A major challenge in sustainable business is that many of the good things we want simply can’t be seen. The electronics equipment you are considering may have be made by people being paid a decent wage, or it may not have been. You don’t really know the difference from just looking at the product. Gregory Unruh discussed the challenge of tangibilizing sustainability’s value for stakeholders. By this he means allowing us to see the benefits of better business practice.
Tangibilizing Sustainability’s Value For Stakeholders
What Unruh means by tangible is a little different to the general idea in accounting and wider business. The product can be tangible, e.g., a TV, but this does not mean that its sustainability (or otherwise) is tangible. In many ways, to Unruh tangibilizing sustainability’s value for stakeholders just means making sustainability clearer. Providing clarity, unlike tangibilizing, probably didn’t sound quite grand enough for an HBR article as the word clarity doesn’t give enough points on the SATs.
How then can we show that something is sustainable when it has no physical manifestation? One option is for the marketer to make public claims. These claims may be, hopefully are, true. Still, it relies on considerable trust to take a manager’s word for it. Such trust often isn’t there. To be honest, sadly often the trust shouldn’t be there. Managers do sometimes lie, or more generously, maybe they don’t know what they are talking about.
Another option is to make claims more tangible is through third-party certifications. Labels like “Certified Humane” or “Fair Trade” are more tangible than marketing, because they’re backed by verifiable standards. It’s analogous to having a company’s financial statements audited and certified by accountants.
Unruh, 2024
A third party can certify products, and provide you believe the third party that should be quite effective.
What About When There Isn’t Even A Tangible Product?
Sometimes the benefits are even less clear, especially when you are talking about things that will happen in the future. Future benefits are not here and, indeed, are often quite uncertain. Still, different choices will lead to different sustainability outcomes so we can’t just cynically not believe anything if we want to make progress. This makes the problem very difficult.
The article then takes a turn toward the more specific. Unruh wants to describe the benefits of AI for sustainability. He is more positive than you might expect given the energy requirements of AI but he clearly is keen on AI.
This isn’t obviously delusional. It is possible to imagine a world in which the energy requirements are managed down, requirements are fulfilled with clean sources, and the robots don’t kill us. In this world we could expect to see sustainability benefits from AI. Why? Well, for example, a key part of sustainability is optimization. It is a win for everyone if AI can help us do things more efficiently. When we do something more efficiently we haven’t given anything up and yet have managed to reduce our drain on resources. You don’t need to believe that AI will solve all our problems to think that it might help on some issues.
Fighting Fire With Cabbages
That said, Unruh’s example seemed a little weak to me. The example was more efficient cabbage buying to make kimchi. Thus, his AI predictive analytics interface can help make kimchi preparation more efficient. I’m not saying Unruh is wrong, more efficient kimchi production is a good thing. Still, I’m not sure those who lie awake at night worrying about AI will be won over when they hear that we will be able to better predict cabbage prices as our robot overlords wipe out all life on the planet.
For more on sustainability see here and the problems of tangibility and intangibility see here
Read: Gregory C. Unruh (2024) Making Sustainability More Tangible, Harvard Business Review Digital Article, March 15, 2024
