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For some time now I've been advocating ways for businesses, institutions, and individuals to heed the "Voice of the Planet."  Indeed, the future depends on it. Here's what we said a while back:

How do profit-seeking companies listen to the Voice of the Planet?  As my colleague, Sanjay Sharma and I suggest, start by drawing a clear distinction between "core" stakeholders--those visible and readily identifiable parties (like current customers and suppliers) with a stake in the firm's existing operations--and "fringe," or peripheral stakeholders.  Core stakeholders encourage us only to continuously improve what we already do.  Yet, answering the question of our time calls for disruptive, leapfrog innovation, which requires divergent thinking.  This means reversing the traditional stakeholder management model by learning to actively engage previously excluded voices from  the fringe-- the rural poor, urban slum dwellers, and advocates for nature's rights, just to name a few.

It has now been more than a decade since C.K. Prahalad and I first published the article "The Fortune at the Bottom of thePyramid" which launched the "BoP" business movement.  Over the past decade, there have been fits and starts: many BoP ventures have failed; others have been converted to philanthropic programs; but only a few have taken root and gathered significant commercial momentum.

I've just returned after a full week at the Rio + 20 UN Conference on Sustainable Development. 

As everyone knows by now, the "main event"--the official negotiations among government leaders--was a disappointment.  The general consensus among participants was that the official agreement, spelled out in agonizing detail in a document entitled "The Future We Want," would not produce the future we want.  It is, at best, an exercise in rearranging the deck chairs on the Titanic.

As the week wore on, it became clear to me that the so-called "side events" (organized by companies, NGOs, and consortia) had really become the main event.  At the Rio + 20 Corporate Sustainability Forum, organized by the Global Compact, for example, there was an air of excitement, commitment, and resolve among the business leaders present.  Statoil, the Norwegian oil giant, advocated the elimination of fossil fuel subsidies (totaling in excess of $600 billion each year), and setting a price on carbon.  Bank of America made a $50 billion commitment over the next decade to renewable energy and a low carbon future.  Siemens announced a corporate goal of $40 billion in sustainable technology by 2014 and stated emphatically that it's a race to save the planet--and their own future.



At the Business Action for Sustainable Development (BASD) "Business Day" organized by the World Business Council for Sustainable Development, session after session focused on the importance of leapfrogging to clean technology solutions and accelerating private sector initiatives aimed at eradicating poverty.  Indeed, the theme for the meeting was "Scale Up." Paul Polman, the CEO of Unilever, delivered an impassioned keynote address stating that "never before in history have we been so forewarned, and forearmed at the same time."

In short, the contrast between the upbeat, well-organized side events, and the resigned, chaotic nature of the official negotiations could not have been more stark. 



One day, while trapped in a 2- hour long traffic jam amid heavily armed but confused legions of Brazilian soldiers, it hit me: the official negotiations have really become little more than symbolic cover for the side events, where the real commitments are being negotiated.  

Without the burden of "main event" status, the side events were able to focus on getting things done.  No protesters, traffic snarls, media circuses, or distractions. While thousands gathered in Flamengo Park to raise their voices for the legitimate concerns of the 99%, the side events proceeded at hotels in Barra without interruption--and focused on how to address the root cause of their concerns.  And while hundreds of women protesters would not allow Iranian President Mahmoud Ahmadinejad to leave his hotel in downtown Rio, side event organizers were busily making things happen and getting things done. 

On the way back, I noticed Richard Branson was on the same plane as me. I left Rio feeling hopeful--that I had participated in something important; that there is a growing recognition that incremental greening will not deliver global sustainability; and that the leverage point for achieving this transformational change is the enterprise sector.

Twenty years ago, in 1992, the first Rio Earth Summit took place in Brazil.  While it was convened amid great fanfare and high expectation, the only really lasting legacy was the creation of the World Business Council of Sustainable Development (WBCSD) and the christening of "eco-efficiency"--doing more with less--as a key private-sector based strategy for sustainable development.  The governmental negotiations produced a massive volume--"Agenda 21" but little concrete action.

Next week, the Rio + 20 Summit will convene, again in Brazil.  The past twenty years has produced some good news and some bad news.  First the good news: Eco-efficiency has become standard practice in large corporations everywhere and is now spreading to the world's small and medium sized enterprises as well. This is a major accomplishment and has significantly reduced the impact per unit of output in economic activity. 

Now for the bad news: we have not yet begun to actually slow or reverse the level of human impact on the planet.  Indeed, over the past twenty years, we have tripled the size of the global economy, added nearly two billion people to the world's population, and further intensified our ecological footprint on the planet.  Growth swamped eco-efficiency.  Today, the science is clear: we have overshot the carrying capacity of the planet and serious repercussions are now inevitable.

In 1997, I wrote an article that appeared in the Harvard Business Review entitled Beyond Greening: Strategies for a Sustainable World. The piece won the McKinsey Award in 1997 as the best article in HBR.   The article stressed that corporate eco-efficiency (greening) strategies aimed at incrementally reducing negative social and environmental impacts, while important, would not be nearly adequate to the challenge of global sustainability in the decades ahead.  Even then, it was clear that "beyond greening" strategies--leapfrog clean technologies, and business models that included and lifted the four plus billion poor in the developing world--would be essential if we were to fundamentally change the course of the global economy, and set it on a course to sustainability.

In the 1990s, people spoke in terms of the need for fundamental change over the next decade or two.  Indeed, the title of the WBCSD's inaugural book was "Changing Course."  Unfortunately, all we got was continuous improvement through eco-efficiency. 

As I prepare to leave for Rio next week, my hope is that this Summit can plant a new stake in the ground--the Beyond Greening Stake.  I will do everything I can to drive this agenda.

We are running out of time.

We accept it almost without question—prognostications about the future which begin with the phrae: “if present trends continue…”  Extrapolating present trends into the future has become a stock technique for both those on the political left (e.g. “if present trends continue, the gap between rich and poor will continue to widen”) and on the right (e.g. if present trends continue, GDP will double again within the decade”).

Consider the following trend:  China consumed more energy in the past ten years than it did in its entire history, spanning thousands of years.  The vast majority of this energy was in the form of fossil fuels.  If this trend in energy consumption continues, then by 2020, China would consume virtually all of the oil currently produced for export in the world today.  And, by 2030, China’s oil consumption would exceed today’s total global production of petroleum.  What is the likelihood that this trend continues? 

Even if we set aside the obvious implications of this trend for climate change and assume that the world embarks on the all-out development of unconventional oil reserves (in the form of shale oil and tight oil), to compensate for the now declining world production of conventional oil, it is not clear that production could be ramped up at a sufficient pace to meet this exponentially rising demand.

It is important to note that similar projections of current trends into the future are commonplace in virtually every domain, including the production of food, consumption of water, and emission of greenhouse gases into the atmosphere.  The reality, however, is this:  it is highly unlikely that any of the current trends in the world can or will continue into the future for very long.

Nor should we expect them to.  History is filled with game-changing discoveries and events that fundamentally alter the trajectory of society and civilization.  Consider for a moment how future projections for energy and food production appeared in the 1890s, just prior to the explosive growth of the oil industry, automobile industry, and the rise of mechanized agriculture.  No one could have anticipated how radically the world would change in a relatively short period of time.

So expect a very bumpy and exciting ride over the next decade or two.  Nothing will stay the same.  We are approaching a time of unprecedented turbulence, change…and opportunity. 

Schumpetarian creative destruction will reign supreme.  Many incumbents will fall, and entirely new industries will be born.  An age of entrepreneurship on a scale that we cannot yet imagine is about to be unleased.

There is only one trend that we can really count on:  Present trends will not continue.

Since the dawn of the Industrial Revolution, economies of scale have ruled the day, with massive investments in power plants, pipelines, factories, transmission lines, dams, and highways to more efficiently serve the burgeoning consumption needs of the rising consumer classes. Industrial-era technologies (such as electricity, petrochemicals, and automobiles) were also closely associated with mass production, the assembly line, and centralized, bureaucratic organization, resulting in the rise of organized labor, worker alienation, and growing social stratification.

As we enter the second decade of the new century, however, the "dark satanic mills" of the Industrial Revolution are giving way to a new generation of technologies that promise to change dramatically the societal, economic, and environmental landscape. The information economy powered by the microchip has already begun to revolutionize society by democratizing access to information and empowering the repressed. Indeed, You-Tube, Twitter, and the rapid emergence of the "blogosphere" have spawned a bottom-up revolution in user-generated content.



Increasingly, the technologies of tomorrow will be decentralized, distributed in character and disruptive to incumbent firms and institutions. It is much cheaper and more energy efficient, for example, to treat drinking water at the point of use, rather than transporting massive quantities of clean water through pipes from treatment plants only to have much of it leak out or be re-contaminated before it reaches its final destination.

Indeed, we are witnessing a dramatic reversal of the logic of scale--the new diseconomies of scale.

Think about it: Over the past decade or so, we have witnessed the rise of: distributed generation of energy, point of use water treatment, community supported agriculture, microbreweries, point of care healthcare, microfinance, and sustainable construction, to name just a few. Indeed, the term "nano" has become de rigeur.

Because existing players in the utility, energy, transport, food, water, and material sectors have so much to lose, however, it is enormously difficult for the entrepreneurs developing such distributed solutions to gain traction in established markets. Yet given their small scale and distributed nature, such clean technologies hold the potential to creatively destroy existing hierarchies, bypass corrupt governments and regimes, and usher in an entirely new age of capitalism that brings widely distributed benefits to the entire human community.

And rather than depending on national governments or paternalistic social engineers to design the future for the aspiring masses, these disruptive new technologies may be best brought forward through the power of capitalism--not the capitalism of the Industrial Revolution, which enriched a few at the expense of many, but rather a new, more dynamic form of global capitalism that will uproot established elites and unseat incumbents by creating opportunity at the base of the economic pyramid on a previously unimagined scale.