The Next Great Challenge for Capitalism

Half a century ago, the world was threatened with nuclear annihilation. The threat dissipated, ultimately, when capitalism as an economic system triumphed over communism.

Today, we face another threat: a planet, which, in the face of unrelenting population pressure and economic growth, is suffering from a deteriorating environment. Our region has always depended on nature’s bounty, including its fruitful seas and forests, to support a good quality of life. Thus, the Northwest is particularly sensitive to the shifting environment. A warming planet, according to the University of Washington’s Climate Impacts Group, will likely mean more spring flooding, less water in summer to support farmers and new development, and more forest fires. In the long term, we can expect more pests and disease to harm our forests and our health.

For years, we have depended on regulations and our love of nature to protect the environment. But it is increasingly clear that to change behavior on a global scale, we must rely on the same market system of supply and demand that ultimately defeated communism.

If Microsoft helps computers save energy or Paccar develops a more environmentally friendly truck, those companies sell more products. They also reduce the carbon footprint of computers and trucks around the globe.

We know that there is a strong economic return from being environmentally responsible. Buildings built to conserve energy receive a premium on the real estate market; environmentally responsible companies save money and attract better talent. “Executing a strategy for sustainability is critical for business’s survival in today’s rapidly changing world: one in which there are more hurricanes, fewer wetlands, more limits on resources, and less credit to go around,” says Adam Werbach in Strategy for Sustainability: A Business Manifesto, published this summer by Harvard Business Press.

Werbach recommends “Nature’s Rules of Sustainability”: adapt and specialize to the changing environment; plan and execute systemically, not compartmentally; rightsize regularly, rather than downsizing occasionally; foster longevity, not immediate gratification; waste nothing, recycle everything and borrow little.

In the Northwest, we have an opportunity to lead the country in developing this new business model. If we can build the values of sustainability into every product and service we provide, our companies will be best positioned to respond when new regulations are enacted to reduce carbon emissions.

But change is never easy. To be a sustainable business often requires new investments with an eye to long-term returns. The goal of our Green Washington competition is to encourage progress toward sustainability by recognizing the companies, governments and institutions that are leading in this effort.