Corporation 2020 – Transforming Business For Tomorrow’s World
December 2012: Reviewed by Bittu Sahgal, Editor, Sanctuary Asia: “Failure is simply the opportunity to begin again, this time more intelligently.” – Henry Ford.
Pavan Sukhdev, Founder-CEO of GIST Advisory, who is helping corporates and governments to come to terms with business in an era of climate change, reveals all by starting his introduction with that extremely quotable quote from Henry Ford. Equally significant is his dedication: “To today’s students, tomorrow’s corporate leaders… This is your book, make it happen.”
And then he goes on to list just what we can, in fact must do, in a climate wounded world, going around in circles because we cannot find our way out of our self-imposed maze of fossil-fuel-driven misadventures. Navigating a path from the history of the corporation and what he called the “Great Alignment: 1945:2000” (deregulation, world trade, capital markets and the corporation), this is a virtual guide-book for corporate heads and executives who are grappling with the enigma of how to conduct profitable business. Pavan Sukhdev is a consummate optimist. He, however, walks a narrow tightrope by championing the holy grail of growth, which, by definition, has thus far come with its own set of lethal handmaidens – accumulating carbon, social and environmental degradation and inequity.
You have to read between the lines to understand the real message that Sukhdev is putting out. For instance, he strongly advocates doing away with externalities, which is to say he asks future corporations to calculate the impact their smoke stacks, raw material purchases and waste dumps have on a constituency wider than their shareholders. In characteristic fashion, he launches his communication by way of a quotation for the chapter ‘Through the Looking Glass of Corporate Externalities’, from a most appropriate source – Lewis Caroll’s Alice in Wonderland: “The time has come,” the walrus said, “To talk of many things.”
Externalities is the tough one. This is the meeting point of avarice, arrogance, ignorance and apathy, on the part of politicians, unscrupulous corporates and a virtually comatose public, all of whom combine to thwart the common sense that underscores the sage advice of farsighted bankers and economists, environmentalists and thinkers, such as Sukhdev. Nothing of course exemplifies externalities better than the manner in which the Deepwater Horizon oil spill in the Gulf of Mexico ended up privatising profits for British Petroleum, while externalising environmental costs that were paid by fisherfolk, local communities whose incomes plummeted and a planet that is fast being assassinated. In Sukhdev’s words: “The litmus test of whether such an impact is an externality or not is whether its perpetrator accounted for it when deciding to undertake that activity.”
The noted British economist Nicholas Stern puts it particularly well in his foreword to this path-breaking book: “We have it in our power to create a much better, fairer and more productive world. We can see the destructiveness of our current path and its causes. This book sets out clearly what we must do and particularly the role of markets and corporations. There is no excuse for inaction.”
Pavan Sukhdev has managed to produce a manual for corporate leaders of tomorrow. One that suggests how they might be able to have their cake and eat it too. But, if truth be told, his real contribution is to add credibility to the growing realisation that in the ultimate analysis we might just have to wait for a new crop of young persons to take charge. This is why he writes with conviction: about who would benefit from investment in currently invisible social and natural capital: “One obvious answer is the young. Their education and training are investments in human capital that will provide future returns… the youth throughout the world possess immense potential. Young people will also inherit many of the uncounted costs of today’s corporate activities.
I enjoyed reading this book, which asks for an end to waste and capital misallocation while making a fervent and very compelling case for a transformative green economy of permanence in which Corporation 1920 converts itself into Corporation 2020.
Corporation 2020 – Transforming Business for Tomorrow’s World
Author: Pavan Sukhdev
Publisher: Penguin Books, 2012
Hardcover, 275 pages; Price: Rs. 699
First appeared in: Sanctuary Asia, Vol. XXXII, No. 6, December 2012.