costs imposed on someone else by your choices. The logic of green taxes is hard to argue with if you believe in externalities. And if you don’t believe in externalities that is really odd given some of them are completely obvious. Who has not breathed in someone else’s car fumes and thought, “I wish I had a bit less of that but I didn’t choose their car or where they drove it?” The car fumes are externalities, and car fumes certainly exist.

The problem Hawken notes is that the true cost of something often doesn’t show in the price we pay. Our financial systems, including accounting records, do a pretty appalling job of capturing many crucial aspects of business. Management and consumers won’t see something as a cost if the financial system doesn’t show it as a cost. The logic of green taxes is simple, that these hidden costs should be made manifest so they can influence choices. The externalities will be a cost because you’ll be paying the costs as a tax. Taxes focused on externalities in this way are called Pigouvian Taxes. (That sounds like a fancy name but they are only named after Pigou, the economist who proposed them).

Pigouvian Taxes

Hawken’s logic here is strong to my mind. Indeed, it has an overlap with the problem of measuring the value of brand (see here). The link is that just because something is hard to do doesn’t mean we shouldn’t be trying to do it given the major problems that are caused by not doing it.

Critics assert that externalities are hard to measure, but they overlook the fact that trying to measure negative costs is preferable to ignoring them altogether, that is it better to be approximately right than completely wrong.

Hawken, 2010, page 122

Upper Middle Class Concerns?

Hawken, rightly, worries that environmental issues should not be seen as a “province of the upper middle class” (page 137). This is a genuine concern. Bad environmental policy often hurts the poorest most. He, therefore, made a lot of sense in arguing that any taxes shouldn’t be seen as punitive. The taxes are there to change behavior, to encourage purchase of lower social cost items, not to collect revenue as such.

Every incremental dollar collected from green taxes should reduce income or payroll taxes, starting with the lowest income brackets and moving to the highest.

Hawken, 2010, page 145

This isn’t easy to deliver but this is a sensible ideal.

Random Comments: Not Building Allies For Sustainability

One of the things about the book that I appreciated was the occasional crotchety comments. I share his worries about the sort of leadership advice that relies upon some ancient mass murderer.

A recent profile in a business magazine of a proto-typical successful executive described his Modus Operandi as taking no prisoners, having the hands-on quality of Attila the Hun, and not suffering fools gladly but shooting them on sight. That was all meant as a compliment.

Hawken, 2010, page 122

I’m with Hawken. Serious question: what sort of arsehole do you need to be to think that taking no prisoners is a positive thing?

Still, maybe we need to persuade those who like Alexander the Great to get on board (see here, and here). This may be possible as I’d suggest Alexander would have been all for the conservation of wild mammals — mostly so he could hunt and kill them later but you should take the wins that you can get.

Bad Math Models And Persuasion

Hawken also decided to lay into mathematical models.

…mathematical models based on no data whatsoever…

Hawken, 2010, page 68

I wasn’t quite sure why math models were bad. It seemed a bit random. Surely a lot of ecology, which is his guide for economics, is also developed from math models?

His random unnecessary attack did illustrate a wider point. I did sometimes find that Hawken wasn’t as clear as he could have been and he may drive people away. Sometimes he sounded extremely radical, and sometimes not radical at all. I was pretty sure that there was something for everyone to dislike in the book. Some of that may be time passing as ideas of how best to construct an argument change. Still, it does illustrate a point to bear in mind. To get things done, e.g., Pigouvian taxes, lots of people need to be won over. That is key to success. How can we win people over?

Conservative Or Conservationist

At times Hawken did sound like a bit of a grumpy old man. A few times I ended up saying to myself — why did he focus on that?

Who determines it is time for …virgin timber in British Columbia to become phone books and lingerie catalogs?

Hawken, 2010, page 107

Is it worse to cut a forest for a lingerie catalog, as opposed to any other type of catalog?

It is unlikely that an American soft-drink company questions whether its commercials of oversexed women in metallic bustiers shown in rural areas of Buddhist Thailand have an positive effect on the local mores.

Hawken, 2010, page 104

What is his definition of oversexed? Why does it apply only to women? To be fair, he may have had a specific woman, Madonna (?), in mind when he wrote that originally in the early 90s. Still, the tone seems quite conservative — in the moralistic sense — which I’d say probably it is best to avoid when building allies for sustainability.

Read: Paul Hawken (2010) The Ecology of Commerce Revised Edition: A Declaration of Sustainability, Harper Business

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