How to (not) mislead with facts
True facts can tell the wrong story. Failing to put facts and numbers into the right context misleads us and makes us pursue goals that won't achieve the desired positive impact.
Following are 5 statements from real companies and industries. All of them are completely true and sound very promising. Maybe they’re even similar to some statements you’ve given. Can you spot anything fishy about them?
“The global share of renewable energy in the energy mix is steadily increasing.”
“We’re decreasing carbon footprint per visitor by 25% in the next 3 years.”
“We’ve improved the material efficiency of our products by 10%.”
“We now offer more organic products in our portfolio.”
“This product contains 94% natural compounds.”
If all sustainability means to you is good PR, these are great stories. But, since you’re here, I’m sure you’re better than that.
If we actually want to make our businesses and economy as a whole sustainable, we need to get very critical with facts and data. Because behind all of above statements is… no improvement in environmental impact at all. Let’s dig into it and explore why.
Statement 1: “The global share of renewable energy is steadily increasing.”
Take a look at this chart:
You can see how, throughout the course of industrial history, none of the new sources of energy actually diminished the use of existing ones. That’s because every new energy source just meant more and cheaper energy available.
So, yes - the share of renewables is going up. But that says nothing about the actual amounts. The rising share of renewables coupled with rising demand for energy just means more renewables are being added on top of existing sources, without diminishing the amount of dirty energy at all.
Statement 2: “We’re decreasing carbon footprint per visitor by 25% in the next 3 years.”
This is a goal one of my clients had in their sustainability strategy. Right next to the goal of growing the number of visitors by 12% per year.
Even without doing exact math, you can probably tell these are two directly conflicting goals that are pulling in the opposite directions. If this company achieves both goals, the effect on their cumulative emissions will be… approximately zero.
So, whenever you see the impact being normalised to some unit (product, visitor, index…), you should immediately ask what’s going on with that unit.
This is not an isolated case - in fact, it’s very common. Whenever we’re talking about efficiency, we normalise it to something. But if that something is growing, efficiency doesn’t lead to the reduction of overall impact.
That’s why betting on efficiency increase to solve the environmental crisis is a very poor bet. Especially in the face of economic growth. The hard economic pill we need to swallow is that we simply need to do less. Period. Without that, all efficiency-oriented sustainability strategies are, pardon my French, pure horse shit.
Statement 3: “We’ve improved the material efficiency of our products by 10%.”
Same case as the previous one, applied to material resources.
Building up one the case against pursuing efficiency as the main sustainability strategy, let’s mention another very important phenomenon that was observed already very early in the industrial age. It’s called the Jevons paradox, closely related to the economic term rebound effect.
This occurs when the increased efficiency leads, counterintuitively, to an increase in resource use. But this is not so counterintuitive once you put those efficiency gains in the broader economic context. Increased efficiency means lower cost of the resource, enabling more growth in production and consumption, which ultimately offsets the resource efficiency gains.
This was observed as early as 1865 by the English economist William Stanley Jevons in the case of coal consumption.
The scope of validity of Jevons paradox is still a topic of discussion, but a strong case for it can be made just by looking at history - we’ve been making efficiency gains (big ones too) since the beginning of the industrial revolution, but our consumption has been growing exponentially the whole time.
Statement 4: “We now offer more organic products in our portfolio.”
This statement has a very similar underlying dynamic as the first one, which is - saying you have more organic products doesn’t mean you have less of the shitty ones. And phasing out the shitty ones is what really matters.
Again, we can look at the big picture trends, such as the use of pesticides (meaning, non-organic food production).
In spite of rapidly growing organic food markets, the non-organic ones show no signs of slowing down.
Without simultaneously banning non-organic products from your offering, the addition of organic ones doesn’t make you any more sustainable. It’s just a diversification, opening another channel of customers without diminishing the demand for the existing ones.
Statement 5: “This product contains 94% natural compounds.”
This kind of statement should immediately raise alarm bells in your head. Ignoring the fact that the phrase “natural compounds” itself is very vague and can mean a lot of things, let’s focus only on the “94%”.
Our atmosphere is 99,96% non-CO2. And yet it’s the 0,04% that matters.
Beer contains 94% water. And yet it gets you drunk.
Get the gist?
The well known saying “Poison is in small bottles” is quite literally valid here. Harmful effects can come from very small quantities and waging percentages of how much of each compound is in there makes absolutely no sense at all.
This statement is so misleading because it only points out one side without any information on how harmful the other side is.
What can we learn from all this?
In order to pursue goals that do lead to overall improvement, always be sure to do the following:
Tie your goals to absolute values, not normalised values or percentages only.
Play through scenarios - how will achieving this goal affect the overall situation, given all the other variables.
Understand how the rebound effect and Jevons paradox apply to you.
Explore the context of the data you receive and use in your projections and goals.
When phasing in a better alternative, also ensure the phase out of the old one.
Let me know if you would like to see a more detailed follow up on any of the mentioned topics.
Stay bright,
Ram