VOLUME 5, NUMBER 8

Reflections
The SoL Journal

on Knowledge, Learning, and Change
FEATURE ARTICLE

Searching for Sustainability
John R. Ehrenfeld

Commentary

Gregory Roscoe

Commentary
Bob Tierney

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Bill Torbert

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4reflections.solonline.org

FEATURE

Searching for Sustainability:
No Quick Fix
By John R. Ehrenfeld

In the face of alarming environmental and social

tions, not quick fixes. The process begins by exam-

imbalances, the growing push for sustainability has

ining our own behaviors and assumptions regarding

given hope to many thoughtful practitioners. But

consumption, personal satisfaction, and technology.

John Ehrenfeld, a leader in the emerging field ofHere, in the first in a series of articles on this crucial

industrial ecology, questions the conventional

topic, Ehrenfeld suggests ways to achieve a deeper

approach to “sustainable development.” Creating

vision of sustainability.

John R. Ehrenfeld— Paul M. Cohen, Senior EditorM

anagement literature abounds with articles making a business case for “sustainability.” Business pundits trumpet the great opportunity for enterprises to find thefew places they profitably can bundle social goods into their markets.1 Socially
responsible investing has become the latest mechanism to use the power of the market, in thiscase the financial markets, to punish the “bad” guys and reward those firms that are doing
the “right” thing. One problem with all of these practices is that they have little or nothing
to do with creating true sustainability. In most cases, they will only temporarily slow down
the process of environmental degradation and global social inequity. In short, the best thatmost businesses today can claim is that they’re doing less harm than they might. But halting
the environmental degradation and growing social inequity between the world’s haves andhave-nots will require fundamental change in the way that businesses and societies work.
How will this come about? I don’t claim to know the answer. But in the pages that follow
I will outline some emerging tools and opportunities that may hasten that change. I’ll also
describe what I believe are the limits of our current approaches to sustainability, and propose
an alternative perspective that addresses underlying causes rather than temporary relief of thesymptoms of our problems. I will conclude by offering a new strategic framework for guiding
our personal, social, and economic decision making.

Current Approaches to Sustainability: Solution or Avoidance?
The publication of the 1987 Brundtland Report2 popularized the concept of sustainable development, which it defined as development that “meets the needs of the present without compromising the ability for future generations to meet their own needs.” Five years after publicationof the report, the largest assemblage of global leaders in modern history met in Rio de Janeiro
to ink an agreement to implement the report’s many concepts and practical approaches. Rio

reflections.solonline.org

John R. Ehrenfeld � Searching for Sustainability 1© 2004, Society for Organizational Learning. All Rights Reserved.

true sustainability, he argues, requires radical solu-

represented a major shift away from a narrow focus on environmental issues and toward
a balance that also included the social and economic. Soon thereafter the idea of the triple
bottom line – economy, environment, and social equity – was promoted as a metric by whichbusinesses could measure their contribution to sustainable development.3 Global businessfollowed with the notion of eco-efficiency – basically, a promise to deliver more value to thecustomer at lower environmental cost.
These and other measures that followed the Brundtland Report have certainly helped
reduce the pace of unsustainability, but the absolute magnitude of the problems on a global
scale has increased. Some economists argue that raising efficiency has exacerbated the situation by generating more wealth – and more consumption – in the economies of affluent
nations. Few companies or institutions have addressed one of the root causes of unsustainability – our addiction to consumption (see Figure 1). Rather, virtually all suggestions by thepowerful institutions of the modern world for solving the sustainability challenge are basedon quick technological fixes, including eco-efficiency4 (see sidebar, “Confronting Technology”). It is a classic case of shifting the burden5 – focusing on the symptoms rather than
attacking a problem at the roots. The underlying condition often reasserts itself in even moreconfounding ways; as a result, our capacity to change is undermined by the illusion that weare addressing our problems, when in fact we are not.

True Sustainability – A New Game
Achieving positive results requires drastic action. We need to shift from our reductionist,problem-solving mode to one that is driven by a vision of a sustainable future we all share.
We need to reflect carefully on our current state of affairs and replace ineffective ways ofthinking and acting.6 The distance between the vision I will present and our current reality isvast; it is important that we do not let the gulf become overwhelming.

2 Searching for Sustainability � John R. Ehrenfeld

Reflections � Volume 5, Number 8

Figure 1: The Addictive Nature of Consumption
Reducing Unsustainability(Eco-efficiency)

Sustainable
Development
Path

B
Side Effects, e.g.
• Loss of placein nature• Growing social
inequity• Continued
environmental
declineR
De

lay

Unsustainability

Sustainability
Path

Most attempts
to reduce unsustainability have
simply shifted theburden and drawn
attention awayfrom the root
causes of the
problem – ouraddiction to
consumption.

B
Creating
Sustainability(ReducingConsumption)

B=Balancing
R=Reinforcing

Confronting Technology: The Great Enabler
As the driving force of modern society, technology has
become the chief means of achieving most of ourbusiness, social, or personal objectives. I believe thattechnology is also one of the great enablers of our
addiction to consumption. It shapes the tools andartifacts we use as well as the cultural mindset that
produces unsustainable behavioral patterns. In a culture
addicted to consumption, technology is our cocaine,and unless we admit this and learn to kick the habit,
we’re unlikely to change our ways.
Beyond its direct environmental impact, technology also
has secondary effects on the environment and ourrelationship to it. To understand the world, we muststand outside of it, according to Descartes and otherEnlightenment thinkers. Inexorably, this characteristic
stance of modern science has eroded our sense ofbeing as a part of nature. Technology brings with it aworldview that sees everything “out there” as having
value only or predominantly through its functional,
instrumental purposes. But this modern way of being isa trap in that, in our striving for satisfaction, it stifles
the qualitative characteristics of what it is to be human.
(Erich Fromm has argued persuasively that we havereflections.solonline.org

moved from a “being” mode of life to a “having”
mode of life.7 In the latter, our identity and self-worth
become conflated with all the material objects weacquire in our attempts to find satisfaction.) Dignity,
authenticity, and autonomy give way to instrumentality and consumption. In short, we have lost our senseof what it is to be human.
Finally, technology has a tertiary effect on our culture.
The late philosopher Hans Jonas has argued thatmodern technology renders ethical action and responsibility problematic.8 The moral consequences ofhuman action, in the times when notions about
responsibility were shaped, always showed up proximately to the action. Responsibility could be definedin practical terms as avoiding harm. But as neverbefore, technological activities – such as pesticideuse, industrial emissions, or long-range weapons –show up in spatially or temporally remote, unanticipated, and profound ways. Until individuals andbusinesses recognize and act to avoid the deeper
impacts of their actions – for instance, the climatological effects of their automobile and industrial
emissions – deep change will be impossible.

John R. Ehrenfeld � Searching for Sustainability 3

Almost completely missing from the problem-oriented activities of today is a clear notionof what sustainability is. “Sustainable development” is simply an extrapolation of the past,
except that we intend to be more efficient and fair in going about our business. It is only
about process with no visionary end in sight.
I define sustainability as the possibility that human and other forms of life will flourish on
the Earth forever.9 It’s important to examine two key words in that definition. Possibility is
about bringing forth something we desire so as to create a new reality. Possibility enables
humans to visualize and strive for a future that is not available to them in the present.
Ortega y Gasset captured the essence of possibility when he said, “Life is aseries of collisions with the future; it is not the sum of what we have been,
but what we yearn to be.”Flourish brings life to this definition of sustainability and is the threshold
through which people can create their own image of what their world wouldbe. Every culture and every age has conjured up images and sounds of flourishing. In our own time, the visage of smiling, happy infants may be an
iconic example from nearly any culture on the globe. But all too few of us
live in circumstances where those precious moments can be evoked again andagain. Doesn’t the above definition suggest something quite different than does the notion ofsustainable development? In the Brundtland version, sustainability appears in the form of an
adjective. The noun is still development. In this new form, sustainability becomes the noun,
the subject, the focus – quite a difference, especially because we have become accustomed tothinking about development as continuous growth. Sustainability and unsustainability are
not just two sides of the same coin. They are categorically different. Unsustainability is measurable; it can be managed and incrementally reduced. But sustainability – the possibility offlourishing in the future – is aspirational. As Amartya Sen, the economics Nobelist said, “Itis difficult to desire what one cannot imagine as a possibility.”
In short, creating sustainability is not the same as reducing unsustainability.

“It is difficult todesire what one
cannot imagine
as a possibility.”

Sustainability by Design
Nevertheless, it makes sense to remove the causes of unsustainability. That is the underlying rationale for technological innovation, social revolution, psychotherapy, environmental
legislation, and other change efforts. But these solutions usually build on past experience, inways that maximize our preferences or ameliorate current problems. There is little possibility
in this way of being; like a well-programmed computer, we always come up with the sameanswer given the same set of inputs.
Fortunately, there is another road to sustainability. But it comes in a very different modelof individual and social action. This way conceives a world that brings flourishing into oureveryday activities instead of one that sees life as a series of problems to overcome. Design
creates something that did not exist before. It is what great artists, writers, musicians, teachers, and political or social leaders do: they bring their future visions into being. They makemetaphorical jumps that allow them to transcend the limits of commonplace rationality.
Flourishing will come only if we pay close attention to three critical domains that havebeen dimmed in our consciousness by the forces of modernity:• our sense of our place in the natural world – the natural domain;• our sense of ourselves as human beings – the human domain; and• our sense of doing the right thing – the ethical domain.

4 Searching for Sustainability � John R. Ehrenfeld

Reflections � Volume 5, Number 8

These three aspects of sustainability allow us to reframe the triple bottom line outlined by
the Brundtland Report (see sidebar, “Reframing the Triple Bottom Line”). They can form theframework for the redesign of tools, infrastructure, and social institutions, and enable us totransform living from its unsustainable path to one that brings the vision of flourishing“down to Earth.” All of which can increase the likelihood that our designs will work the way
we intend them to and also help us identify the causes of our problems.

Building the Real Business Case for Sustainability
The change required means starting at the deep-rooted structure that drives business culture.
It is encouraging that many leading practitioners in the organizational learning community,

Reframing the Triple Bottom LineTo achieve true sustainability, business should shift from ameliorative strategies based on the Brundtland
strategic triangle to new strategies based on the radical sustainability triad.

The Brundtland (Sustainable
Development) Triangle

The Radical Sustainability Triad

EquityEthicalSustainable
Development

Sustainability

Environment

Economics

NaturalHuman

I replace the term environment with natural because it connotes the holistic-systems sense of the world inwhich we live. Likewise, it is important to look beyond economics if we are to turn attention to the human.
Economics is important in understanding the metabolism of human societies, just as ecology is important in
the case of natural living systems. But as a normative model, economics does not provide a roadmap forsustainability.
Finally, I believe the equity apex must give way to the more deeply rooted ethical. This encompasses collective
concerns like equity or justice, as well as classic moral notions like responsibility. Neoclassical theory claims
that free markets are the most efficient means of maximizing satisfaction, given an initial distribution of wealth,but says nothing about the morality of that initial distribution. It always takes some extra-market intervention
to shift the distribution. Government policies in liberal, democratic states generally have been that instrument.
Business as an institution has focused on creating the rules for maximizing profits rather than taking a standon distributional or intergenerational equity.
Clearly business cannot redress equity failures all by itself. This institution, like most others in free–market–
dominated economies, focuses first on efficiency. But the current emerging notion of corporate social responsibility is an encouraging sign that business may be starting to work on its ethical processes.

reflections.solonline.org

John R. Ehrenfeld � Searching for Sustainability 5within and outside of firms, are focusing on sustainability as an objective, but they are largely
limiting their efforts to what can be done within the boundary of the firm. They overlook thefact that every worker arrives at the office or plant from a home within a community within alarger society, and imports the elements of the larger cultural structure. In the case of sustainability, this means that change within the firm must be built on change in the larger society
outside of nominal company boundaries. The work of change agents inside and outside offirms is going much too slowly to overtake the magnitude of unsustainability. The growing
magnitude is due, I believe, to a failure to recognize that sustainability rests on a system muchlarger than the firm.
If business as an institution – the most powerful one on the globe – truly cares about sustainability, then it must begin to move outside of its boundaries, and interact with society atlarge, where change at the cultural level needs to come forth.
The most important change must come at the level of deep-seated societal structure andmindset. For example, my colleague Tom Gladwin, University of Michigan Professor of
Sustainable Enterprise, has classified some 20 unsustainable characteristics that underliesocial and individual activities in modern industrial societies.10 (See Table 1.)
Table 1: Elements of an Unsustainable Paradigm
Cognitive

Worldview

Contemporary Norms

Psychological

Reductionist

Atomistic

Efficiency

Repression

Proximity

Mechanistic

Quantitative

DenialSimplicity

Anthropocentric

Secularism

Projection

Certainty

Rationalistic

Narcissism

Rationalization

Discrepancy

Individualistic

Techno-optimism

Insulation

This table is constructed from information in the figure “Sources of Unsustainable Thinking” (Gladwin, Newburry, et al. in Bazerman, Messick,and Wade-Benzoni 1997, 239).

Some of the items on Gladwin’s list, like “proximity” (our tendency to perceive only what
is close at hand), or “discrepancy” (our need to be jarred by our senses), refer to our cognitive
structure and the way we perceive the world. Others, like “individualistic,” reflect the cultural worldview that started with the Enlightenment. Sociologists refer to these kinds of characteristics as features of the paradigm by which we live our lives. The third set of characteristics
reflects contemporary norms. For instance, our compulsion to quantify the world around us
is tied to our need to be in control. And last, Gladwin points to a set of psychological ways
we defend ourselves from anxiety. In the context of unsustainability, the anxiety springs froma sense that as individuals we lack the competence to produce happiness, or that the satisfaction we seek is always just beyond our means to produce it. Denial is the single element mostillustrative of our current dilemma; others include “repression” and “rationalization.”Contrast Gladwin’s portrayal of the unsustainable mind of today with that in his alternative, sustainable set. (See Table 2.) I believe the two sets of cultural traits provide a conceptual roadmap for where we are, and where we must go if we are to achieve our espoused goalof sustainability.
To achieve true sustainability, I believe we must follow two parallel paths. First, we mustchange the paradigms that guide our business and environmental thinking. This process
requires replacing the elements of an unsustainable social paradigm with a new set of cultureshaping beliefs and norms. Second, we must directly question the role of technology and6 Searching for Sustainability � John R. Ehrenfeld

Reflections � Volume 5, Number 8develop ways to produce new means for satisfying the needs of both human and nature. Our
artifacts need to be designed to support conscious choice and reflective competence rather
than to induce blind consumption. They should produce long-lasting human satisfaction sothat addiction to consumption will abate. We will be able to flourish simply by living life as
we encounter it.

A Tool for Change: Industrial Ecology
One tool for changing our relationship to technology is the emergent field of industrial ecology. In its simplest form, industrial ecology suggests that societies built around principles
derived from ecosystem properties and dynamics might be sustainable in the same sense that
ecosystems are. For instance, the closed-loop webs in an ecosystem take little out of their surroundings and put back little as wastes. They naturally recycle almost all materials used inTable 2: Elements of an Sustainable Paradigm
Cognitive

Worldview

Contemporary Norms

PsychologicalInterconnected

Holistic

Equity/Justice

Remembrance

Distance

Organic

Qualitative

AvowalComplexity

Eco-centric

Spiritualism

Internalization

Uncertainty

Intuitive

Altruism

AccuratenessGraduality

CommunitarianTechno-skepticism

Sensitization

This table is constructed from information in the figure “Moving Towards Sustainable Thinking” (Gladwin, Newburry, et al. in Bazerman, Messick,and Wade-Benzoni 1997, 262).

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John R. Ehrenfeld � Searching for Sustainability 7their metabolism. But though materials recirculate in ecosystems, they generally make only
one pass through human systems. Thus, one application of industrial ecology is the development of lifecycle analysis tools and the design and management of products and services froma comprehensive lifecycle perspective – from extraction of raw materials to disposal of usedproducts. This approach yields a better understanding of the relationships between socioeconomic features of modern societies and their material and energy metabolism. For example,
many of the products we use, from car parts to computer printers, would be designed to bereused through recycling and remanufacturing.
Beyond the analytic tools, industrial ecology provides a new set of beliefs and norms, also
based on ecosystems, at least in a metaphorical sense. Ecosystems are seen as complex, selforganizing, open systems out of which integrity, flourishing, resilience, or adaptability emerge as properties of thesystems as wholes. In both human and natural systems,
sustainability is an outcome of relationships among theparts. However, the notions of interdependence and interconnectedness inherent in natural systems are very different from our current cultural norms. We almost worship
independence and autonomy as social norms. The idea ofcompetitive markets implies a predator-prey relationship among producing firms. Ecosystems
have predator-prey aspects to be sure, but they also display many forms of mutualism andsymbiosis.

In both human and natural
systems, sustainability is an
outcome of relationshipamong the parts.

Replacing the Old Paradigm
Thinking with a different set of beliefs and norms more aligned with sustainability should
bring about new practices over time. A comparison of Gladwin’s two tables finds that theconcepts of industrial ecology counter many of the unsustainable elements: interconnectedness in opposition to reductionist, complexity in opposition to simplicity, and so on.
Executives often say that they cannot unilaterally embrace sustainable practices, even as
they claim that they would like to. Why then not change the rules of the game they play,taking a lesson in cooperation from industrial ecology? Together, powerful forces in industry
can change the nature of competitive strategy; in today’s political economy, firms create theirown groundrules through their influence on governments. Why not change the way profit iscalculated at the level of the firm, and how gross domestic product (GDP) is measured at thesocietal level? For example, an environmental group, Redefining Progress,11 has developed
an alternative to the conventional GDP called the Genuine Progress Indicator (GPI). Rather
than add the costs of crime, pollution, family breakdown, and other societal “bads,” thismetric subtracts those costs from the aggregate index. According to the GPI, aggregate wellbeing in the U.S. leveled off in the 1970s. Similarly, the social costs of polluting or depletinga natural resource could be treated as a company’s internal costs of doing business, rather
than allowing firms to externalize these real costs to society.
Businesspeople complain about unpredictability in the regulatory environment, claiming,“just tell us what the rules are and we will learn to play and win in a new game.” But whenpush comes to shove, this claim rings hollow as judged by persistent obstructionism to newforms of environmental and financial regulations designed to promote sustainability. If theworld’s leading firms would create a coalition to change the formulas used by the financial
markets to determine success and to influence government and independent agencies to

8 Searching for Sustainability � John R. Ehrenfeld

Reflections � Volume 5, Number 8change the rules, a new sustainability win-win game is possible. The World Business Council
for Sustainable Development (WBCSD)12 is a coalition of approximately 170 leading international firms dedicated to promoting sustainable development. Imagine the impact if the
WBSCD called for such a move – pushing for
Table 3: Reframing the Way We Design Our Artifacts
true sustainability rather than settling foreco-efficiency.
Current PracticeSustainable Design
Industrial ecology offers alternatives to
Industrial design
Design of functional objects
many (though by no means all) of the unsusProduct design
Creation of material culture
tainable elements in the table. In addition, aSpecialization
Improvisation
shift from the so-called “sound science” stance
Conventional
Uncertain, uncomfortable
to a more precautionary process would reduce
Professional
Amateur, dilettante
the potential for unintended but unsustainable
Specific
Holistic, integrative
outcomes. Today, the approach is the opposite
Instrumental
Intrinsic
of precautionary: businesses claim they should
Problem-solving
Experimenting
be able to put anything into the market that
Solutions
Possibilities
cannot be proven to be harmful, even given
A
prioridesignContingent
designthe uncertainties of the methods available forThis table was originally titled “Reframing Our Perspective for Sustainable Design” (Walker 2002,9).
such proof. Techno-skepticism – examining
innovation with a critical eye – is another form of precaution. This orientation should not be
confused with wholesale opposition to technological change. Technology is here to stay, but
we need to create procedures to examine its impacts before releasing new technology into themarketplaces of the world.
Dealing with the unsustainable psychological elements of our addiction is very
challenging. There are no quick fixes. But it is possible to design the technology of daily living
to produce authentic satisfaction – the sort not driven by manufactured wants or needs – andreflections.solonline.org

John R. Ehrenfeld � Searching for Sustainability 9

consequently reduce the level of existential anxiety. New design philosophies and techniques
have great potential to reverse the current trend and begin to produce authenticity and othercharacteristics of flourishing – beauty and durability, for example. In a recent article,
Professor Stuart Walker at the University of Calgary presented an alternate way of designing
products for sustainability. Similar to Gladwin’s plea for a new set of cultural beliefs, Walker’s
thesis argues for a new system for sustainable design (see Table 3).13
Apart from products that have been designed for remanufacturing and recycling (likeXerox’s line of digital office machines), examples of such a new way of designing are virtuallyabsent from the market. That is not to say that such tools do not come into existence. Ivan
Illich calls artifacts (and institutions) that produce authentic human satisfaction “convivial
tools.” An example he uses is the conventional telephone system, whichallows “the user to express his meaning in action.”
During a yearlong residency in the Sustainable [Industrial] DesignGroup at the Technical University of Delft, I was introduced to research(being done in the Netherlands) aimed at designing artifacts that could
guide ethical behavior. The core of this work is that humans and artifacts
interact in ways unforeseen in typical design procedures. Taking some liberties with theirwork, I would say that this scheme considers the use of an artifact as a type of conversation
between the actor and the object, each with a script telling the other what is expected.
A researcher at the University of Twente, Jaap Jelsma, points to an example found in
the Netherlands – a water-conserving toilet using a two-button actuating mechanism.14 The
smaller of the buttons is used after urination and the larger button otherwise. The prescriptive
influence comes from the requirement that the user must make a decision every time. If thedesign is effective, the user will follow the script built into the artifact by the designer; in thiscase the message is to conserve water. I believe that such new approaches to product design
can change the relationship between consumers and product-and-service providers, and, if
that process is carefully constructed and open to examination, can strengthen all three pointsof the new triad. If design is regarded as a long conversation (between the designer, theconsumer, and nature) out of which designs evolve, I believe that the objects that emerge will
be much more satisfying and induce ethical, reflective interactions between the user and theobject. Industrial ecology can supply the voice of nature in the conversation, speaking aboutclosed cycles, avoidance of metabolic poisons, and other features of sustainable ecosystems.

Don’t settle
for simply reducing
unsustainability.

Choosing Sustainability: A New Strategic Framework
The opportunities for business to create sustainability are indeed immense, but so is thepossibility of continuing in the same, business-as-usual pattern, even as we apparently makeheadway with eco-efficiency, lifecycle management, and other strategies arising under the
rubric of sustainable development. Each enterprise has a choice about which way to go.
This article has presented a strong case for taking up the cause of radical sustainability. It isradical, but not extreme. It brings us back to our roots – the meaning of the very origin of“radical” – and is the natural way to go. If we take that position, we can perhaps begin to
see that modernity, with its unsustainable structure, is the extreme paradigm. It has brought
us wonders, but wonders that do not treat the heart and soul of our species.
By now many of you must be wondering, “where are the examples of success” that always
show up in articles like this. I purposefully have avoided doing this. The basis for the sustainability strategy is that radical new institutions and forms of technology must rise from a new

10 Searching for Sustainability � John R. Ehrenfeld

Reflections � Volume 5, Number 8paradigm. And, although the business
literature is full of worthy efforts toimprove corporate practices, virtually all
have arisen in the context of reducing
unsustainability. Efforts to build on theseexamples continue to be critically important. But the radical, perhaps simple,
changes needed are yet to come forth andwill not until sustainability is established
as a vision.
That vision can become a reality asa result of many steps that we can take
together. Six steps, in particular, suggest
the outlines for a truly sustainable future:
1. Acknowledge that you and your firm
are likely addicted to unsustainable
practices, and follow that by accepting the radical definition of sustainability. Don’t settle for simply reducing unsustainability.
2. Change your thinking from seeing
your enterprise as an independent,
autonomous entity to one embedded in a complex living network. We
are all interconnected; the idea of an
isolated “sustainable firm” found sooften in the business strategy world
is an oxymoron. Collaboration withyour peers and other producers canchange the rules of the game you play to a truly win-win context. And changing thedesign process to involve stakeholders of all sorts expands collaboration to a much wider
set of players whose knowledge of the world can greatly enhance the conventional rationality of a firm.
3. Implement the sustainability triad, using the natural, human, and ethical dimensions as
the framework for an organizational and technological (products and services) change
process. Replace the Brundtland strategy triangle and the triple bottom line.
4. Follow the principles of industrial ecology or other programs built on these principles,such as Natural Capitalism, The Natural Step, Cradle to Cradle, et al.15 This will lead
you toward addressing an important subset of the paradigmatic elements in the tables,
all of which are grounded in ecological properties that include, for example, holism andinterconnectedness.
5. Start thinking of design as more than a purely technical exercise to find the most efficient way to satisfy two sets of fundamentally contradictory objectives – those of the firm
and the financial world, and those of the consumers and other stakeholders. Revise thereflections.solonline.org

John R. Ehrenfeld � Searching for Sustainability 11

concept of design from a technical, analytic process to a dialogic conversation involving
all the players. This can refer to design of artifacts and to the design of human structures
as well. Get used to the added time and resources that will be needed for this change.
6. Finally, commit to the actions that emerge from the design step and move on.
Industrial societies, and our planet, are at a turning point. Few people believe that what
has served as “best practice” for the past 200 years will serve for another 200. The deeply
rooted notions of progress that have been with us since Bacon and Descartes have outlived
their effectiveness and now are a central part of our addiction to modernity. It is up to us,
individually and collectively, to take the first steps to sobriety.

Endnotes
1 Forest Reinhardt, “Market Failure and the Environmental Policies of Firms,” Journal of Industrial
Ecology 3(1) (1999): 9–21.
2 Named for Norwegian Prime Minister Gro Harlem Brundtland, who chaired the U.N.-appointed World
Commission on Environment and Development, the report was published commercially as Our
Common Future, G. Brundtland, ed. (Oxford, UK: Oxford University Press, 1987).
3 John Elkington, Cannibals with Forks: The Triple Bottom Line of 21st Century Business (Gabriola
Island, BC, Canada: New Society Publishers, Limited, 1998).
4 This assertion is not to dismiss groups that seek rapprochement between science and spirituality asa precondition to sustainability. The key is the word “powerful.” Those who stress the criticality of thespiritual are still much in the shadows of mainstream Western society.
5 Peter Senge, Charlotte Roberts, et al. The Fifth Discipline Handbook (New York: Doubleday, 1994),
135ff.
6 This model of changing behavior to avoid the traps of the past is fundamental to many schools oforganizational and personal transformation and change, for example, see Peter Senge, The Fifth
Discipline (New York: Doubleday, 1990).
7 Erich Fromm, To Have or To Be? (New York: Harper & Row, 1976).
8 Hans Jonas. The Imperative of Responsibility: In Search of an Ethics for the Technological Age(Chicago: University of Chicago Press, 1984).
9 See also SoL’s Sustainability Consortium at www.solonline.org/public_pages/comm_Sustainability
ConsortiumCore/.
10 Thomas Gladwin, William E. Newburry, et al., “Why is the Northern Elite Mind Biased Against
Community, the Environment, and a Sustainable Future,” in Environment, Ethics, and Behavior: The
Psychology of Environmental Valuation and Degradation, M. H. Bazerman, D. M. Messick, and K. A.
Wade-Benzoni (San Francisco: The New Lexington Press, 1997): 234–274.
11 See http://www.rprogress.org.
12 See http://www.wbcsd.ch.
13 Stuart Walker, “A Journey in Design: An Exploration of Perspectives for Sustainability” Journal of
Sustainable Product Design (2002): 3–10.

12 Searching for Sustainability � John R. Ehrenfeld

Reflections � Volume 5, Number 8

14 Jaap Jelsma, “Design of Behaviour Steering Technology” Proceedings of the 2000 International
Summer Academy on Technology Studies, Graz, Austria, July 9–14, 2000. Available at http://
www.ifz.tu-graz.ac.at/sumacad/sumacad_proc00.html.

15 See: www.natcap.org; www.naturalstep.org; and www.mbdc.com/c2c_home.htm.

ABOUT THE AUTHORJohn R. Ehrenfeld is executive director of the International Society for Industrial Ecology
and the former director of MIT’s Program on Technology, Business, and Environment. He teaches
worldwide, and contributes to SoL’s Sustainability Consortium. In October 1999, the World
Resources Institute honored him with a lifetime achievement award.
john.ehrenfeld@alum.mit.edu

reflections.solonline.org

John R. Ehrenfeld � Searching for Sustainability 13

FCCROOOM
H TE
M
MMM
M EET NN
T AA RR YYA N A G I N G D I R E C T O R

Commentary
By Gregory Roscoe

Gregory Roscoe

The title of John Ehrenfeld’s paper says it all –based approaches to environmental issues,“Searching for Sustainability: No Quick Fix”! The

and systems thinking is working its way into

take-away for me is that as a society we havestrategic planning. For example, the EPA New

continued to focus on emerging and glaring

England office has a long history of working

symptoms of non-sustainability. To make a soci-with the metal finishing sector. Taking a multi-

etal paradigm shift toward the aspirations ofmedia and sector-wide view of compliance wassustainability “will require a cultural transfor-a huge strategic step forward. After investing

mation” – no quick fix.

significant energy into its compliance efforts,

One revealing point Ehrenfeld made was thecontrast between sustainable development and(radical) sustainability. Sustainable development
focuses on economic growth with reduction ofnegative environmental consequences. He characterizes it as a more thoughtful “extrapolation of

EPA also incorporated broader, collaborative
strategies – most recently encouraging corporate entities to “green their supply chain.” Aspart of this effort, corporate sponsors requirecommitments from their vendors to adopt
EMS and to produce “greener” products.

the past.” To be sure, the reduction of negative

Nevertheless, Ehrenfeld is right – minimizing

environmental consequences is not without merit.

non-sustainability is not the flip side of sustain-

Having worked for the Environmental Protection

ability. As he said: “sustainability – the possi-

Agency (EPA), I have a first-hand appreciation

bility of flourishing in the future – is aspirational.”

for how problem-mitigation-based strategies can

It will require a cultural shift. This leads to one

make monumental strides in advancing environ-of the most fundamental questions facing ourmental quality. The U.S. has an outstanding trackfederal and state environmental agencies: Will

record of identifying environmental problems andthey be defined by the statutory and regulatory

addressing them. Thirty years ago, our rivers

structures that are their current framework, orwere catching fire; that doesn’t happen today!

will they embrace the need to catalyze andAs agency policy became more sophisticated,
we even allowed ourselves to think about how

facilitate the cultural change necessary
for “radical” sustainability?

to continue to develop economically while mini-

The forces shaping the missions of our statemizing the impacts of that growth (sustainable

and federal environmental agencies are com-development). For example, the EPA and its state

plex, historical, and structural. Unfortunately,

partners have invested in the development of

there will be an ongoing need for environmen-

Environmental Management Systems (EMS), intal regulation and enforcement. Though now

the promotion of life-cycle analysis in productan accepted part of the environmental agenda,

development, and in environmental leadershipthe emergence of green performance initiatives

programs as adjuncts to their regulatory agendas.

like Performance Track and the broader, sector-

Regulators have begun taking broader, sector-

based strategies such as EPA’s College and

14 Commentary � Gregory Roscoe

Reflections � Volume 5, Number 8University Sector, Hospitals/Health Care andThese strategic conversations are happening in

Metal Finishers was a departure from more

our regulatory agencies, but the expectations andtraditional interpretations of mission. Therepath(s) for sustainability certainly are not clear.

were no statutory mandates to undertake these

What is clear is that there are opportunities for

initiatives and early on there was internal debate

leadership and involvement of these agencies.

about why these efforts were important andHowever, we cannot lay sole responsibility on their

who was asking for them.

doorsteps if a true cultural change is to happen.

As we ponder a more sophisticated and radical
notion of sustainability, concrete strategies well
suited to regulatory personnel may well beelusive. The finite political lifespans of federal
and state leadership present special challenges
for long-term agendas like sustainability. Also,that agenda has not been helped by the indiscriminate use and “eye of the beholder” definition of the term. “Sustainability” has come tohave little specific meaning and thus is currently
limited as a beacon for policy makers. Given

EPA and state environmental agencies were originally organized to develop and execute crises
responses to environmental problems. They have
evolved to embrace strategies that promote sustainable development. The remaining challengeof radical sustainability is largely societal andcultural – an agenda larger than that of any
government agency. The shift to radical sustainability will require a culture change by businessleaders, communities, political leaders, andourselves. There will be no quick fix.

their finite resources, how will these agencies
evaluate “bang for the buck” when sustainability efforts (however we define them) are compared with more traditional environmental
agendas such as permitting or emissions
trading?

reflections.solonline.org

ABOUT THE AUTHOR

Gregory Roscoe is an environmental consultant
who helps organizations resolve regulatory andpermitting matters. He served for 17 years at
the U.S. EPA’s Boston office in a variety of enforcement, assistance, and pollution-prevention
programs.
groscoe@maine.rr.com

Gregory Roscoe

Commentary 15

COMMENTARY

Commentary
By Bob Tierney

Bob Tierney

If, as a society, consumption is our problem andvery difficult conversation to have with the CFO

technology is our cocaine, then with John Ehren-of any company. It happens only when people

feld’s analogy taken one step further, I work forin an organization care enough about the future

one of society’s major drug pushers! Pratt & Whitney

to take risks and find opportunities to apply

and its parent company, United Technologies –their intentions. For instance, Pratt & Whitney’s

providers of jet engines, air conditioning systems,

internal effort to develop more eco-friendly

and other industrial products and services – accountsolutions took root as a marketable service only

for a full 1% of the world’s CO2 emissions. The

after the 9/11 attacks crippled our commercial

current fuel efficiency of air travel is fairly good:aviation business.

at 500 miles per hour, an airline passenger can
travel 100 miles on a single gallon of jet fuel, forexample. Not bad – but the global demand for air
travel is increasing so that, even with improved
efficiency, the total amount of CO2 from aviation
is predicted to rise for many years to come. It
may well be that “reducing unsustainability” isnot enough. But when you’re heading in thewrong direction you have to slow down before
you can turn around.
It’s important to note that Ehrenfeld is not sayingthat technology is bad. From my 25-year tenure
in a large multinational firm, and as a student ofsustainability, I see that technology can be a catalyst for unsustainable practices. But it can also
be the enabler for achieving sustainability – itdepends on how successful we are at integrating
natural and human limits into the design equation.

The fact is, business practitioners must makethe financial as well as the environmental andsocial case for change. For example, most of
the products we make either consume fossil
fuel directly or cause it to be consumed. Being
eco-efficient with energy inputs reduces customer
operating costs, and therefore, where development costs can be repaid with sufficientincreased sales, investments will be madeto improve this measure.
The internal conversation we are beginningto have now, with a focus on sustainability,
is about the development of alternative fuels
and the use of emission offsets. We also haveanalyzed the potential external costs with oneof our products that has a design-to-retire
lifetime of 50+ years. We have examined, forexample, the impact that a carbon tax or more

This is easier said than done. Our company has

stringent regulation might have on our future

been pursuing eco-efficiency since the early 1990s

business. We have not made the businesswith much success. We have been rewarded forcase for the kinds of product design methods

our successes with lower cost of goods sold andthat Ehrenfeld describes, but we are beginning

positive acknowledgments from government. Moving

the conversations that will lead to this.

away from what has worked in the past and starting to recognize business and environmental costs
that traditionally have been borne by society is a

16
16 Commentary � Bob Tierney

One method we have used to increaseawareness is to focus on “unsustainable”

Reflections � Volume 5, Number 8

COMMENTARY

practices. With the burning of fossil fuels, we canconversations in the category of building capa-

speak about the limits of natural resources andcity, and John Ehrenfeld’s article provides a good

the real impact of those limits on our businesses.

framework for them. To be sure, some businessFor example, our jet engines are designed to lastpractitioners will reject his argument out of hand.

50 years – but it is not at all certain that the fuelBut in raising difficult questions and offering a

to run them will still be available in 2054. People

framework for discussion, he is doing us a greatin our company, and in many others, are now

service.

questioning their assumptions and beginning todesign products for a very different world we see
emerging in the future.

ABOUT THE AUTHOR

Has there been a great “Aha!” across the compa-

Bob Tierney is manager of Green Business

ny? No. But there have been more conversations

Solutions for Pratt & Whitney, and a founding

this year than last about what is the problem andmember of the SoL Sustainability Consortium.

what are the ranges of solutions. I put thesetierneyj@pweh.com

reflections.solonline.org

Bob Tierney

Commentary 17

VOLUME 5, NUMBER 8

Reflections
The SoL Journal

on Knowledge, Learning, and Change

Emerging Knowledge Forum

Adventures on the
Way to Investing for
a Triple Bottom Line
By Joan Bavaria

Socially Responsible
Investing and Trillium
Asset Management
By Bill Torbert

Published by The Society for Organizational Learning
4reflections.solonline.org
ISSN 1524-1734

EMERGING KNOWLEDGE FORUM

Adventures on the Way to
Investing for a Triple Bottom Line
By Joan BavariaF© 2004, Society for Organizational Learning. All Rights Reserved.

or all its current cachet, socially responsible investing has been part of the businesslandscape for many years. As early as the nineteenth century, churches or individuals of conscience decided that it was neither responsible nor consistent to invest theirassets in the vehicle that promised the highest financial return without considering the negative impacts that the investment could have on the way to delivering that profit. “Screening”
out investments considered unethical was in part a form of protest and in part the way things
worked for Quakers, Catholics, and many others when I began managing accounts for Old
Colony Trust Company in Boston, Massachusetts in 1969. In the past 20 years, though,socially responsible investing has spread exponentially and become very sophisticated.
There are many stories that could be told about how socially responsible investing (SRI)
has grown and changed. This is my story, and the story of a company dedicated to making a
difference.
In the late 1970s, responding to client questions about what their money did on the way
to investment returns, Elliott Sclar (who later served as board chair for 20 years and continues on the board to this day) and other friends worked with me to help build a company thatwould invest money and service clients, but most important, would make a positive difference
to society. We believed that capitalism was the best economic model yet conceived but that it
lacked the “rudder” to steer it away from negative impacts such as a ravaged environment orabused sectors of society. We believed that investors have the power to provide at least partof the rudder. Wallowing in megalomania, we set about the difficult task of incorporating an
S.E.C.-regulated investment advisor in Massachusetts, inventing a mission statement, andsetting our first strategic goals. We opened in 1983 as Franklin Research & Development.
Our first mission statement has been rewritten only minimally in spite of several serious tests
by our board and employees.

Trillium Mission (UPDATED 2000)• Meet the financial, social and ecological goals of individuals and institutions• Find all possible means of social progress in capital markets and educate in their use• Maintain a work environment in which ownership, responsibilities and rewards are broadly shared• Support those working to build a just and better world.

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Three strategic goals flowing from this mission framed our work for two decades and arestill framing much of what we do. Those goals were:
1. Build a company that walks the talk of social responsibility.
2. Create an information system and/or publication to encourage other investment professionals to consider social goals when making decisions.
3. Build networks to bring together diverse entities that are working toward the same
goals.
Although quantification of success within our mission and strategy is elusive at times(what is a “just” and “better” world?), these goals have proved to be enduring and worthy.
In 1983 we began publishing Insight, a newsletter that analyzes investment opportunities
through both a financial and a social lens. For almost 20 years we have published and mailed
this newsletter to subscribers for the cost of printing. In the process, we have empowered ourcompetition by demonstrating that socially responsible investing can be profitable. This waspart of the strategy – to build an industry. Although we certainly did not build the industry
all by ourselves, one of our challenges in the company now is to differentiate ourselves fromthe many other SRI managers. Thus, we work well beyond simply screening out offensive
investments; we also engage as shareholders with companies on behalf of clients as part of asmall handful of managers with similar commitments.

Getting Started
In 1979, we sent a questionnaire to about 50 researchers, friends, investors, and investment
professionals who we knew were interested in socially responsible investing, and about 30
were returned. At the time, two issues predominated – South Africa divestiture and the coziness of the “big 10” accounting firms with the companies they audited. Now auditing inNorth America is dominated by just four big firms! And sadly, because of changes in the law,
the South Africa divestiture movement that was so powerful in bringing the issue into the
public realm could not happen today
We met in 1981 with friends, advisors, and constituents to explore ways to create a network of people and organizations concerned with the process of making money (as opposed
to just the end result). Although some attendees from community loan funds or researchorganizations did not initially understand what they could have in common with Wall Street
types, it soon became apparent that we shared similar goals and another meeting wasplanned. We hosted those meetings until the group formalized into a nonprofit called theSocial Investment Forum. That organization is still active today, providing networking for all
professionals in and around socially responsible investing. An estimated $2.16 trillion is now
invested in professionally managed portfolios using one or more of the three core SRI strategies – screening, shareholder advocacy, and community investing.
In June of 1988, the board of the Social Investment Forum reached past the trade organization model to network with likeminded individuals and institutions. Pollution, dirty
beaches, the lingering aftermath of the 1984 Bhopal tragedy, and the Chernobyl nuclear accident had caused the environment to be one of the top concerns of socially responsible investors. Given the dearth of good information or clear strategies for investors, we decided toreach out directly to those working for the global environment. Slowly we found those who
understood the connection of the environment with investors and put together the networkthat became CERES (Coalition for Environmentally Responsible Economies) in 1989.

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The CERES principles were seen as an environmental management mission statement forcompanies or any business entity. The last two principles introduced ideas that were thenrevolutionary: accountability through transparency and governance consistent with environmental goals. Only amended once, the principles have been endorsed by many large and small
companies and copied by countless others around the globe.

The CERES Principles
Protection of the BiosphereWe will reduce and make continual progress toward eliminating the release of any substance that may cause
environmental damage to the air, water, or the earth or its inhabitants. We will safeguard all habitats affectedby our operations and will protect open spaces and wilderness, while preserving biodiversity.
Sustainable Use of Natural Resources
We will make sustainable use of renewable natural resources, such as water, soils and forests. We willconserve non-renewable natural resources through efficient use and careful planning.
Reduction and Disposal of Wastes
We will reduce and where possible eliminate waste through source reduction and recycling. All waste will behandled and disposed of through safe and responsible methods.
Energy Conservation
We will conserve energy and improve the energy efficiency of our internal operations and of the goods andservices we sell. We will make every effort to use environmentally safe and sustainable energy sources.
Risk Reduction
We will strive to minimize the environmental, health and safety risks to our employees and the communities
in which we operate through safe technologies, facilities and operating procedures, and by being prepared for
emergencies.
Safe Products and Services
We will reduce and where possible eliminate the use, manufacture or sale of products and services thatcause environmental damage or health or safety hazards. We will inform our customers of the environmental
impacts of our products or services and try to correct unsafe use.
Environmental Restoration
We will promptly and responsibly correct conditions we have caused that endanger health, safety or theenvironment. To the extent feasible, we will redress injuries we have caused to persons or damage we havecaused to the environment and will restore the environment.
Informing the Public
We will inform in a timely manner everyone who may be affected by conditions caused by our company thatmight endanger health, safety or the environment. We will regularly seek advice and counsel through dialogue
with persons in communities near our facilities. We will not take any action against employees for reporting
dangerous incidents or conditions to management or to appropriate authorities.
Management Commitment
We will implement these Principles and sustain a process that ensures that the Board of Directors and Chief
Executive Officer are fully informed about pertinent environmental issues and are fully responsible for environmental
policy. In selecting our Board of Directors, we will consider demonstrated environmental commitment as a factor.
Audits and Reports
We will conduct an annual self-evaluation of our progress in implementing these Principles. We will support
the timely creation of generally accepted environmental audit procedures. We will annually complete the
CERES Report, which will be made available to the public.

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Acting on Principle
The CERES story is a long one and hard to summarize. It includes, for instance, a 1990 trip
to Japan, where I spoke with eager, diligent businesspeople who at least pretended to be riveted to the simultaneous translator next to me for three hours as the CERES story of mission
statement and reporting was told. There was no tradition of reporting in any form in Japan
when the idea of an environmental report was introduced to them. For me, the saga includes
tours of a steel plant, a lumber processing plant, and several automobile assembly plants.
It includes many meetings between companies whose stock is owned by public and private
investors and activists.
With the United Nations, CERES has in recent years spawned the Global Reporting
Initiative (GRI), promoting transparency and accountability around the world. Japan, wherereporting was once an alien concept, leads the world with more than 60 companies reportingon sustainability practices and results on the GRI format. Moving further across industries
and the globe, CERES has initiated a sustainable governance project, convening large-scale
pension and money managers around the issue of global warming and their fiduciary
duties.
The CERES story is part of our company’s story because we incubated CERES as we had
incubated the Social Investment Forum earlier. We donated countless work hours, provided
office space, paid employee benefits, and loaned them money. The creation of the Social
Investment Forum and of CERES was part of our original strategy of building networks tohelp social change.
The company clearly has been true to its goals around networking, supporting others, andfinding ways to distribute research so more investment professionals will employ social
screens and tactics. But what about the goal of building itself?
Building a company that walks its talk has been perhaps the most difficult of the threestrategic goals or the four elements of the mission statement. We have been through all thenormal stages of corporate organizational development (see accompanying article by Bill
Torbert for one version of these “normal” stages) and some stages that we may have invented as an employee-owned, regulated financial services company. We changed our name to
Trillium Asset Management because of trademark issues, changed our bylaws at least fivetimes, changed our capital structure several times, and worked constantly to improve customer service and our investment results. We have run into adversaries who think we’re evil
or communist, and have dealt with the competition we helped create – sometimes well andsometimes not so well. We have successfully defended ourselves in lawsuits by former managers over ownership, control, and account solicitation. We have had fun and we have hadtrying times – the market from 2000 to 2003 was no picnic. Soon we will have to deal with
the issue of entrepreneur succession.
The good news is, we are alive and very well, we have a great team of dedicated andempowered employees with very low turnover, we have grown to occupy four sites, and wecontinue challenging the outer reaches of SRI thinking. The trillium, the three-petaled flower
in our new name, stands for the three kinds of return on investment we and our clients seek:
good economic returns, increasing social equity, and disciplined attention to ecological sustainability. There are many more “bottom lines” we could insert around, between, or underthose three. Today we work to find new ways to define, measure, and report our successes

Adventures on the Way to Investing for a Triple Bottom Line � Joan Bavariareflections.solonline.org � R E F L E C T I O N S E M E R G I N G K N O W L E D G E F O R U M � Vol. 5, No. 8

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and failures beyond our steady financial growth. We work on new social issues not envisioned in 1979 when the first questionnaire was mailed: media consolidation, water scarcity,
land use issues, health care around the world, and more transparency.

ABOUT THE AUTHOR

Joan Bavaria has served as founding president and CEO of Trillium Asset Management since
its inception in 1982, and has chaired both the Social Investment Forum and CERES.
bavaria@trilliuminvest.com

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EMERGING KNOWLEDGE FORUM

Socially Responsible Investing
and Trillium Asset Management
By Bill TorbertA© 2004, Society for Organizational Learning. All Rights Reserved.

s Joan Bavaria has described in the foregoing article, she founded Trillium AssetManagement in the early 1980s by conducting a series of rather difficult conversations
with players who held quite different goals and perspectives – so different, in fact,that some of them initially couldn’t figure out why they should be in the same conversation.
The conversations attempted to respond to requests by a few clients to screen their investments somehow, not only for optimal short-term financial gains, but also for companies’
longer-term impacts on social equity and environmental sustainability. These clients had evidently made clear to themselves through some sort of first-person research that they wanted
a product/service that did not yet exist. The conversations that Joan instigated were, in effect,
second-person research processes about the future – about whether investing advice could
be reconceived, researched, and marketed as including desired outcomes over and above thefinancial return to the investor. The Socially Responsible Investing sub-industry that emerged
during the subsequent 20 years is the ongoing third-person research and practice outcome
from those early first- and second-person types of research (see sidebar, “Three Kinds ofResearch We Can Conduct During Our Practice”).
Profitability and growth in market share have long been primary forms of assessment forcompanies in market economies. An unanticipated and unplanned loss of profitability or adecline in market share are types of “negative” feedback that, in a relatively healthy company, may lead to a “single-loop” change in operations, such as raising the advertising budget
for the next quarter and cutting R&D. But sometimes a single-loop change is not sufficientThree Kinds of Research We Can Conduct During
Our Practice: DefinitionsFirst-Person Research During Practice: researchthat we do by ourselves on ourselves, e.g., assessing
the effects of our actions by inquiring or by meditatingon our feelings and primary values as we make animportant decision.
Second-Person Research During Practice:research we do together, at various points, in aparticular conversation, or as part of an ongoing work
team or voluntary community of inquiry, on how we are
performing, what vision and norms we share, and whether we wish to transform them.

7

Third-Person Research During Practice:research done by public institutions that research,
analyze, and publish the results of data generated by
the actions of many people who may be strangers to
one another, e.g., the stock market, electoral
systems, or the publications of professional, scholarly
associations.

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and what is really called for is a more demanding, double-loop change in strategy (such as
creating a new strategic alliance or outsourcing a certain function). And sometimes the negative feedback of loss of profitability seems to call for a triple-loop change in an organization’s
vision or mission, though this is the rarest and most difficult sort of change to sustain.
As suggested in Figure 1, single-, double-, and triple-loop changes may occur at the firstand second-person scales as well as at the third-person scale. One of the things that makes
Joan Bavaria’s story so remarkable is that she and her colleagues seem to have had the capacity, repeatedly, to create triple-loop conversations that threw into question one another’s waysof framing knowledge and practice, and led to new shared visions (the vision of socially
responsible investing in the first place, the vision for Trillium as a company, the vision for theSocial Investing Forum, the vision of the CERES Principles, and the vision for the Global
Reporting Initiative).
Figure 1: Single-, Double-, and Triple-loop
Feedback Across Four Territories of Personal and Social Experience
First-Person:

Second-Person:

Third-Person:

AttendingSpeaking & Listening

Organizing

Attending/Intending

Framing

Visioning

Feeling/Thinking

Advocating

Strategizing

Sensing/Acting

Illustrating

Performing

Perceiving/Effecting

Inquiring

Assessing

How Markets Learn
Before returning to Joan’s story, let us gain a little more familiarity with the ideas in Figure 1
by exploring briefly how the stock market as a whole reflects the four territories of experience and opportunities for single-, double-, and triple-loop learning and change. We canimmediately grasp that the minute-by-minute changes in stock prices represent the aggregate
assessment, by all stockholders who are buying or selling particular stocks at that time, of theeffects and implications for them of all current business and political conditions and actionsof which they are aware. Most lay investors focus the research that guides their choices ofwhen to buy or sell which stock primarily, or only, on the Assessing territory of experience.
They base their decisions on today’s headlines, yesterday’s price changes, or companies’ mostrecent quarterly results. Also, their research is often not disciplined, cumulative, or self-referential (that is, they don’t look at how they may improve their investing success by changes
in themselves).
However, such self-referential “action inquiry” in the Performing, Strategizing, andMission re-visioning territories of experience is possible in relation to stock buying and selling
decisions. Professional investment managers (as well as some savvy lay investors) engage inaction inquiry in both the Performing and Strategizing territories of experience about how totime and direct their buying and selling decisions. In the Performing territory, for example,
one can adopt as a self-referential performance discipline the rule: “Sell any stock that loses
8% of its value.” In the Strategizing territory, investment professionals can and do offer theirclients choices among different investing strategies (i.e., large-cap growth, mid-cap value,bonds, etc.).

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In the Mission re-visioning territory, Socially Responsible Investing (SRI) has, for the past
20 years, been offering an alternative vision of the very purpose and process of investing. The
aim in SRI is not just to maximize the investor’s financial bottom line by choosing relatively
reliably high-profit-margin companies. In SRI, the aim is to optimize a triple bottom line that
includes social equity and environmental sustainability as well as financial profit by investingin companies that give broader attention to all three (Waddock, 2001).
During its first 15 years, this approach to investing was treated as a laughable propositionby the big, traditional investment advising corporations, mutual funds, and mainstream
economists and finance professors. Why? Because, according to short-term rational choice
criteria, narrowing one’s investment portfolio on criteria other than shareholder wealthmaximization would reduce one’s financial return. No one except the small constituency richenough and sentimental enough to afford making relatively less money on their investments
would so invest their money, it was argued. (The work of 1998 Nobel Laureate in Economics,
Amartya Sen [1982, 1987; Klamer, 1989], is rare in recognizing that this isn’t necessarily so,though today a whole new vision of economic theory that interweaves sustainability, equity,and profitability is being developed [e.g., Robertson, 1989].) In short, institutional forces
reinforcing the “conventional wisdom” or “status quo frame” (not only in the financial
industry, but in the reigning academic economic paradigm) acted strongly to maintain isomorphism within the financial industry during this period, with only a few boutique SRI
firms managing to surface. This is why a triple-loop change in vision is difficult to sustain.
Nevertheless, during the late 1990s, two-thirds of the socially screened equity funds outperformed the average equity mutual fund over a three-year period, and major investment
houses were suddenly advertising “social” funds as quickly as they could mount any facsimile of one (Becker, 1999; Torbert, 1999). What had happened? The Chernobyl incident,
the Valdez oil spill, global warming research, the transition of South Africa from apartheidand of Eastern Europe from Communism, and many other events increased awareness of theneed to integrate profitability, equity, and sustainability. At the same time, socially screened
equity funds had proved they could match or exceed the financial returns of traditional funds
and could find a growing “green,” “cultural creatives” market segment that gained utility notjust from its financial returns on investments. This market segment also gains utility (or pleasure) from supporting companies that address social equity and ecological sustainability
concerns in relatively positive ways, and from supporting dialogue and shareholder initiatives
with companies that may be influenced to increase their concern with equity and sustainability, and not just with profitability.

Roots of Success
But how did this sub-industry that aims to transform our very way of envisioning company
success and personal utility arise in the first place and persist long enough to develop to thepoint of generating such positive data? My answer is that through her first- and secondperson research, Joan Bavaria made herself the kind of CEO who could support and sustain such a profound change, and that the kind of institutions of collaborative inquiry into
which she and her colleagues made Trillium, the Social Investing Forum, CERES, and the
Global Reporting Initiative (GRI) are the kinds of institutions that can best support andsustain such a profound change. Let me explain what I mean by this and what data support
this conclusion.

Socially Responsible Investing and Trillium Asset Management � Bill Torbertreflections.solonline.org � R E F L E C T I O N S E M E R G I N G K N O W L E D G E F O R U M � Vol. 5, No. 8

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I have spent the past 40 years of my career as a social scientist, social entrepreneur, andconsultant trying to understand why it is that certain leaders, certain kinds of organizations,and certain kinds of social science reliably learn and change based on single-, double-, or
triple-loop feedback – and why others just as reliably don’t. I have found that developmental
theory describes a process of repeated transformations that an individual, an organization, ora wider institution (such as the stock market or social science) can go through over long
periods of time. These transformations of our own or our organization’s action-logics gradually enable us reliably to make, first, single-loop changes in performance when warranted;
then, double-loop transformations of strategy; and finally, triple-loop changes in vision.
Table 1 very briefly describes this series of possible changes in action-logics. As the characterizations of Action-Logics V, VI, and VII indicate, persons, organizations, and scientificparadigms that develop to the levels of these later action-logics engage in increasingly intensive first-, second-, and third-person research. They thereby gain increasing contact with thefour territories of experience posited in Figure 1, and increasingly commit to interweaving
single-loop, double-loop, and triple-loop changes that sustainably align visions, strategies,
operations, and assessed outcomes.
My own and others’ empirical research (Cook-Greuter, 1999; Kegan, 1994; Torbert, 1991)
shows that only a very small percentage of CEOs and other leaders today develop themselvesto Action-Logic VI, the Strategist action-logic, where we theoretically become capable of supporting double-loop change (see Table 1). Further research has offered empirical confirmation that CEOs measured as Strategists uniformly succeed in supporting constructive
organizational transformation when they intend to, whereas CEOs measured at earlier
action-logics do not (Rooke & Torbert, 1998; Torbert & Associates, 2004). Joan Bavaria wasmeasured by the Leadership Development Profile (Cook-Greuter, 1999) in the 1980s as a rare
Strategist action-logic leader. So, my first explanation of the gradual rise of SRI as a legitimate
vision of investing, in spite of industry and scholarly resistance, is the quality of first-person
research and leadership exercised by an early and continuing champion of SRI.
My second explanation for the gradual rise of SRI is that, from the outset, Bavaria envisioned and sought to establish Trillium as an Action-Logic VI Collaborative Inquiry organization (again see Table 1, showing Collaborative Inquiry as the organizational analogue of theStrategist leadership action-logic). Trillium created a unique market niche, becoming the firstcompany solely dedicated to defining and practicing socially responsible, triple-bottom-line
investment advising, research, and advocacy. It remains the largest independent such company to this day, having been consistently profitable and having grown modestly but steadily
over a 20-year span – expanding to four branches, with more than $700 million under investment in 2003. Thus, it has steadily proven itself in first-order change terms: finding andgrowing a market. (These and the following facts and inferences about Trillium derive from
Brown, 1987, a doctoral dissertation on the earliest years of the company, and from thisauthor’s 15-year association with the company as a board member.)
To some degree, Trillium enacted the Collaborative Inquiry action-logic from the outset byincorporating itself as a worker-owned cooperative, with women and minorities constituting
a majority of the employee-owners. But the company also had to face a variety of daunting
challenges in order to transform, gradually and successfully, through the early organizational
action-logics. During the first decade of developing Trillium Asset Management, Bavaria
gradually attracted a board of directors with similar ideals and action-logics and, with
their support, overcame a potentially crippling lawsuit from a disgruntled board member and

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Socially Responsible Investing and Trillium Asset Management � Bill Torbertreflections.solonline.org � R E F L E C T I O N S E M E R G I N G K N O W L E D G E F O R U M � Vol. 5, No. 8

venture capitalist operating at an earlier action-logic. Bavaria also initiated and participatedin company-wide learning throughout the subsequent 20 years, seeking out a variety of consultants who helped the organization gradually transform through the Experiments andSystematic Productivity action-logics toward the full daily practice of the Collaborative
Inquiry action-logic. The company has transformed its financial/ownership structure twice
during this period, but still remains majority-employee-owned. The sense of mutuality andequity within the company is suggested by the fact that employee retention and longevity are
far better at Trillium than is the industry norm. The few employees who have gradually“moved on” through processes of performance reviews, personal choice, and company discipline have largely been those who have not been able to manage the paradoxes of competition and collaboration, and of economics and politics, in the company’s strategies and daily
activities. Thus have Bavaria and her colleagues created an ongoing, second-person research
process within the company that has made it capable of repeated double-loop learning andself-transformation.
The third reason for Trillium’s success dates to the early 1980s, when Bavaria applied thesame Strategist/Collaborative Inquiry action-logic to the development of the wider Socially
Responsible Investing sub-industry. She became one of the leading cofounders of the Social
Investing Forum, served as its chairperson for a time, and created an inter-organizational
network that could sustain the integrity of the new subfield. In 1989, Bavaria coauthored theValdez Environmental Principles (soon after renamed the CERES Environmental Principles),became the founding chair of CERES, and played a key role in attracting signatories such as

Table 1: Analogies Among Personal, Organizational, and Social Scientific Developmental Action-Logics
Personal Development

Organizational Development

Social Scientific Development

I. Birth-Impulsive

I. Conception

I. Anarchism (Feyerabend, 1975)(multiple, distinctive impulses gradually resolve into characteristic approach [e.g., many fantasies into aparticular dream for a new organization])
II. Opportunist
II. Investments
II. Behaviorism(dominant task: gain power [e.g., bike riding skill] to have desired effects on outside world)
III. Diplomat
III. Incorporation
III. Gestalt Sociologism(looking-glass self: understanding others’/markets’ expectations and molding own action to succeed in those terms)
IV. Expert

IV. Experiments

IV. Empirical Positivism(intellectual mastery of outside-self systems such that actions = experiments that confirm or disconfirm
hypotheses and lead toward valid certainty)
V. Achiever
V. Systematic Productivity
V. Multi-Method Eclecticism(pragmatic triangulation among plan/theory, operation/ implementation, and outcome/assessment in incompletely pre-defined environment; regularly acts on single-loop feedback to achieve incremental change)
VI. Strategist
VI. Collaborative Inquiry
VI. Postmodern Interpretivism(self-conscious mission/philosophy, sense of timing/historicity, invitation to conversation among multiple voices
and to mutual reframing of boundaries – hence, double-loop, transformational feedback occasionally acted
upon)VII. Alchemist
VII. Foundational Community of Inquiry VII. Ecological, Cooperative Inquiry(life/science = a mind/matter, love/death/transformation praxis among others, cultivating interplay andreattunement among inquiry, friendship, work, and material goods – continual triple-loop feedback sought
among intent, strategy, action, and effects)

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General Motors to the Principles. By 1999, CERES had organized 19 institutional investmentgroups, representing $195 billion, for a year-long drive to dialogue with leading companies
about endorsing the code of conduct on corporate accountability.
As the decade drew to a close, the CERES Coalition launched the Global Reporting
Initiative – guidelines focused on sustainability metrics and supported by corporate, NGO(nongovernmental organization), and government partners, with a $3-million grant from theUnited Nations Foundation. “We're moving beyond the concept stage and into the implementation stage,” she said. “Our goal is simply to make environmental reporting standard procedure for public companies around the world” (Bavaria, 2000). In short, the third reason
that Bavaria and Trillium succeeded in re-visioning investing is that she and her colleagues
created third-person research processes through which firms can measure, critique, andimprove their performance on all three bottom lines.
By co-creating Trillium Asset Management, the Social Investing Forum, CERES, and GRI,
Bavaria participated in creating entirely new standards of legitimacy, not just within the fieldof investing itself, but among business corporations nationally and globally. Recent recognitions she has received symbolize this new legitimacy. In 1999, Bavaria was chosen as aTime.com “Hero for the Planet.” In 2000, she was honored by Global Green USA and Green
Cross International president Mikhail Gorbachev with the Millennium Award for Corporate
Environmental Leadership. In 2002, she was named by Scientific American magazine as oneof the “Scientific American 50” for her positive impact on the environment as a businessleader.

The Challenge of Socially Responsible Investing
In this case, we see an entrepreneur capable of focusing simultaneously, from the start, on
first-order economic success in the market (profitability), on second-order, transformationalchange within her own company, and on a new, third-order vision for the field of investing
which we today call the triple bottom line. At the same time, she created a succession ofever-wider new institutions that support transformation in financial advising, in corporate
reporting, and in economic theorizing.
The vision, means, and assessment procedures for triple-bottom-line investing may takegenerations to embody fully. Indeed, the recent popularity of social investing, based on its
single-loop financial returns, threatens to erode its triple-loop principles and practices, as
more large investment houses mount superficial social screens for the sole purposes of shortterm sales, and more companies tout themselves as “sustainable” when they have in fact
made little more than an espoused commitment in that direction (Torbert, 1999). Furthermore,because SRI funds tend to eschew big oil companies, they also tend toward high-tech companies. As a result, the combination of war and recession in 2001–2002 reduced SRI financial
returns (with a rebound in 2003). Moreover, the entire SRI movement is still in its infancy,
including all its methods of assessment. (Even “straight” financial accountants have been
having a good deal of trouble cranking out the true numbers in the late 1990s and early
2000s!) Therefore, there is appropriate, continuing controversy about all the claims made inthese paragraphs on behalf of Socially Responsible Investing, and the reader is invited toinquire further (e.g., Entine, 2003; Waddock 2003).

12Socially Responsible Investing and Trillium Asset Management � Bill Torbertreflections.solonline.org � R E F L E C T I O N S E M E R G I N G K N O W L E D G E F O R U M � Vol. 5, No. 8

References
Sen, A.,1982. Choice, Welfare and Measurement. Cambridge, MA: MIT Press.
Sen, A., 1987. On Ethics and Economics. London: Blackwell.
Klamer, A 1989. A Conversation with Amartya Sen. Journal of Economic Perspective 3(1), 135-150.
Becker, E., 1999. Social Funds Track Record Lengthens, Strengthens, Investing in a Better World 14(8),1-6.
Torbert, W., 1999. The Meaning of Social Investing, Investing in a Better World 14(10), 2.
Waddock, S., 2001. Leading Corporate Citizens. NY: McGraw-Hill Irwin.
Cook-Greuter, S., 1999. “Post-autonomous Ego Development: A study of its Nature and Measurement.”
Cambridge, MA: Harvard University Graduate School of Education, Doctoral Dissertation.
Kegan, R., 1994. In Over Our heads: The Demands of Modern Life. Cambridge, MA: Harvard University
Press.
Torbert, W., 1991. The Power of Balance: Transforming Self, Society, and Scientific Inquiry. Newbury
Park, CA: Sage.
Rooke D. & W. Torbert, 1998. Organizational Transformation as a Function of CEOs’ Developmental
Stage, Organization Development Journal 16(1), 11-28.
Torbert, W. & Associates, 2004. Action Inquiry: The Secret of Timely and Transforming Leadership. San
Francisco: Berret-Koehler.
Bavaria, J. 2000. The Global Reporting Initiative, Investing in a Better World 15(2), 1.
Waddock, S., 2003. Myths and Reality of Social Investing, Organization and Environment 16(3), 369380.
Entine, J., 2003. The Myth of Social Investing: A critique of its practice and consequences for corporatesocial performance research, Organization and Environment 16(3), 349-368.

ABOUT THE AUTHOR

Bill Torbert is a professor of management at Boston College and has authored many articles andbooks, including Action Inquiry: The Secret of Timely and Transforming Leadership (Berrett-Koehler,2004), from which this article is adapted.
torbert@bc.edu

Socially Responsible Investing and Trillium Asset Management � Bill Torbertreflections.solonline.org � R E F L E C T I O N S E M E R G I N G K N O W L E D G E F O R U M � Vol. 5, No. 8

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Reflections
The SoL Journal

on Knowledge, Learning, and Change
Volume 5, Number 8

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