According to many scholars and theorists, humanity has now entered a new scientific age, the Anthropocene Age, in which human activity is the driving force behind planetary-scale geological and environmental change.  Human agricultural and industrial activity has long exerted an influence on biological systems; in the modern industrial age, human activity now exercises a massive geological influence as well, dramatically changing the planet’s oceans, and atmosphere in ways that we cannot fully understand, predict, or control.

This reality is particularly challenging for leaders in business management.  For generations, managers and business leaders have been trained under the assumption that there are no natural limits to economic growth. Classical economics assumes that an “invisible hand” maximizes the efficient use of resources when free from outside intervention, and that efficiency and profits are the guiding goals of all human activity. However, it has become increasingly clear that there are natural, planetary-level limits to the amount of pollution and resource consumption that human economic activity can yield. According to the theory of the Anthropocene, these limits are non-negotiable and, generally, cannot be overcome through technological innovation. If business leaders are to innovate and succeed in this environment, we need to have a fundamental re-orientation in our thinking, away from trying to test and overcome these limits and instead towards learning to live within them.

Rockstrom et al (2009) argued that in the years since the Industrial Revolution, the earth has exited the ‘Holocene’ epoch in which most human development occurred, and entered a new phase of geological history, the ‘Anthropocene,’ in which ‘human actions have become the main driver of global environmental change’ (p. 472). The Holocene provided a basically stable and nourishing environment for human civilization. Temperatures stayed generally within moderate limits, well-suited to human agricultural development, and as a result, stable civilizations were able to develop. Throughout all of human recorded history, this is the basic geological reality with which human beings are familiar. We know from geological history that there have been much more extreme epochs in which there have been mass extinctions. However, it is very hard for humans to conceptualize these previous geological ages, or to imagine that we may be entering or already in the midst of a similar set of environmental stresses.  However, Rockstrom et al demonstrate that many of the ‘biophysical boundaries’ providing a safe space for human activity have either been severely stressed, due primarily to the overconsumption of fossil fuels, or in some cases breached altogether. They identify several distinct boundaries: biodiversity loss, atmospheric aerosol loading, chemical pollution, changes in land use, global freshwater use, the phosphorous cycle, the nitrogen cycle, climate change, ocean acidification, stratospheric ozone depletion, and climate change (p. 473). Each of these systems have been stressed, and in the case of biodiversity loss, climate change and the nitrogen cycle, the acceptable boundaries have already been exceeded. In other words, we have already transcended what would normally be considered safe limits within the Holocene. For instance, we are already witnessing a loss of biodiversity comparable to some of the great extinctions in the past. The earth’s systems are complex and not always predictable, and it is difficult to say with certainty when or how the earth will respond to certain stresses.

The single largest challenge facing the planet now is the issue of anthropogenic climate change. The impacts of our changing climate are already beginning to be felt across the globe. One major challenge in addressing climate change is that free market mechanisms are poorly equipped to incentivize responsible environmental action.  This is due to the phenomenon known as the “tragedy of the commons.” Certain resources, such as the atmosphere and the oceans, are not privately owned, and market mechanisms do not penalize businesses for polluting or injuring them.  For instance, a corporation’s business activities could release significant greenhouse gases into the atmosphere, imposing a significant environmental cost on the entire planet, but the market does not provide any way to assess that cost monetarily. From the business’s perspective, it is an “externality,” essentially a cost-free transaction that does not impact its bottom line.  Since there are no market-based penalties to degrading common resources, then, the tragedy of the commons is that in a pure market economy publicly held resources will not be protected, and the entire human species and the planet will bear the costs of pollution. Thus, the economic actors driving global climate change pay little or no direct cost, and instead the cost is disproportionately borne by certain vulnerable populations, such as the residents of low-lying island nations.

One possible approach is for governments to impose a cost on business managers.  However, this is often politically difficult. Many managers are resistant to forced change from the outside, but might be willing to make changes voluntarily.  This is especially true if employers realize that their customers care about environmentally sound business practices. A number of managers have shown that addressing climate change can be a winning proposition from a business perspective.

Much of the scholarly literature about management assumes that organizations determine individual managers’ behavior. However, some research suggests that individual managers can make a big difference in transforming the culture of their organizations, even at the middle manager level. One businesswoman and sustainability consultant, Sara Parham, has identified the “positive deviant” as a force for change in the world. A “positive deviant” is a person who takes action for a more sustainable world, even if his or her colleagues and organizations appear indifferent.

The benefit of this approach is that it recognizes that the current environmental problems, especially anthropogenic climate change, are primarily the result of “unknowing” decisions by millions of individual economic actors. Waiting for change to occur on a structural level can appear paralyzing, especially if the pace of change appears to be very slow. On the other hand, taking action only on an individual level can seem ineffective, because the difference any individual person can make is relatively small. This may seem like a paradox, but in truth these two paths are not mutually exclusive.“Positive deviants” can both make direct changes in their own lives and also agitate for change at a national and political level.

Positive deviants demonstrate a number of distinct attributes compared to individuals with more traditional business orientations.  One of these is the increased use of what has been dubbed “emotional intelligence,” characterized by ‘soft skills’ such as ‘self-awareness,’ ‘self-regulation,’ ‘motivation,’ ‘empathy,’ and ‘social skill’ (Parham, 2010, p. 107).  Increasingly, discoveries in psychology, anthropology, and neuroscience are demonstrating the importance of these “soft skills” in leadership settings, and some leadership training is beginning to incorporate them. These soft skills contrast with more traditional selection for dominance, aggression, and competition, which traditionally characterized management education.  Positive deviants are more collectively and socially inclined rather than individualistically inclined. This means that, among other things, they are more likely to consider the impacts of their decisions on other people and on society as a whole, instead of valuing profits above all else. A manager who cares about leaving a more sustainable world for future generations will make different types of decisions from a manager who is only motivated by maximizing by profit.  This suggests that one area for organizational change is to cultivate these attributes in their managers through leadership training. It also means that companies should consider selecting leaders who demonstrate high levels of emotional intelligence, as manifested by ‘soft skills,’ because these are the leaders who will help make their organizations better suited to succeed in an environmentally stressed world.

Research suggests that one important area for organizations to take action on climate change is by improving accounting and disclosure about the climate impacts of their business activity. While corporations are held to a high standard of financial transparency, no similar standards exists for accounting for climate impacts.‘Carbon accounting’ refers to a branch of accounting that discloses information about greenhouse gas emissions to the public and to potential investors. More disclosure about nonfinancial information is associated with “improved stock performance,” and in particular carbon accounting can allow companies to ‘position themselves as attractive options for climate-conscious investors’ (Hahn et al, 2015, p. 83). A “positive deviant” enmeshed in a traditional corporation can make a case for the importance of providing this type of information, especially if it can be shown to have potential benefits for the bottom line. A fully transparent carbon accounting can show that corporations are conscious of the environmental impacts of their activities and are committed to improving them by applying time, energy, and real resources, as opposed to just paying lip service. After all, it is very easy for a corporation to articulate a commitment to fighting climate change in some of its public relations materials. Meaningful disclosure and accounting provides the specific information that allows investors and consumers to make informed decisions.  Another advantage of this is that a great deal of investment capital is controlled by socially and environmentally conscious funds, such as environmentally indexed funds or pension funds.  A few major funds prioritizing climate transparency could send an important signal that will cause companies to start changing the way they do business.

Much traditional economic theory assumes that economic actors are motivated by rational consideration of strictly economic factors such as price and value.  According to this theory, a consumer would choose products or services between two companies based on price and value, without consideration of environmental impact. Similarly, an investor would choose to purchase stock in the company that is likely to produce the greatest returns. However, some evidence suggests that many consumers do not behave in the way that traditional economic theory would suggest. As people, especially of the younger generation, start to grapple with the reality of climate change, they are likely to respond positively to companies that are proactive.  Prioritizing climate disclosure can help companies to reach this growing body of investors and consumers.

This requires a basic reorientation of the way value and capital are understood.  In a capitalist system, even though “the environment is the real bottom line” in the sense that it provides hard material limits to human activity, it is ‘the economy that wags the tail of both of us and the rest of life on Earth’ (Parham, 2010, p. 201). Throughout most of human history, this may have had negative impacts on the environment, but the scale of human activity was such that they did not pose major, system-level threats. In the age of the Anthropocene, we can no longer be confident that this will be the case.

Business organizations need to place sustainability first and foremost. One alternative model can be embracing a broader understanding of capital. One model of capital is the ‘five capitals’ model, which identifies five distinct types of capital: financial, manufactured, social, human, and natural capital (Parham, 2010, p. 203). Traditional models emphasize financial and manufactured capital, often to the detriment of social, human, and natural capital. This can be reflected in their planning documents, mission statements, and in all communications from management. Otherwise, there is the danger that it will simply appear to be ‘greenwashing’—a corporation pretending to be environmentally friendly in order to achieve good public relations.  To really achieve transformative change, leaders need to fundamentally change their attitudes and values, and those changes need to be positively reinforced at the organizational level.

Most businesses today will at least articulate a commitment to sustainable development. However, this is not always actualized in day-to-day policymaking. One of the issues is a “disconnect” in which sustainable development is often seen as an extra concern—something nice to be interested in, and perhaps the province of a specialized department, but not internalized into the core mission of an organization. Dyllick and Muff (2015) argue for a model of sustainable business that moves from ‘Business Sustainability 1.0 (Refined Shareholder Value Management)’, on to ‘Business Sustainability 2.0 (Managing for the Triple Bottom Line’, and finally to ‘Business Sustainability 3.0 (True Sustainability)’ (p. 2).  In True Sustainability, the macro- and micro-levels are united and organizations will achieve practices that are fully sustainable. One of the challenges in the academic understanding of sustainability development is that the literature treating ‘Business Sustainability’ operates largely on the micro-level, and is not really in conversation with the scholarly literature on ‘Sustainable Development’ at the macro-level (Dyllick and Muff, 2015, p. 2). One of the challenges for corporations interested in becoming truly sustainable is to unite these two levels of analysis, not just making their corporations sustainable on an individual level, but also thinking about how their organizations contribute overall to a more sustainable world.

Throughout most of the history of the Anthropocene, the major problem has not been the lack of action, but rather the fact that the wrong types of actions were taken due to a lack of knowledge. During the Industrial Revolution, the industrialists who built modern civilization did not have the scientific knowledge to understand how their activity was impacting the earth’s systems and processes. Today’s managers do not have the excuse of this ignorance. We understand the dimensions of our environmental crisis, but we do not always connect that to day-to-day decisions. Or we might think that our operations and activities are on too small a scale to make a meaningful difference.

As this paper shows, however, there are a number of ways that individual managers can make decisions that will positively impact the environment. More important than the direct impact is the example that people set. Seeing one’s peers and colleagues prioritize sustainability through “positive deviant” behavior, or promoting climate transparency, shows that these are not simply idealistic aspirations. They are concrete steps that can be taken in the here and now.  A handful of “positive deviants” with the initiative to act in new ways can provide examples that will shape how others lead and act. We are often trained to think of organizations and corporations are their own individual entities and personas. In truth, though, they are made up of individual people. If those individual stakeholders and managers transform the way they behave, the culture of their organizations and, eventually, the organizations’ behavior will start to change. Ironically, the Anthropocene has taught us the immense power that human beings possess to transform the earth. Instead of denying that power, today’s leaders need to envision ways to harness that power and use it for sustainable ends.

References

Dyllick, T., and Muff, K. (2015). ‘Clarifying the Meaning of Sustainable Business:

Introducing a Typology from Business as Usual to True Business Sustainability.’

Organization & Environment, 28(1), p1-19.

Hahn, R., Reimsbach, D., and Schiemann, F. (2015). ‘Organizations, Climate Change, and            Transparency: Reviewing the Literature on Carborn Disclosure.’Organization &    Environment, 28(1), p80-102.

Parham, S. (2010).The Positive Deivant: Sustainability Leadership in a Perverse World.

London: Earthscan.

Rockstrom, Johan, et al. (2009). ‘A Safe Operating Space for Humanity,’Nature, 461, p472-

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