The Great Paradigm Shift

By Bill Baue & Marcy Murninghan Senior Research Fellows

Trends emerge from culture and drive business, and companies best able to discern how current trajectories portend future market directions stand to outperform.  In particular, sustainability trends increasingly impact bottom lines, so going forward, we at AccountAbility are focusing our monthly intelligence reports on trends analysis.

We start with perhaps the most significant sustainability trend: resource constraints, particularly those caused by climate impacts, but also due to human extraction of the planet’s finite bounty.  As global society enters a world of “peak everything” – from oil to soil to freshwater – economies respond accordingly.  With declining supply pushing demand and prices up, up, up, competition for scarce resources already fuels conflict, challenging companies committed to responsible competitiveness and sustainable prosperity to radically redefine their most material concerns and revise business strategy to mitigate risk and seize opportunity of solving sustainability dilemmas. 

THE GREAT PARADIGM SHIFT: SINGLE PLANET, FINITE RESOURCES

“About 55 years ago, our species began to wake up to the fact that we live on a single planet.” So said sustainability guru John Elkington recently, describing the paradigm shift we’re currently traversing, into the realization that human impacts such as natural resource depletion and climate change are literally changing the face of our planet.

Investment legend Jeremy Grantham concurs, provocatively suggesting that our numbers (and habits) have finally and permanently outstripped the planet's ability to support us.  He calls this the “Great Paradigm Shift,” from a protracted period of abundant resources pressing prices down, to a now- permanent state of constrained resources and climate consequences pushing prices ever upward.

“Great” is emerging as the term-of-choice to describe the change we’re navigating:

• Paul Gilding writes of a “Great Disruption” triggered by the fact that the “earth is full”.
• The Tellus Institute outlines a “Great Transition” of shifting values and transforming institutions to achieve a future of enriched lives, human solidarity, and environmental sustainability.
• Lester Brown warns of the “Great Food Crisis,” which sparked the fiery Arab Spring.

This “great” consensus is hard to dispute: It’s no longer a question of when transformation takes place—it’s already underway, evidenced by ever-rising commodities prices and increasingly catastrophic weather patterns that fuel political instability escalating toward wars over water, fuel, and food.

Experts agree on two converging trends that drive this paradigm shift: unfettered growth, which eventually compounds exponentially to unsustainable consumption levels; and anthropogenic (or human-induced) global warming, which poses threats to security and stability.

The question is how companies will act in response to these changes in ways that foster responsible competitiveness in both developed and emerging economies.

Here are two key places where work has already started . . .

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