Four transitions are creating a pivotal moment in the history of humanity: demographics, markets, governance, and environment.
Demographic Trends: Urbanization in Asia and Africa, Redevelopment in the West. Urbanization is a defining feature of humanity’s development trajectory: in 1800 less than 10% of people lived in urban areas, in 2000 it was 50%, by 2050 it will be closer to 75%. Asia has been urbanizing more rapidly than anywhere else for several decades, making the region home to almost half of all the world’s city dwellers. As world population increases to nearly 10 billion people by 2050—essentially adding another China and several USAs between now and then—most of the new people will live in an Asian city. In response to these pressures and opportunities, cities will double in size by 2050, adding 400,000 square kilometers of infrastructure: an almost unimaginable amount of utilities, roads, roofs, and markets. It took humanity until the year 2000 to build up 400,000 square kilometers of urban area. We will add that much again in the next 40 years. Almost as much existing urban area will be redeveloped; for example, over 40 percent of “urban” areas in the United States will be redeveloped by 2030. Think of the opportunity to get things right: cities are major drivers of resource use and economic development. How can they also be drivers of “sustainable” development?
Market Transformations: More Sustainable Consumption. By 2050, the global economy will likely be 4-times larger than today, dramatically reducing poverty and malnutrition, and ushering billions into a connected, empowered, global middle class. The opportunities and challenges for businesses are immense. Enticingly, the addition of billions of wealthy consumers creates countless new business opportunities. On the other hand, the additional demands placed on natural resources and systems will strain already stressed ecosystems services, especially water and climate. The consequent scarcities and fragilities create risks for business operations, risks that businesses are developing management capacities to address. A host of business motivations exist for sustainable consumption practices. Risk management is one motivation and risk factors are mounting as we move towards 2050.[1] Climate change increases the frequency of damaging frosts, 100-year floods, and similarly events disruptive to business operations.[2] Social media interconnectivity and a 24-hour news cycle can create brand damaging public relations fiascos if a company finds itself on the wrong side of an environmental disaster, threat to public health, or labor practices deemed unfair. Investors and insurers are increasingly cautious of risky and unsustainable practices.[3] Better employee recruitment and retention provides another motive for businesses to align themselves with the sustainable consumption strategy. Employees consider a company’s sustainability efforts during the job search, so businesses with meaningful CSR programs attract higher quality employees. As importantly, meaningful CSR programs affect long-term retention of great employees. Companies simply cannot afford to ignore or lose parts of the workforce.[4] Finally, there is polling evidence suggesting that a small but significant percentage of consumers will buy “green” products if the item is of comparable price and quality to alternatives. Hence, sustainable consumption may provide a marketing advantage for some businesses.
Governance Transitions: Collaboration, Partnerships and Networks. The challenges of 2050 are larger and different than 20th Century institutions can solve. Government fiscal resources are curtailed, as is its moral authority. Laws and policies, still effectively solving end-of-pipe environmental problems such as emission of toxic chemicals, are less effective at non-point, globally distributed challenges such as climate. New strategies, innovations, and institutional arrangements are needed. Cross-sector collaboration–partnerships among business, government, and civil society institutions—is required to solve 21st Century challenges. Institutions from each sector bring unique resources and moral authority to problems none of them can solve alone.
Environmental Changes: The Anthropocene. Through continued industrialization, modernization, and globalization, the biosphere will be undeniably humanized by 2050. Humanity must accept the moral responsibility of being the biosphere’s steward. Capacity must emerge to manage impaired ecosystem services. Climate change, for example, will be fully upon us, so adaptive mechanisms will need intense development. Water and other resources will be scarcer, requiring massive infrastructure investments. Agriculture productivity may more than double to feed more and more wealthy mouths. Biodiversity, fisheries, and most every planetary limit will be stressed. Sustainable development will require adaptation and management rather than conservation and preservation. While there may not be hard limits, we no doubt will learn harsh lessons by catastrophic failures of natural systems that may motivate water wars and climate migration. We will have to learn from these past mistakes to re-engineer and restore ecosystem functions that support and sustain life.