What is sustainability 2.0?

Sustainability 2.0 is not an established concept. It has popped up from time to time over the last few years. But from the glimpses I have seen, it represents a profound change in the way we think about sustainability.

Two of the more authoritative pointers that form the concept, are the book Sustainability 2.0 by Ernesto van Peborgh and the late, great, C.K. Prahalad’s September 2009 Harvard Business Review article. Van Peborgh’s book links sustainability 2.0 to the radical societal changes driven by Internet 2.0 and 3.0 – the participative web.  The book’s case studies of companies pursuing sustainability, categorise them as pioneer companies, companies that change and sustainable companies. Companies that change, appear to typify Sustainability 1.0 – companies originally motivated to adopt sustainability as a response to some public relations crisis caused by unsustainable practices.

In the HBR article Why Sustainability Is Now The Key Driver of Innovation, C.K. Prahalad and his co-authors clearly articulate the change to what we might call sustainability 2.0. Companies move from risk aversion to aspiration. The authors claim “in the future, only companies that make sustainability a goal will achieve competitive advantage”. Thus, sustainability becomes a catalyst for rethinking business models, products, technologies and processes.

We are very near the beginning of this bell curve. Companies that position sustainability central to strategy are still rare. Prahalad asserts that most European and American executives believe that moves towards sustainability will erode competitiveness. “That’s why most executives treat the need to become sustainable as a corporate social responsibility, divorced from business objectives”.

The new frontier is wide open. Prahalad calls sustainability the “motherlode of innovation”. It may well be the dominant driver for business development and opportunity over the next few decades. Some big players are taking full advantage and also driving sustainability through to their suppliers. Walmart announced sustainability 2.0 in 2008. That year Walmart directed more than 1000 Chinese suppliers to achieve sustainability targets.

Prahalad and his co-authors outline five stages of sustainability that each offer opportunities to innovate. The article provides inspiring examples of how companies are exploiting these opportunities and finding new market niches in a recession. The stage 5 concept of next-practice, where businesses create new practices that transcend and displace current practice, infer a paradigm shift. The smart grid, where diverse electricity inputs and outputs move around a locality to maximise efficiency and minimise energy imports is cited as an example. At present we are so conditioned to remote distributed networks, that we take them for granted.

New movements require new language and new tools. Corporate social responsibility infers guilt and reparation whereas corporate sustainability is more future-focussed. Sustainability reporting is a tool designed for justification and to assuage guilt. Energy invested in sustainability initiatives is better spent pursuing innovation than pursuing a ranking on a reporting league table.

Of the sustainability tools on hand, stakeholder engagement appears more relevant to sustainability 2.0 than sustainability reporting. Stakeholder engagement is more future-focussed as it seeks to find the pathway forward in dialogue with stakeholders. Stakeholder conversations are where innovative ideas are likely to arise.

In conclusion, this blog is a tribute to C.K. Prahalad’s acute vision and humanity. In the article referred to here, and in his other recent work such as The Fortune At The Bottom Of The Pyramid, he has helped to open vistas where businesses can prosper, and importantly, we can collectively create a prosperous, just and sustainable world.

Peter Bruce 16 August 2010


  1. I agree with Peter’s analysis.
    To me Sustainability encompasses a holistic philosophy based on the great commandment to do unto others as you would have them do to you. In other words by loving your neighbour as yourself you stop being greedy and leave a profit in the deal for the next player. Live life and live it abundantly but always remember that by throwing back the little undersized fish there is a strong chance they will grow into big fish that reproduce and and also feed a family.
    Nourish the earth and it will feed the people!

  2. Interesting stuff Peter,
    From what you have written, the key underlying motive for adopting Sustainability 2 practices, still appears to be profit and growth. To me, if the motive and drive is to seek, create and satisfy new markets so that profits and growth can be achieved, then Sustainability 2 misses the mark. I believe for true Sustainability 2, the first and key concern has to be: “will this truly benefit others and the planet, now and in the future” – if it will, then consider whether one can make a profitable business that does not leave horrendous social and environmental costs for others to carry.

  3. This article raises many interesting points and I agree with the author Peter Bruce that Stakeholder engagement is the pathway forward. When done well stakeholders will work with companies to find lasting solutions. As the relationship grows stronger one off events are regarded as one off events. This enables a more colloborative approach to sustainability.

  4. I would like to contribute a passage from “Rethinking Prosperity” a statement from the Baha’i International Community to the 18th Session of the United Nations Commission on Sustainable Development. To me this pinpoint the task that we, as the inhabitants of this small planet, have to overcome to bring about a sustainable world.

    “The question of human nature has an important place in the discourse on sustainable consumption and production as it prompts us to reexamine, at the deepest levels, who we are and what our purpose is in life. The human experience is essentially spiritual in nature: it is rooted in the inner reality—or what some call the ‘soul’—that we all share in common. The culture of consumerism, however, has tended to reduce human beings to competitive, insatiable consumers of goods and to objects of manipulation by the market. Commonly held views have assumed the existence of an intractable conflict between what people really want (i.e. to consume more) and what humanity needs (i.e. equitable access to resources). How, then, can we resolve the paralyzing contradiction that, on the one hand, we desire a world of peace and prosperity, while, on the other, much of economic and psychological theory depicts human beings as slaves to self-interest? The faculties needed to construct a more just and sustainable social order—moderation, justice, love, reason, sacrifice and service to the common good—have too often been dismissed as naïve ideals. Yet, it is these, and related, qualities that must be harnessed to overcome the traits of ego, greed, apathy and violence, which are often rewarded by the market and political forces driving current patterns of unsustainable consumption and production.”

  5. Peter has written a thoughful and challenging idea for any business. In the world of many options for organisations to choose Peter makes a compelling case for sustainability 2.0 to be at the core of any organisational strategy

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