In praise of short-termismApril 30, 2013: 2:03 PM ET
The environmental movement generally lacks an appreciation for the imperatives of business.
FORTUNE -- Peter Seligmann, the chairman and CEO of Conservation International, has a solution for our environmental ills: He wishes companies didn't have to report quarterly earnings. It's a familiar refrain for many who lament our society's short-term thinking. In Seligmann's case, he thinks that if big, publicly traded corporations didn't think on a quarterly basis they could do right for the environment because they could better think for the long term.
Fair enough. Never mind that Seligmann doesn't offer an alternative. For instance, how are companies who rely on the liquidity of the capital markets to inform their investors, who will want the ability to act on that information? Details, details.
Seligmann isn't alone. Over and over on the first day of Fortune's annual environmental conference, Fortune Brainstorm Green, speakers dissed corporate myopia. Jochen Zeitz, the chief of Puma, says short-term thinking works against sustainability. (He's forming a brainstorming group, the B-team, with Richard Branson to address the matter.) Rick Ridgeway, vice president of environmental initiatives at Patagonia, takes things a step further, edging into a nearly socialist category in arguing that growth and affluence are the biggest dangers to the environment. He says the "elephant in the room" is that global growth is leveling off and possibly declining, which is a good thing for the environment. As a private company, he says, Patagonia can revel in this. Those public companies that must answer to public investors can't.
What's going on here, I think, is that the environmental movement generally lacks an appreciation for the imperatives of business. The issue isn't so much growth as liquidity. Planning for the long term isn't just noble, it's good for business. Ignoring that there are all types of investors, however, is naïve.
Clarence Otis, the CEO of Darden Restaurants (DRI), gets this. His chain, Red Lobster, introduced seafood to Middle America and is working to farm lobsters for the first time, a long-term project underway in Malaysia. He says the clawless lobsters won't be produced at scale until 2030. He also rejects that business is too short-term-oriented. "Most successful managers don't manage for the short term," he says.
Perhaps the most sensible environmentalist at the Fortune conference is, of all things, an ex-Goldman Sachs (GS) banker. Mark Tercek, CEO of the Nature Conservancy, is promoting his book, Nature's Fortune. He tells an insightful story of interactions between his scientists and engineers at Dow Chemical (DOW), which wants to work with his organization on conversation programs. Turns out the Dow engineers understood the practical science under discussion far better than the environmentalists, in Tercek's opinion. His scientists are very good at theorizing, he says, and less good at offering solutions. (Tercek is one of the most articulate, fluid, nimble, explanatory speakers I have heard in a long time. If he writes half as well as he speaks, I want to read his book.)
Businesses need solutions. They are willing to listen to criticism. Thumb-sucking admonitions, not so much.
Two expressions caught my ear at the conference:
Upcycling. This refers to taking used material and finding a better use for it, as opposed to grinding it into park benches, for instance. Putting used plastic into fabric for clothing or turning garbage into energy are two examples of upcycling. This isn't a new term in the environmental/sustainability world. But it was new to me.
Wild fisheries. This is what normal people would call oceans or rivers or lakes. It refers to the fact that fish are often farmed now. It's what the late, great lexicographer William Safire referred to as a retronym, like acoustic guitar. It struck me as funny.