Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This concept has received a growing recognition, but it is a new idea for many businesses. Businesses can collaborate for the sustainable development through economic growth, ecological balance and social progress. This article will pay a greater emphasis on what businesses are doing to contribute to sustainable development and how they are delivering the contributions.

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This concept has received growing recognition, but it is a new idea for many businesses. Even though, there are certain challengers faced by businesses when playing their role in sustainable development. Therefore, it is important to consider the significant circumstances. In business view point, the concept of sustainable development is built on three pillars:

  • Economic growth,
  • Ecological balance
  • Social progress

These items have always been on the sustainability agenda and businesses have also been responding to the above three pillars. But simply, the third – the social pillar – has received less attention until recently. That is changing: far greater emphasis is being placed now on social progress, and specifically on what business is doing to contribute to sustainable development, and how it is delivering its contribution. This has opened up a raft of issues. One is globalization with a human face. Opening up world markets has, without doubt, created unprecedented global economic growth – with the promise of even more prosperity. Unfortunately, the benefits of this have not been shared equally across the globe. This is leading, understandably, to some questioning about the role and function of free markets.

Though, businesses are now actively responding to social changes and pressures. The difference now, as the emphasis is put more on the social pillar of sustainable development, is that corporate social responsibility has become an institutionalized element in the debate about what civil society expects from businesses. Moreover, transparency and accountability are further challenges encountered by businesses on the way there contribution to sustainable development. “Everyone knows everything about you all the time” in today’s information-driven, globalised world. The management of reputation thus becomes a central element in running a corporation, and this involves communicating, explicitly, the values and principles on which companies base their operations and, centrally, how they live up to those values and principles. Corporations face increasingly intense scrutiny: to contend with this, they will have to enforce a set of globalised corporate values throughout their operations.

Clearly, business believes in free and open markets, but markets must work for everyone. It is important to engage in a process of developing a ‘Global Compact’ between the development communities and businesses to promote a shared set of core values. The aim should be to underpin globalization and free, open markets with stable societies and a fair distribution of the benefits. Through the power of collective action, the Global Compact seeks to promote responsible corporate citizenship so that businesses can be part of the solution to the challenges of globalization. In this way, the private sector – in partnership with other social actors can help to realize a more sustainable and inclusive development.

Today, there is a general acceptance that the world is tri polar with governments, businesses and civil societies. The challenge, of course, is how these three component parts can interact constructively to find solutions to the challenges of sustainable development. On the contrary, if tri polar governance is to work, all three key players – government, civil society and business have to abandon old, out-dated antagonisms, forge new alliances, and co-operate together as partners to find and implement workable and sustainable solutions. Civil society has matured, at a time when governments have been weakened. This means that important decisions affecting society can no longer be pushed through without wide consultations with stakeholders. Meanwhile, the role of business in sustainable development has strengthened as well: the more so when, in many parts of the world, governments retreat from their once wide-ranging role and the private sector is asked to step into the breach. As a consequence, business today is expected to produce results in areas previously the undisputed remit of governments. Overall, the societies have to engage in partnerships to find solutions together with other stakeholders.

Another major item in the business world for sustainable development is innovation and technology. Many people are suspicious of new technologies. Yet, new technologies will be a key contribution to sustainable development everywhere. Industry has the innovation and creativity to bring new technologies to the market, and is already engaged in large-scale technology transfer and cooperation with various countries. This is particularly important to help these nations ‘leap frog’ environmentally damaging manufacturing processes, develop the necessary skills, and introduce innovation into the marketplace. Another area where technology is key is climate change. We have entered in to a new era, a carbon-constrained world in which carbon emissions will carry a cost. Obviously, the issues at stake are very different in the developed and developing world, and responses depend upon each country’s individual circumstances and requirements. Yet one thing is sure: the flexible mechanisms, in particular the Clean Development Mechanism, need to be made operational if the targets are to be met.

 

All in all therefore, businesses have much to do to contribute to sustainable development, including engaging in areas within which it previously did not concern or involve itself. In fact, the redrawing of boundaries and the redistribution of roles and responsibilities within the new tripartite world have created two sustainable agendas for businesses.

One remains the business agenda: what companies need to continue to do in their everyday operations to become eco-efficient, to reduce environmental impact and create more value with reduced impact – in short, to “do more with less”. It focuses over businesses on how to marry economic efficiency with environmental excellence to ensure continued economic growth, while consuming the world’s resources and protecting its environment in a way that do not compromise the needs of future generations. Many companies are today well advanced towards eco-efficiency, and it has also become a widely accepted policy concepts.
Of course, more in businesses need to adopt eco-efficiency, not only the multinationals based in the industrialized countries but also small and medium enterprises in all sectors in all countries. Pushing eco-efficiency further and faster within the whole business community remains of the utmost importance. Corporations cannot be managed on the basis of philanthropic arguments: they must be able to demonstrate that sustainable development is good business.

The second one is the political agenda set and steered largely by forces from outside the business sector, focused on the framework conditions within which businesses must work, and increasingly driven by what governments and civil societies now expect from businesses. At the moment, the striking feature of the global drive towards sustainable development has important implications and possesses new challenges for businesses. Therefore, it is important to make considerations to build an understanding of where and how businesses can best contribute to sustainable development.

Objectively, the role of business in sustainable development is a theme, which currently works on four topics:

Business and sustainable local development
Businesses have substantial potential to contribute to sustainable development at the local level. But how should businesses engage with local communities and policy-makers for sustainable development goals? How can corporate social investment strategies meet community development needs? And how can multi-stakeholder partnerships and dialogue be most effective at local level? These key questions guide the work under this topic.

There is a need to catalyze learning and partnerships that can get businesses working as real ‘local development actors’, or that can see NGOs learning how to apply business skills in market settings – with the goal sustainable development at the local level.

Standards and tools for sustainable development
Getting the right standards and tools in place to support and promote responsible business practices is important. Codes of conduct, ethical management systems, and various kinds of ‘social and environmental responsibility’ standards for businesses are burgeoning. But who wins and who loses as these tools and standards hit real-world markets and impact on producers in poorer countries?
It is important to understand the implications of existing standards and tools for stakeholders based in middle and low-income countries – particularly smaller producers. There is an importance to shape standards and tools that can maximize positive business practices. It is important to do so in ways that are better attuned to sustainable development outcomes and to the concerns of stakeholders based in middle and low income countries.

Direct investments and sustainable development
Direct investments have the potential to make major positive contributions to sustainable development. But benefits that are promised at national levels are too often not matched by positive contributions to environmental protection, poverty reduction or sustainable livelihoods at the local level. It is important to find ways to strengthen positive environmental, social and economic outcomes from direct investments.

New Business Models for sustainable development
This new initiatives build a range of industries, sectors, products and supply chains. It looks at how businesses’ and enterprises’ contributions to sustainable development are affected by the business models they adopt – including how they interact with each other in procurement, sub-contracting and other direct business arrangements. It explores how private sector, civil society and government can work together to shape business models that deliver positive economic, environmental and social outcomes as well as business viability.
It is significant to reflect longstanding concerns to make sure that the interests of stakeholders have a real impact in shaping responsible business practices for sustainable development. It is also important to place particular emphasis on the public policy underpinnings of responsible business practices and corporate accountabilities.

However, it is important to emphasize that sustainable development cannot be achieved by a single enterprise (or, for that matter, by the entire business community) in isolation. Objectively, sustainable development is a pervasive philosophy to which every participant in the global economy (including consumers and government) must subscribe, if we are to meet today’s needs without compromising the ability of future generations to meet their own.

Moreover, the image of businesses as contributors to sustainable development should be supported by parts of the business communities, led by major multinational companies. If sustainable development is to achieve its potential, it must be integrated into the planning and measurement systems of business enterprises. And for that to happen, the concept must be articulated in terms that are familiar to business leaders.

 

Meanwhile, the role of business in contributing to sustainable development remains indefinite. Many areas yet remain technically ambiguous, making it difficult to plan an effective course of action. Clearly, more research will be needed to resolve such technical issues.

While all business enterprises can make a contribution towards its attainment, the ability to make a difference varies by sector and organization size. By taking a principle-based approach to businesses, it will be possible to ensure that sustainable development is achieved and that the benefits of globalization are shared more widely. [/premium_content]

Tags:
About Author: lahirisirirathne