Notes from the floor: using a Triple Bottom Line sustainability perspective in economic development.

Back in October, I moderated a session for the International Economic Development Council’s annual meeting that focused on a subject that is so new to economic development that… we needed five people to talk about it.  I joked that I was going to need to bring my whip and hob-nailed boots to keep them all in line, but they all behaved well. ‘ Course, it was 7:30 AM when we started, so maybe they were just still sleepy…

The session focused on the challenges and opportunities facing communities that decide to pursue a sustainable approach to economic development.  For this session, we actually defined “sustainable” more broadly than just using green energy, or recyclable materials or anything like that.  Each of the panelists was using a full-blown Triple Bottom Line approach to drive their economic development work.  For those of you for whom this is a new topic, a Triple Bottom Line approach means that they are trying to balance economic, environmental and community concerns — for example, designing programs that are at the same time profitable, environmentally sensitive and beneficial to the residents of a community, especially those who have tended to be cut out in the past.    Sounds like an impossible quest, I know.  But as each of these panelists so well articulated, it’s a matter of maintaining consciousness of the interplay of these issues, and doing the best you can in a given situation, rather than giving up if you can’t do it all perfectly.

You can hear a full audio of the session at the bottom of this page or at soundcloud.com/wiseeconomy.  Since it’s a conference session, it runs well over an hour, but I think it’s definitely worth a listen.  Insightful and illuminating stuff.  But if you don’t have time to listen, I wrote out a summary version that I’ll paste in below.

I’m hoping to continue this conversation at future economic development events, with both these speakers and with the dozens of others who could have also been on that stage.  There’s good stuff out there — I think the main challenge right now is raising our understanding of what really is possible.  Enjoy!

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As I told the audience at the beginning of the session, the question of how to do economic development sustainably is a new one for this profession, at least for this organization.  Although many of us have dealt with LEED building criteria or been charged with improving urban employment or had to find answers to site selectors’ questions about the sources of water or electricity provided to a site, the economic development profession as a whole has only begun to deeply grapple with what it means to do economic development sustainably.

 

And as the panel’s participants noted, “sustainable” does not mean just energy efficient or constructed out of renewables. Around the world, “sustainable” development has been understood in terms of its impact on three major elements–the economy, the environment, and the communities of people impacted (often referred to as the “Triple Bottom Line“).  Honored sometimes more in the breach than the doing, a truly sustainable effort asks for the best possible balance between these three, sometimes opposing, forces.  So this was the challenge facing both our panelists and our audience.

 

Here’s some highlights of the discussion:

  • Several of the speakers talked about sustainability and the Triple Bottom Line as a lens or filter–a shift in perspective that allowed viewers to identify new ways of doing conventional tasks, changing the approach or the strategy just enough to generate a more sustainable result.

 

  • Andre Pettigrew, CEO of Clean Economy Solutions and former director Office of Economic Development,City and County of Denver, emphasized that sustainable growth isn’t just about “minimizing the footprint,” but about finding new opportunities through the new markets that the worldwide shift to sustainability creates– opportunities for economic growth and for new employment..

 

  • Cathy Polasky, Director of Director of Economic Policy and Development for the City of Minneapolis, described the evolution in her own thinking and how her department and others have changed how they work as a result of a need to address sustainability. Starting out as “mortal enemies” fighting for a slice of the budget, Cathy’ s department learned to get their sustainability mandates inserted into other departments’ work.  But as budgets shrank, it became increasingly evident that all of the City’s departments needed to work in concert if they were going to hit all of their targets, leveraging all their projects and initiatives to hit the full range of sustainability-related goals.  As a result, all of the City’s investments became informed by Triple Bottom Line priorities, creating what Cathy called “a pragmatic coalition” that incorporated a sustainability perspective.

 

  • Janet Hammer, Program Director of The Initiative on Triple Bottom Line Development at Portland State University, noted that economic development does not necessarily have to mean economic growth, and that the more important question has to do with creating jobs and prosperity that support individual and community well-being.  She noted the importance of looking for interconnections and ways to seek collaboration.  Janet also cited a survey of economic development professionals, in which a high proportion of respondents identified sustainability issues as highly important to their community. But the survey respondents also noted that they didn’t have any training on that topic, that they weren’t rewarded based on their impact on sustainability issues, and that, in many communities, sustainability didn’t seem to be anyone’s particular job.

 

  • Mark Newberg, Managing Director of Impact Investment Strategies at 5 Stone Green Capital, described his company’s “layered impact strategy” for evaluating opportunities to fold sustainability priorities into an investment.  As he noted, “this stuff had to make sense from an economic perspective,” but he went on to demonstrate that a shift in perspective, in time frame, or in understanding of the purpose of a project can open up new approaches that can enable more sustainable building, programming and financing.  He concluded that the key challenge was to set sustainability-relevant goals for a project and then find others with similar goals, underpinned by sound economics.

 

  • Karl Seidman, Senior Lecturer at MIT and director of MIT CoLab’s Green Economic Development Initiative, noted that recent research on sustainable economic development identified a three-point framework for shifting an economic development organization to more sustainable approaches.  According to Karl, the first step lies within the organization itself, with bringing a sustainable perspective into its mission and priorities, since these will drive what the organization is enabled to do.  The second step requires incorporating sustainability properties into existing work, adjusting day to day operations (for example, strengthening the sustainability impact of new business recruitment by proactively sharing information about sustainable building methods and suppliers).  The third step, then, is to look beyond the economic development organization and identify broader policy and system changes needed to meet sustainability priorities more effectively–an important but particularly hard challenge for economic development organizations because they are so used to working on transactions.

I started the discussion part of the session with two basic questions.  In the first, I noted the less-than-enthusiastic reaction that one economic development professional had given me the previous night when he noted the speaker ribbon on my name tag and asked what I was going to be talking about.  How, I asked the panelists, do you get past the first reactions to the word “sustainability,” which can either mean nothing in particular, or get attached to a simplistic political agenda?

 

  • Mark noted that businesses often seek goals that are consistent with “sustainability,” but for reasons that have to do with their own operations, rather than an abstract environmental benefit.  Mark told the story of the development of concentrated laundry detergent: the driver for this evolution was large retailers’ desire to get more sales units out of the same unit of transportation.  By lessening the amount of water being shipped, each shipment generated more profit per truckload — and as a side effect, the manufacture of the detergent was redesigned to consume less water.

 

  • Cathy explained that they typically talk not in terms of sustaintability, but in terms of resilience – the ability of a business or a community to be able to withstand shocks.  Lessening energy usage in a building, she noted, makes the business less at risk of falling into financial trouble if energy prices increase.  Andre reinforced this concept by noting that discussions of sustainability get stymied when people think that they must include a particular energy source, such as solar, or else they cannot to anything to be “sustainable.”  In reality, the more important question that efforts to improve sustainability address revolve around lessening risk of negative impacts and strengthening odds for survival.

 

  • Janet noted that sustainable approaches are arguably more conservative, in that they tend to have the side effect of lessening risk and increasing efficiency

 

  • Karl also noted the potential for sustainable development to increase a business or community’s economic resilence – by lessening the amount of money that has to be spent to purchase energy, one can actually increase resilience and competitiveness by making more of the business’s funds available for other uses.

 

The second question I asked had to do with economic development’s tendency to emphasize the big projects. I asked the panel how a sustainability perspective influenced or impacted mega-projects.  Mark gave a straightforward piece of advice: “Look at the supply chain.”  He asserted that an asset management approach to evaluating a project often helped uncover opportunities for savings that might be overlooked otherwise.  He noted recurring line item costs, such as supplies or maintenance as a particular potential.  He noted that one can seldom attain optimal sustainability on everything, but that evaluating supply chain and recurring costs can indicate some otherwise overlooked opportunities.

 

The first audience question addressed one community’s struggles to address the human element of the triple bottom line ideal.  He noted that in his community, discussions about equity frequently devolved into an assumption that it was all about race, although he noted that the social aspect of sustainability actually extends to the whole community.  Andre noted the importance of resilence again — that communities need to be able to effectively leverage their whole resource set, which includes the full range of its people.

 

Another audience member asked about metrics, and the challenge of demonstrating the value of economic development efforts to elected officials and other stakeholders.  Mark said that different investors or supporters will need different metrics, and that it was important to work within the metrics that they were looking for and find ways to demonstrate additional benefits through the use of more sustainable choices.  From his perspective, the appropriate approach was to work within the existing expectations to show meaningful improvement.  Andre added that public discussions about sustainability have an unfortuate tendency to fall into a “jobs trap.”  Like other types of new industries and advanced manufacturing, sustainability initiatives in themselves are unlikely to generate massive numbers of new jobs in themselves, and sustainability policies that were sold as a one-shot solution to job creation were  likely to result in a failure.  Andre noted that “we need to modulate what we’re going to expect” and that equal parts of the challenge are to grow the supply of sustainable resources and to grow the demand for these products and services.

 

A particularly interesting question for me came from an audience member who asked where the panelists thought the IEDC’s new Sustainability Committee should  place its priorities (two of the panelists and myself sit on that committee).  Janet said that the greatest need was to forge partnerships – to connect the economic development profession more strongly to the full range of others who are trying to address sustainability issues.  Karl noted that the Urban Sustainability Directors Network was currently working on a database of sustainable economic development tools, and expressed some concern that this initiative and that one may not be connected deeply enough.

The final question that I could take during the time we had available had to do with drawing attention to sustainability initiatives.  Cathy noted that her city and others have had some success with competitions that provided a small award for energy efficiency, and Mark said that a region’s property assessment organization may be able to help quantify the benefits.  Mark also noted that a common low hanging fruit in sustainability was to use energy usage disclosure and benchmarking to encourage property managers to seek efficiency improvements.

 

In wrapping up the session, I noted that this session was the beginning of what I hope will be an ongoing conversation within economic development.  I also expressed my opinion that the economic development community may have a unique ability to serve as a convener around this topic, helping to bridge the gaps between the full range of partners we will need to draw on to enable sustainable economic development.

 

 

One thought on “Notes from the floor: using a Triple Bottom Line sustainability perspective in economic development.”

  1. Excellent discussion. Urban environments are rife with externalities that often thwart the attainment of the Tripple Bottom Line. However, there are techniques for internalizing these externalities, thereby allowing the economy to work more efficiently and affordably for residents and businesses alike. Some of these techniques also promote more compact development, which reduces energy and resource consumption, reduces pollution, and helps conserve outlying areas for agriculture, recreation and conservation. For more information, see “Funding Infrastructure for Growth, Sustainability & Equity” at http://media.wix.com/ugd/ddda66_d46304b5437c178e2f092319a6f30364.pdf

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