insights

What you should know about Green Swans

#vision and analysis  •  30/08/2020  •  Katelijne Norga

A new term is poking its nose into the business world: the Green Swan. It is John Elkington himself, the founder of corporate social responsibility (CSR), who introduces the term, as a means of emerging stronger from the COVID-19 and climate crisis. What exactly should you know about the Green Swan?

© Volans

By way of introduction, who is John Elkington? The British business consultant introduced the triple bottom line in 1994, a concept to balance the economic vitality, ecological impact and social responsibility of businesses. Since then, the three Ps have been the frame of reference for companies worldwide to put sustainable business into practice.

 

But now the world-famous CSR authority himself is challenging the triple bottom line. Social responsibility is not enough; only by resolutely investing in resilience and regeneration will we survive the crisis, he says. Green Swans show the way.

What is a Green Swan?

A Green Swan is a violent market shift that sets in motion exponential progress in terms of economic prosperity, the environment and society. Think of the electrification of the automotive sector. Or the development of vegetable substitutes for meat. Elkington elaborates on the concept of the Black Swan, developed by Lebanese risk scientist Nassim Taleb (2007): an event with a devastating impact, which nobody could have seen coming or can explain. Recent history has seen many Black Swans, such as the climate crisis, the nuclear disaster in Fukushima or the forest fires in Australia.

 

While such exponential, disastrous developments occur because people are out of control, a Green Swan is the result of a conscious process (often in response to a Black Swan) and of changing values and mindsets, new technologies, business models and policy systems. A Green Swan rises, as it were, from the ashes of a Black Swan disaster, according to Elkington. Green Swans require far-reaching system changes and a large commitment of time and resources. At the start of their emergence, their breakthrough is often labelled as impossible.

Why do we need Green Swans?

The world population growth, the climate crisis, COVID-19, the economic crisis, increasing debt: today’s world is an ideal breeding ground for Black Swans. And they bring us events or developments that we absolutely do not want. To find the way out to a better, sustainable world, Elkington asks us to focus on regeneration. Regeneration of our economy, our society, our natural capital, our financial and political system.

 

Green Swans can help to realise regeneration and are therefore the way to go. According to Elkington, politics and government have a capital responsibility to drive the necessary systemic change and give Green Swans a boost.

What can companies do to emerge stronger from the crisis?

If companies want to sustainably survive in these times of economic crisis and disruption, they too must focus unequivocally on resilience and regeneration. They can do this by reinventing themselves, becoming part of a Green Swan. As a company, there is only one way to go: embrace the sustainable transition, identify opportunities and reorient.

 

Companies that focus today on markets defined by sustainability-related trends will be the successful companies of tomorrow. Elkington also gives examples of companies with radical change as their business model. Tesla, which has caused a race against time throughout the automotive sector to keep up with the electrification of the car fleet. BMW expects to have 23 electric models on the market by 2025; they have even announced 70 by then. Oil tycoon Shell wants to become the largest electricity company in the world, in order to get ahead of the switch to green electricity. Umicore, two decades ago still a traditional metal company, is today a world player in the circular economy.

 

COVID-19 will inevitably lead to bankruptcies, consolidations and takeovers, Elkington believes. But once the storm has died down, he predicts a tsunami of innovative companies and brands that will drive and install the new economy. 

Read the full interview with John Elkington on our media platform Susanova. And we also have a little extra in store: new Susanova subscribers will receive the book Green Swans. The Coming Boom in Regenerative Capitalism as a premium.

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