From: Sustainable Industries
The Natural: Karl-Henrik Robèrt
by Becky Brun - 7.15.08
One of Sweden’s leading cancer scientists, Karl-Henrik Robèrt has become one of the most influential figures in the global sustainable business arena. The Natural Step Framework, which Robèrt authored with input from dozens of scientists in 1989, has helped countless businesses take a scientific approaching sustainability.
Hatched in Sweden,The Natural Step organization today has licensees in 11 countries and has made its way into the boardrooms of international corporations, including Nike (NYSE: NKE), The Home Depot (NYSE: HD), Bank of America Corp. (NYSE: BAC) and McDonalds Corp. (NYSE: MCD). Municipalities, schools and even the U.S. Marine Corps have adopted The Natural Step Framework.
Sustainable Industries caught up with Dr. Robèrt via phone days before he departed Stockholm for his summerhouse in Öland, Sweden.
SI: We interview many business leaders who point to The Natural Step Framework as their vehicle for change. Why do you think the framework is a more successful vehicle for change than, say, government regulation?
KHR: The reason is comprised by our explanation of Level 1. We explain how they can improve their financial records if they are a bit ahead of the game. A metaphor that we often use is the funnel.
We are systematically losing room in the funnel: Climate change is increasing, we have more and more people, the gaps between the haves and have-nots is increasing, the water tables are decreasing, there is more asphalt. We are gradually losing the potential to sustain civilization. The whole world is part of the funnel.
If you are more part of the problem relative to your competitors, your risk of being hit by those walls of the funnel increases. Then you have increasing insurance costs, resource costs, waste management costs, etc., because you are part of the problem. Other examples are that you are not seen by others as trustworthy, you lose talent wars because it’s not as fun to be employed by you.
All of these are financial punishment for those players who are part of the problem. You fail to recognize new market opportunities and new products that will suit tomorrow’s markets.
Sustainable principles are at the opening of the funnel. They explain where you are no longer part you can capture not only climate change and child labor and a few other items we find the whole world talking about today, but you capture the full power of your problems and assets.Thereafter follows a brainstorming session. In this, you make a list of the possibilities of solving your problems and being innovative for the future.
The solutions are creatively proposed and scrutinized by using the same basic principles by which you assessed the challenges. You end up with a long list [of possibilities] and most are very expensive. You make that list nevertheless. Next you ask, “How do I prioritize the solutions I just listed so I do the stuff relatively early on that is smart?”
You can prioritize by asking:
1. Which of those solutions is moving me toward sustainability?
2. Which solutions are providing a platform for the other smart options in the list so they can be added later?
3. Which of those solutions do all of these things while at the same time giving me a return in investment? Then you re-evaluate the game as it unfolds. There is always something that you can do that is smarter than the stuff you are already doing.
Many businesses think, “If I choose the sustainable option, it will be far too expensive, and that will make shareholders angry.” That’s based on a flaw. There are many more options than two. Choose the ones that satisfy the shareholders and provide a platform for smart investments.
SI: Can you explain the theory of “backcasting” and why you think it leads to higher environmental, social and economic returns than traditional forecasting?
KHR: It is only an academic term for being really strategic. Good visionaries see that goal of winning—they can almost touch it. They can turn back in time and look at where they are today, and see themselves as a vision standing in success. Backcasting arrives as a term to help bridge the gap between the present and the future. Forecasting means that you are instead departing in your planning from the current situation and trying to foresee where [current] trends can carry you.
Robust principles in the future can guide our thinking. They open up much greater freedom because they are not based on today’s trends and technologies. It’s also good for community building: When everyone in the company shares robust principles, they are spinning ideas back and forth because they know the same language.
This connects to what we said about the list of solutions: If you understand what you want to achieve, you can think outside of the box; you can see that you have more than just two options.
SI: TNS Framework is based on reaching a consensus among scientists about how to approach environmental change. Reaching consensus, especially in large corporations or government agencies can be daunting. When a company is undergoing TNS Framework to envision and create goals for the future, why is it so critical that the management team gain both buy-in and agreement among everyone?
KHR: The overall strategic plan, based on an understanding of the system a company is operating is, is the responsibility of top management. To understand the big picture and draw the right strategic conclusions is a task that cannot be abandoned to anyone else, for instance experts.
They are generally amateurs when it comes to orienting big complex organizations in the big complex world. This means that the “game” TNS plays, is a game that successful leaders get increasingly aware of. Not understanding the big picture is a way of having “bad luck” all the time. So, top management must not only “bye in” and “coach the green manager”. Top management must take ownership all together, and RUN the sustainability agenda.
With green managers and experts as sounding board, asking them the right questions that follow from the understanding of the big picture. If this is done right, top managements learn the framework, communicates its principles and guidelines to staff, and then allows people in the organization to come up with solutions like in a big family game.
One of the greatest benefits is, besides avoiding costs and other disasters at the walls of the funnel and being able to do smarter and more strategic investments to gain new market shares, community building. It is extremely beneficial for team building to have a shared mental model for what it is all about, and to learn that the organization you are working in is taking the big challenges of the world seriously.
SI: To what do you attribute the rapid growth of The Natural Step Network in recent years?
KHR: There are a few things that coincide.
1. Through the early adopters of the framework, through their engagement and practices, we have learned the game ourselves, so we have quite sophisticated tools for teaching the framework. We know how to make management systems that are cohesive with the framework: We know how to make a lifecycle assessment. We can suddenly help more organizations more efficiently than in the early days.
2. We very largely attribute our growth to awareness around climate change, which is a very obvious aspect of the walls of the funnel that has caused tension. Events such as Katrina; the UN panel on climate change, Al Gore, the Stern Report, the Iraq War…all made an impact and have made this part of everyone’s agenda.
This is good to the extent that it brings people to our arms. There is also risk, of course. The risk is that people believe that sustainability is mainly about climate change. And that is a flaw. There is no scientific evidence that climate change would be worse than: global poverty, declining food resources, nuclear power and its linkage to nuclear arms, to name a few.
We must not solve climate change with solutions that worsen other problems. You cannot solve climate change outside the context of systems thinking. If your solutions–new energy systems, for example– must be based on the same kind of assessment: How does the solution affect the agriculture, forest, etc. How do all those look like from a sustainability point of view today? What are the possible solutions for those systems tomorrow? How can we solve those in a smart way?
We just launched an international research program called Real Change based on a methodology of systematic planning for sustainability. We’re working with universities, businesses and municipalities. We are going to report back to the funders with deliverables-not only publications, but more importantly, real change.
SI: About a decade ago, in an interview with Sarah Van Gelder of YES! Magazine, you said “The green movement attacks business, and business reacts defensively.”Do you think that trend has changed in the last 10 years – have more businesses begun to take initiative rather than wait to be attacked?
KHR: No. …Those who react are still reacting. The reason is they don’t understand how to play the new game. We are in a new paradigm now. We are further along in the funnel. There is a loss of trust between people and…businesses are still a bit defensive, and not proactive enough. They are caught in the paradigm of either being good and poor, or bad and rich….If I had to pick one element of reward for us when we use [The Natural Step] model, I would say we are, in Ray Anderson’s words, “doing well, by doing good.”
Recently, in Portland, I heard him say, “We are doing better than ever, but not at the cost of the economic or social system—but rather at the cost of our competitors, that still haven’t got it.”
It requires some practice, very much like chess. Once you have explained the rules of chess, someone might say this is a very sophisticated game. You can’t remember the rules without practicing the game. Our challenge is getting people to play—we explain the framework and then they go home and they seem enthusiastic. And then they continue to do what they did before. Once you understand the framework, go play the game.
Five Levels of The Natural Step Framework
Think of The Natural Step Framework as a game of chess:
Level 1 is the systems level, the organization in the biosphere. In chess, this level is provided by the rules of the game. Based on our overall understanding of this level, we have asked, “How do we define success in this system? What would success look like?”
That gave us Level 2, which is defined by the “four principles,” or system conditions of a sustainable society.
Level 3 provides a set of strategic guidelines to stepwise approach Level 2.
Level 4 is any concrete action we do.
And Level 5 is the tools level, where we find management tools and indicators to guide and monitor our actions (Level 4) so as to be strategic (Level 3) to arrive at success (Level 2) in the system (Level 1).
We don't know what checkmate would look like beforehand. Just like a chess player moves their pieces toward checkmate, it's the same with sustainable development. Applying the principles of sustainable development in the system is like, step-by-step, approaching those principles of success
-Karl-Henrik Robèrt
