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Rethinking the Discourse
Kevin Gibson wants to revise an influential way of thinking about sustainability.
“I know that nothing which truly concerns man is calculable, weighable, measurable.” Antoine de Saint-Exupery.
Since the influential 1987 Brundtland report on behalf of the United Nations, Our Common Future, the concept of sustainability has gained traction in scholarly work and university life. That report defined development as sustainable when it “meets the needs of the present without compromising the ability of future generations to meet their own needs.” The urgency of action for sustainability comes from indisputable data about the world: the population is growing exponentially, and people have greater material aspirations. The Earth has limited resources that will drastically decline unless we consume less and replenish more, perhaps by using alternative technologies or recycling. Without change, the effects of pollution, reliance on carbon fuels, and limited access to nutrition and clean water will become ever more pronounced.
Philosophy has a lot to offer sustainability. The way that the issues are framed and the most basic assumptions are open to philosophical assessment. For example, much of the current discussion is based on Western notions of what counts as knowledge, and looks to technological rather than social-behavior-based solutions, but these are assumptions. Additionally, the sustainability discourse often unreflectively employs the language of property and economic rights, which can systematically discount other approaches. Another problem is the belief that we can impose monetary values on everything – an assumption that, if incorrect, will make all the difference in, and to, the world. Consequently, it is useful to consider a typical approach to sustainability, and examine it through a philosophical lens.
Sociologists suggest that in typical arguments, the first person to present a case effectively frames the discussion over 80% of the time. Applying this to sustainability, the dominant narrative has been termed the Triple Bottom Line approach (3BL) by its formulator John Elkington. He proposed that sustainable development should include not only traditional profit and loss, but also its total impact on the planet, including its environmental and social effects (the ‘second’ and ‘third’ bottom lines).
The Triple Bottom Line
The Triple Bottom Line approach advocates tackling sustainability through a consideration of the economic, environmental and social impact of business operations. It thus seeks to account for costs that would otherwise be passed on to third parties or future generations. For example, shrimp farming can be considered lucrative. In the early 1990s, the Indian government was eager to promote economic development, and so, with assistance from the World Bank, it actively recruited international companies to harvest seafood. The industry has indeed seen tremendous growth and profitability in the last two decades. However, shrimp farms in reclaimed mangrove swamps only last about ten years, and then the area becomes useless from oversalination and pollution from the accumulation of protein. Moreover, the shrimp farms displace local farmers, and traditional sustenance activities become untenable, fresh water sources are affected, and most of the workers employed are seasonal migrants.
Judged through a short-term economic lens, the shrimp farms have been a considerable success: but they have caused considerable environmental and social damage. The 3BL agenda says that in making sustainability assessments, decision-makers need to account for the overall value added and lost. Proponents point out that it links together good business, environmental protection and social responsibility (sometimes described as ‘Profit, Planet and People’). Careful stewardship of current resources and the cultivation of future ones is touted as beneficial to the corporations involved. For instance, the international audit firm KPMG commissioned a report in 2010 which documented a ‘clear increase’ in corporate sustainability efforts, since 72% of companies with revenues over $5 billion had put a sustainability program in place. The report noted that “the commercial benefits are obvious.”
Elkington himself suggests that the most pressing issue for sustainability is to develop accounting methods to facilitate 3BL comparisons, and believes the central task for theorists is to develop ever more sophisticated systems of measurement. In critiquing 3BL, commentators have noted that assessing value added and lost cannot always be reduced to quantifiable financial units. Additionally, this prevailing 3BL discourse legitimates transnational capital, technological solutions, and ideas of progress that may be inimical to the world-view of many of the people it affects. Challenging the prevailing views will rely on arguments about the foundations of knowledge, and whether human values can always be properly assessed by aggregated market preferences.
The Fungible & The Intangible
To explore the notions of sustainability and 3BL accounting, it will help for us to consider the differences between the fungible, the intangible, and the sacred. ‘Fungible’ refers to fully interchangeable economic goods. In economic terms, an ‘intangible’ is something without a physical existence which can still be valued and sold – examples are goodwill, or a patent. The ‘sacred’, as we will see, is harder to measure. Indeed it may be priceless, and so present far more challenges for 3BL approaches.
Fungible goods are tangible assets that can be exchanged, or substituted with a value agreed equivalent to the item. A market price for the good emerges when a buyer and seller agree on an exchange. In this way the value of something becomes what someone is willing to pay for it. So although we might imagine that financial reporting is objective, markets are in fact social constructs: underlying them is a set of conventions, such as the Generally Accepted Accounting Principles (GAAP), and the International Fair Reporting Standards (IFRS), which represent ways we have agreed to value goods.
Intangible assets found on the balance sheets of many corporations include things such as copyrights or software patents. They have no physical existence. A computer is a tangible asset, but its operating system is intangible. Nevertheless, there is an active market for business-sheet intangibles: they can be valued, compared, bought and sold, and they are typically accounted as assets owned and controlled, which could be disposed of at will.
Therefore, the first bottom line of the Triple Bottom Line approach measures goods and services that have value by virtue of potential market exchanges and accepted rules of accounting. Here we find the fungible items ranked by their liquidity of exchange, starting with cash. Then the calculations progress down to intangibles that still are valued by more or less traditional methods, and which can be bought and sold. The promise of 3BL, however, is that it can extend market metrics to environmental and social concerns. How is that to be accomplished? One way to do this is to create ‘artificial markets’ and extend notions of property rights and private ownership to them. An example is the international cap-and-trade regime which serves to limit the amount of carbon emissions by assigning pollution licenses, and then allowing states to make market exchanges with their allowances.
Consequently, although 3BL has three strands, in practice it subsumes environmental and social concerns as subsets of an overall financial analysis. Moreover, it is often taken as axiomatic that we will put a high price on things we value – with the converse implication that the failure to assign a price to something means that it is not valued. We may take clean air or water for granted, but by assigning a price we say what we would pay to have them, or, alternatively, to not relinquish them. The idea is that by creating a common baseline of monetary amounts we can then readily compare options, for example, whether we would be prepared to accept more pollution in return for increased employment. Thus there is an underlying assumption that if we can just find and agree to adequate pricing mechanisms, then the market will be the best means to arbitrate decisions about sustainability. Here again, there is emphasis on what is measurable. However, while there are ready metrics for assessing wages and maintaining safety standards in the workplace, what will be our metric for people dis placed by deforestation, or for the ruining of ancient traditions?
The measurement problem is a symptom of deeper concerns. 3BL’s reliance on quantitative and especially monetary comparisons reveals its foundation in a worldview that takes individual ownership and property rights as paramount and universal. The economic model underlying 3BL also assumes that those affected have equal wealth, so that, for example, they would be willing to pay to preserve what they value. However, given wealth and power disparities, will the market really be an efficient means of balancing values fairly for all involved?
Consider the attempt to patent native knowledge. The plant turmeric has medicinal qualities. For centuries, Indians and other South Asians have used it as an antiseptic and antibacterial agent. However, in 1995 a patent was granted to the University of Mississippi Medical Center for its use in healing wounds, thus turning folk knowledge into an ‘intangible asset’. The Indian Council of Scientific and Industrial Research labeled the action ‘biopiracy’. One response argued that it was acceptable to grant the University a property right, because according to Western legal theory, claims to Intellectual Property Rights require two things: an individual creator or group of creators, and an identifiable creative act. On this reasoning, the Indians didn’t have property rights over the plant. However, this explanation is unconvincing, since it is self-verifying: it defines property in terms of physical objects or individual creators, and then says that because traditional knowledge does not fit this definition, it cannot be stolen. Yet from a non-Western perspective, innovation is an intellectual common pool that benefits everyone and belongs to no-one. Thus intellectual and cultural heritage might be better thought of as a bundle of human relationships rather than a bundle of economic rights.
The standard way of putting a price on intangible assets is to create a virtual market using the technique of ‘contingent valuation’. It works by asking people questions such as ‘How much would you pay to preserve wild elephant habitats?’ and then aggregating the results. However, the difficulty in measuring intangibles is most apparent in looking at sacred values: those intangibles which literally may be priceless. The word ‘priceless’ does not mean they are extremely expensive: it means that they are beyond the market. Sacred things are not fungible – there is no equivalent item or amount that would be appropriate to exchange for something sacred. The realm of the sacred represents deep personal commitments that people will not trade. In these cases monetization falls short.
Classical economic analysis depends on trade-offs to establish prices. Nonetheless, this belief that it is possible to make everything into a commodity goes against the evidence. For example, the Sioux tribe has consistently refused to accept compensation for the historical compulsory land acquisition of the Black Hills: they believe doing so would legitimate the property regime of the people who took the Hills off them. Other research indicates that offering material exchanges for compromises in sacred values often leads to deep offense.
It appears that attempts to make the sacred into a fungible (exchangeable) commodity will inevitably be flawed. This is illustrated nicely in a study where researchers in New Zealand asked Auckland residents how much they would be willing to pay to preserve a pristine volcanic island, Rangitoto, which sits just outside Auckland harbor. A significant number gave either zero or an infinite number as the response; but even among those who gave a real number there was considerable discrepancy with their reasoning when interviewed about the choice. The authors concluded that the respondents had given a number because that’s what the researchers demanded, but that this did not reflect their real feelings. Many said that it would just not be right to interfere with the island, or that it was not a question of compensation. The authors concluded, “The message we often got presenting our ‘development’ scenario was of grief and a strong sense of loss when such things in the world become reduced to their commercial, monetary value … so what is the value of Rangitoto? It exists.” (D. Vadnjal and M. O’Connor, ‘What is the value of Rangitoto Island?’ Environmental Values 3, 1994).
If it is true that the sacred defies commodification, then sustainability questions are more than a technical problem to be overcome with increasingly sophisticated analytical tools. Instead, the sacred challenges the very idea of market solutions. This implies that 3BL works up to a point, but it will break down when it tries to deal with this critical component of the sustainability discourse. It turns out that the saying, “Everything has its price” is wrong, both conceptually and in practice.
One solution to the problem the sacred presents may be to reverse 3BL’s approach of using pricing techniques to establish value: we would do better as a necessary first step to engage in stakeholder dialogues about basic values. Initiatives of this kind are already in place for the management of cultural heritage sites. This model, with its radical re-imagining of 3BL based on paramount respect for fundamental stakeholder values, could be applied much more broadly.
Creating Alternative Approaches
Despite its origins in a corporatist view of sustainability as economic growth, 3BL might best be seen as a metaphor to remind us that there can never be a single bottom line, only multiple and conditional bottom lines. The language of 3BL is rhetorically powerful, and does convey an important message about sustainability. Uncoupling sustainability from a purely quantitative approach will not unravel the concept: rather, it encourages an approach that effectively inverts the role of prices and values. The dominant view of 3BL begins with the economic bottom line, and then deals with intangibles, hoping that it can incorporate sacred values along the way. By contrast, the discourse of sustainability must begin with a framework of what matters most to people, not just what brings the maximum financial benefit.
This would go some way to fulfill the recommendations in Our Common Future of stakeholder engagement, transparency, and equity between generations. This does not just involve trying to decide how much to compensate a poor community to accept a hazardous waste dump in their backyard; it requires a dialog about what both sides value, and how those values are realized. In short, a profoundly philosophical discussion should be incorporated into the political/economic decision-making process.
Value-based discussions would be informed by more complex scientific information, stakeholder input, and ethical attitudes. They would consider both quantitative and qualitative factors, and would rely more on deliberative judgment rather than Western assumptions of property rights and monetary compensation for losses or wrongs incurred. Starting with a values discussion would appear to invite excessive complexity, conflicting narratives, and intractable disputes. Nevertheless, the lure of simplicity is a false economy if it is based on a discourse that systematically disempowers marginalized groups. Sound monetization would follow from agreements about shared values, not emerge from market mechanisms which favor established corporate and political interests.
To illustrate alternatives to policy decisions based on the market, consider the case of heritage management. Some sites and monuments have been designated as having outstanding value, either by UNESCO or by governments. Such sites have management plans which incorporate multiple stakeholders. Decisions may be based on cost-benefit analysis, perhaps by looking at the income a site might generate as a tourist attraction. However, UNESCO recognizes that some stakeholders do not have economic power and their voices would be marginalized by this technique. The plans therefore deliberately incorporate consultation and principle-based approaches, and look at the long-term impact for all parties. Thus at Hadrian’s Wall in England, or Chaco Canyon in America, the fundamental management principle is one of sustaining the area with maximum regard for all stakeholders, even when they have competing interests. For example, local farmers may be restricted in the extent to which they may modernize their practices, and tourist operators may have to forego income when some areas are put off limits. In practice, then, no one stakeholder is ever fully satisfied; but nevertheless, there is a shared vision about the importance of sustaining the site, and an acknowledgement that all voices should be heard. That is, policy-makers start with a discussion of basic values and later use economic analysis as a tool, rather than presuming that what is most economically efficient is automatically desirable.
The philosophical significance of this sort of plan is that it shows there are ways to think about sustainability that rely on ethical foundations. Without those kinds of discussion we are likely to be trapped in policies which favor economic efficiency but do not ask whether or not that should be the over-riding principle, or whether those affected share that value system.
The emergence of 3BL has been an integral part of the discourse about sustainability in the last quarter century, and a significant factor in the global recognition that we have responsibilities to protect resources for future generations. At the same time, the market-based understanding of 3BL fails when it deals with the priceless values that matter most to stakeholders. Therefore we need to reconceptualize 3BL so that it begins with a discussion about shared values before making decisions based on cost-benefit comparisons. In 1987 the Brundtland Report announced the time had come to break out of old approaches to development and resource protection. Moving to a model which has paramount respect for fundamental stakeholder values is a welcome step forwards.
© Dr Kevin Gibson 2012
Kevin Gibson is Associate Professor and Director of Graduate Studies in Philosophy at Marquette University in Milwaukee.