Sustainability has emerged as a mega business trend and is a measure of good corporate governance. It is a broad concept which ensures that we have and will continue to have the natural resources to protect human health and our environment. It tends to create a harmonized relationship between humans and nature fulfilling the requirements of both the present and the future generations.
Sustainability is being defined in Paul Hawkin’s book – The Ecology of Commerce as –
“Sustainability is an economic state where the demand placed upon the environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations.”
In the most common sense, Sustainable Development could be understood as the development which will allow all future generations to have a potential average quality of life, that is, at least as high which is being engaged by the current generation. In a more specific sense, Sustainable Development is a broad concept that balances the need for economic growth with environmental protection and social equity. The concept was first introduced by the World Commission on Environment and Development(WCED) of the United Nations in their report in 1987(popularly known as Brundtland Report). Sustainable Development indicates the development that meets the need of the present generation without impairing the ability of future generations to meet their needs.
What are the Fundamental Principles of Sustainable Development?
There are four acceptable fundamental principles of Sustainable Development agreed by the world community –
- Principle of Intergenerational Equity – This principle urges the need for the perseverance of natural resources for future generations as to maintain a balance between generations.
- Principle of Sustainable use –This principle talks about the use of natural resources in such a useful manner that it does not have a negative impact on nature.
- Principle of equitable use –According to this principle any state/country must use natural resources taking into account its impact on other states.
- Principle of Integration –As per this principle, environmental aspect and impacts of socio-economic activities should be integrated in such a manner that makes sure that natural resources are used in the most prudent manner.
Corporate Sustainability :
Corporate Sustainability can be viewed as an attempt to adapt the concept of Sustainable Development to the corporate workings, matching the goal of value creation with environmental and social considerations. It is a business approach that creates long term shareholder value by grasping the opportunities and handling the risks derived from economic, environmental and social developments. It describes business practices built around social and environmental considerations.
Corporate Sustainability is a new philosophy under which sustainable development comprising of environmental protection, social justice, equity and economic development are given more significant focus in the overall growth and development of the corporate entity. Its emphasis on strategies and practices that aims to meet the needs of stakeholders today while seeking to protect the resources that will be needed in future. Following key drivers needs to take care of to ensure a sustainable environment –
- Internal Capacity Building strength so as to transform varied risks into a competitive advantage.
- Social Impact Assessment so as to become aware of social factors.
- Repositioning capabilities through development and innovation by crystallization of all activities to ensure pertinent growth.
- Corporate Sustainability for creating shareholder value in long run.
The main contributors to economic, social and environmental well being have always been Corporates. Corporate activities are immensely crucial in the present and will have a serious bearing on the future as well. Therefore, Corporate Sustainability is imperative for long term sustainable development of the economy and society. As a good corporate citizen, a corporate needs to focus on following key aspects :
- Ethical business practices.
- Equitable business practices.
- Creating absolute value for society.
- Creating a market for all.
- Compliance with Statutes.
- Environmental Protection.
- Innovation of new technology.
- Achieving Co-efficiency.
- Corporate Social Responsibility.
Difference between Corporate Sustainability and Corporate Social Responsibility :
These two concepts are often interpreted as same but these have different backgrounds and different theoretical paths.
‘Corporate Sustainability’ is the applicability of the idea of sustainable development to the business. The notion of Corporate sustainability can be defined as the capacity of the firm to create value through the product and services it produces and to continue operating over the years.
‘Corporate Social Responsibility’ is recognized as a contribution to the objectives and values of our society. CSR can be understood as obligations of a businessman to pursue those policies, to make those decisions, or to follow those lines of action which are admirable in terms of objectives and values of our society.
Even though both these concepts have different roots but they are ultimately converged.
Sustainable Development Goals(SDGs) :
In September 2015 as part of the 70th session of the UN General Assembly, 17 Sustainable Development Goals were adopted intended to be achieved by the year 2030 by the UN member States. These are global goals designed to bring the world to several life-changing ‘zeros’, including zero poverty, hunger, AIDS and discrimination against women and girls. These goals aim to address the global challenges faced across the world. It tends to make the world a better place and more sustainable for all. These embody –
- No Poverty
- Zero Hunger
- Good health and well being
- Quality Education
- Gender Equality
- Clean water and sanitation
- Affordable and clean energy
- Decent work and economic growth
- Industry, Innovation and Infrastructure
- Reduced Inequalities
- Sustainable cities and communities
- Responsible Consumption and production
- Climate action
- Life below water
- Life on land
- Peace, Justice and Strong Institutions
- Partnership for the goals
The Corporates around the world has been tributary to SDGs that are supposed to be achieved by the year 2030. For a sustainable environment not only the Government is responsible but also the businesses are required to put forward their best efforts. India is in the rising stage as so much the reporting of SDGs is concerned. As per a Report, Companies usually tend their focus on SDG 4, SDG 5, SDG 6, SDG 8 and SDG 13.
- Ambuja Cement maps its water actions to SDG 6, SDG 11 and SDG 12 through the construction of water harvesting structures.
- TATA Steel maps its actions towards SDG 3(Good health and well being) and took an initiative to improve the sexual and reproductive health in adolescents through setting up Youth Resource Centers.
- State Bank of India took an initiative to enhance waste management activities(SDG 11, SDG 13 and SDG 17).
- Air pollution awareness generation campaign by GAIL called the ‘Hawa Badlo Campaign’.
- Integrated watershed management programme by M & M( SDG 1 and SDG 6).
In a similar manner, several companies tend to focus their activities to have a sustainable future. Companies have started noticing that investing in SDG strategies deliver value through reducing risks and decreasing operating and supply chain costs. This more interprets into improved product worth and welcoming new market opportunities for Indian businesses.
Challenges faced for attaining Sustainable Development :
The challenges for Sustainable Development are multiple and complex. India is among one of the fastest-growing economies and has to undergo the dilemma of Sustainable Development also. One of the major challenge faced by India is devising suitable indicators to effectively monitor the progress of SDGs. Financing SDGs is also a massive problem. Despite India’s best efforts to reduce poverty, it has the highest number of people living below the international poverty line. Another significant challenge in implementing SDGs would be with respect to ownership. The Indian Government also face difficulty in measuring the progress of SDGs.
While India stands at a crossroad today as respect to achieving sustainable development, there are various measures to overcome the challenges faced by it. India should work towards developing an exclusive model for implementing, monitoring, measuring and reporting SDG related course of action. It should have well-planned policies to set up smart cities, construction of roads, railways and other infrastructure projects. It should make efforts to eradicate poverty, have safe drinking water, responsible consumption and production and likewise. Businesses should make their proper contribution and help in attaining a sustainable future for all.
Sustainability Reporting :
The concept of Sustainability Reporting is quite a recent phenomenon. It is a process of revealing publicly an organization’s economic, environmental and social performance. Several companies realize that financial reporting no longer satisfies the needs of shareholders, customers, communities and other stakeholders for information about overall organizational performance. Sustainability Reporting helps organizations present their report on the progress of non-financial aspects and environmental concerns. A Sustainability Report is the key platform for communicating sustainability performance and impacts- whether positive or negative.
It is crucial for leading Indian businesses to function as modification agents and encourage their peers to adopt and regularize Sustainability in their operating environment and leverage on the opportunities through appropriate corporate strategy. To be successful, companies will now need to set goals in line with SDGs establishing responsibilities, upheld by business metrics. This new concept is catching up fast and will lead towards driving new business behaviours towards holistic sustainable development.