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Professor Daniel Veit: Multiple Conflicts Between Targets for Sustainability and Growth

Ecological sustainability and economic growth contradict each other in many ways. In this interview, Professor Daniel Veit, Chair of Business Administration with a focus on information systems and management at the University of Augsburg, points out that many of the people involved think in silos, a situation that often prevents the breakthrough of solutions.

From your point of view, has the discussion about sustainability now arrived in the business world?

That’s understandably a key question, but I see a discrepancy between what business considers sustainable and what would be necessary from the perspective of long-term social development. In addition, there is the accusation of greenwashing because some commercial enterprises want to exploit a trend and feel they can no longer evade external pressure. The difficulty is that our industrialized and technologized society is based on the consumption of energy and resources and is by its very nature not sustainable.

The wake-up call found in the Club of Rome’s report “The Limits to Growth” on the state of humanity in 1972 questions the entire structure of industrialization and use of natural resources because our standards preclude business operations and the concurrent realization of ecological sustainability. Truly sustainable production of highly sophisticated items is virtually impossible; it’s a major dilemma. The topic has also been an element of mainstream politics for 30 years, but even the establishment of the Green Party in many Western countries or the book on climate protection published by Angela Merkel (at that time Minister of the Environment) in 1997 have so far had little impact on today’s political actions.

What role does digitalization play in relation to environmental concerns?

Digitalization must be viewed from two different perspectives. It has the potential to secure significantly greater efficiency in many areas such as the linking of supply chains and added-value networks, the use of resources in the sense of a circular economy, and the avoidance of travel through virtual conferences.

Yet digitalization consumes substantial resources during the production of new devices. For example, new IT artifacts feature a large number of different resources in composite form that are hardly recyclable. Moreover, the consumption of energy required for the strong encryption of distributed ledger technologies and blockchain is enormous — they are beyond question “climate killers.” It is imperative that we address this issue.

Are there certain sustainability topics that, from the point of view of science, are especially crucial in the clashes among interest groups?

At the macro level, the dialogue from the political establishment and the general public to the media and science is immense, and many elements of the discussions give rise to hope. At the micro level within the scientific community, however, little of the in-depth discussion actually finds its way to the outside world. Unfortunately, only the innovations with the greatest impact rise to the surface from the specialist communities.

The topic of nuclear fusion, for example, is virtually non-existent as a key element of public discussion at the moment, although progress in this area is accelerating. Until there is a product close to market maturity that produces nuclear fusion-based energy and can serve as an alternative to nuclear fission and nuclear power plants, it will be ignored by the public. Phenomena in science tend to exist in a niche for a long time until there is a striking breakthrough.

Seen at the micro level, science is enormously multifaceted and has expanded to galactic scope as time has passed; one consequence has been its fragmentation into entirely new subfields. When people think in silos, they fail to see the compatibility of solutions with other areas; the wheel is reinvented over and over again. Setting aside the macro and micro levels, we suffer from a lack of knowledge sharing; this can be bridged in part by good (expert) platforms, but I do not believe it will ever reach an optimum.

Sustainability and digitalization are arousing inordinate interest on all sides. Among young founders, sustainability often lacks a well-thought-out narrative beyond actionism. Would you say that the issue of sustainability is more of a priority or a secondary consideration for startups?

Sustainability is quite often a part of a narrative; I have experienced this at the Augsburg Center for Entrepreneurship. I myself am rather critical of the topic of “sustainability and startups.” I question every startup team I counsel at the center to determine if they are truly serious or are simply giving lip service to the current trend of thinking green — in other words, how credible are they?

The favored parties among first-time voters in the Bundestag election showed that a large proportion voted for the FDP and the Greens — that amazed me. FDP supporters more and more frequently employ sustainability jargon although the party was comparatively late to recognize the issue. In the past, their paramount goal has always been the maximization of the business economy. Yet environmental sustainability and economic growth are essentially contradictory — they are diametrically opposed goals. The difficulty is in achieving a synthesis of the two issues that is viable, not just verbalizing them. There are certainly reasons to doubt the credibility of these statements at times.

On the other hand, I also see startups whose sustainability concepts actually work; the sharing economy is one example. How can we make better use of existing resources? Still, there is a huge contradiction between what some young people say and feel is important and how they act or what they consume individually.

To what extent would our sustainability awareness change if we gained greater transparency about our individual CO2 consumption?

There would presumably be some rather drastic changes if people were made radically aware of what they consume. For example, when they get out of the car and the display shows the CO2 footprint they have left behind. This goes in the direction of nudging and gamification, made possible by digitalization. Such incentives can be purely manipulative aimed at inducing purchase intentions, but in the example described, they can also have a positive effect and prompt people to think about their own behavior.

There will always be a conflict of goals and interests, however, because sales and the limited half-life of products dominate. Sustainability in production and the circular economy will have a hard time without regulation. These are the dilemmas confronting us today. We must become aware of them and change them across society as a whole, and this can be achieved solely through strict regulations.

Thank you for the interview!

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