Human action is sustainable if it is rational

Author: Michal Moroz, Business Development Manager

I openly subscribe to the principles of sustainability, not in spite of my conservative views, but in view of them. In fact, I consider sustainability to be a highly conservative value. In order to explain this position, I must first define sustainability. My interpretation is seemingly simple:

sustainability = rationality

According to Wikipedia, rationality (from Latin ratio, reason and rationalis, reasonable) can be defined as the reasonableness or rationality, i.e., the ability to think, decide, and act on the basis of reason, or reasonable purposes and goals that can be defended by reasons. A brilliant definition of sustainability, don’t you think?

Human action becomes sustainable when it is guided by rational reasoning and decision-making, underpinned by based on reason, knowledge and experience. Only such action leads to achievable and, at the same time, long-term sustainable results. Whether in business, politics, civil society or our family life.

The definition of unsustainability is seemingly easy at this point. It is irrationality, that is, imperfect human behavior, where we think, decide and act based on emotions, habits, prejudices, lack of information and other “irrational” factors.

Only if we rely on proven scientific knowledge, years of practical experience of experts and reliable data, our actions can be sustainable in the long term. Especially in such complex scientific disciplines as complex as energy, ecology and climate science.

High time to learn by rational self-reflection

The problem arises especially when the authorities we tend to believe behave irrationally.
we tend to naturally trust. This is especially true for scientists or elected political representatives. However, to err is human, even educated and intelligent people are not immune to emotional pressure and manipulation.

The truly dangerous excess is therefore the deliberately irrational behaviour of authorities who are outwardly masquerading as rational. As a rule, such behaviour is motivated by personal interests, i.e.
It is motivated by the intention to gain personal benefits, be it popularity, power or money. Social danger
of such behaviour can be extremely high, especially when a minority seeking personal gain
is joined by others in good faith.

A good example of the shift from rationality to irrationality is the energiewende, the transformation programme German energy sector. Its original goal in 2010 was to provide environmentally friendly, affordable affordable and secure energy supply with a minimum of greenhouse gases. It was a goal that was undoubtedly ambitious, but otherwise broadly sympathetic.

But a year later came Fukushima and German politicians, under the influence of emotion, decided to add
to the reduction of greenhouse gas emissions (up to 95% by 2050) to the complete phase-out of nuclear power (by 2022). And it is no coincidence that they were applauded in the Kremlin. And not just applauded. Also to the Germany, which ended up with the anti-nuclear lobby there. The ambitious plan became a plan with all the hallmarks of irrationality.

Politicians actually lived up to their commitments and 12 years later shut down all of Germany’s nuclear
reactors. But the large-scale solar and wind farms are still unable to meet demand, so the missing
electricity is being generated by our western neighbours in ageing coal-fired power stations or bought
from neighbouring countries. In addition, the wind in Germany blows primarily in the north, while much of of industry remains in the south. There are not enough transmission routes and energy storage options remain very limited. All of this translates into high energy prices that reduce competitiveness
German industry.

One would expect rational self-reflection in such a situation. Instead, the German Minister of Industry
Robert Habeck complains in the media about France, which like many other EU countries is betting on nuclear and “I have no problem with the fact that France owns nuclear power plants; my problem is that a nuclear power plant operator can offer cheap prices below market value’. By market value he means German prices, distorted by emissions by allowances, green subsidies and other state regulations.

Now, why am I writing all this? Because sustainability is a topic that affects all of us. In fact, the European Union has adopted the Corporate Sustainability Reporting Directive (CSRD). Sustainability Reporting Directive). This aims to improve the availability and reliability of information on sustainability and to create a culture of transparency about the impact of companies on the environment and society. The Directive will also introduce an obligation to verify the sustainability information reported. Which
information will be determined by the recently published Sustainability Reporting Standards (ESRS).
European Sustainability Reporting Standards). They will be obliged to follow these rules the largest companies from next year.

An unwelcome European directive or a welcome impetus for strategy?

For advisers, the CSRD is an opportunity similar to the GDPR. So I’m sure you’re already being bombarded from all sides offers promising to bring you into line with European standards, set your strategy and objectives sustainability. And right here and now is the time to pay attention. Because unlike GDPR, this isn’t “just” just another annoying regulatory obligation. Your future is at stake here. Because sustainability is in this case means nothing less than the sustainability of your business model.

That’s why your strategy and goals must be rational in the first place, because their feasibility depends not only on the future profits of your shareholders, but also the jobs of your employees, the social status of your communities and the prosperity of the communities in which you operate. This is about nothing less than whether your company will be around in another ten or fifteen years, able to innovate and keep up with its local, European and international competition.

If you accept my thesis that sustainable means rational, I believe you will live far away with ESG
better off with ESG. And perhaps the introduction of an unwelcome European directive will become a welcome opportunity to escape the loop of daily operational meetings. After all, how often do you have the opportunity to stop, conceptualize to reflect and discuss with your team your company’s long-term strategy?

Whether you go it alone or bring someone in, I have a well-intentioned advice and a short self-promo. Doing things rationally means building on experience, on scientific and hard data. Which is the way I apply with my colleagues on the ORGREZ ECO team. We rely on their years of unique know-how in the field of energy and environmental protection, which we enrich with data integration and advanced analytics with Honza Huml. But the about that next time.