Developing Ideas Digest May/June 1998
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Big Business Meets 'SD'

As corporations grapple with the implications of sustainable development, a few are more closely examining the impacts of their operations on people and the planet. They are reconsidering their relationships with and obligations to the communities where they operate and re-engineering aspects of their operations with a view to economic, environmental and social sustainability. The reason for this shift in emphasis was starkly presented at a recent conference by businessman Ray Anderson -- chairman of the international Interface Corporation (they operate in more than 110 countries) and co-chair of the U.S. President's Council on Sustainable Development. While describing himself as "a captain of industry, a kind of modern day hero" by current standards, his purpose was not to gloat. History will judge his kind much more harshly, Anderson said, since "our company's technology, and that of every other company that I know of in its present form, is plundering the Earth... There is not an industrial company on Earth that is sustainable in the sense of meeting its needs without depriving future generations of the means of meeting their needs... ". His language may be stronger than most of his cohorts, but his basic point is one that many business leaders now accept: social values are being profoundly transformed, and companies had better change in order to accommodate the new public expectations.

Part of the equation, as Anderson warned, is the threat of a citizen backlash against business. But many business leaders also see new markets and opportunities in the shift to sustainability. A recent Arthur D. Little survey (see In Depth) had 83 per cent of executives surveyed agreeing that sustainable development initiatives can create real business value and economic growth. Current practice, however, lags well behind that sentiment, with just 17% of respondents believing that sustainability concerns had been embedded in their companies' business plans. Still, past experience gives some cause for optimism. According to author Carl Frankel, industry's past response to a rising environmental consciousness came in three phases. The 'era of compliance' - when business sought to keep up with a flood of new laws - gave way, in the wake of the Bhopal chemical disaster, to a "beyond compliance" corporate strategy. Pro-active in-house environmental programs and experiments with community consultation, in part to rebuild industry's shattered reputation marked this second stage. Next, an era of 'eco-efficiency' focussed on minimizing resource inputs as well as pollution outputs and "[streamlining] the full range of corporate metabolic processes." Now, a few companies are seriously tackling the less tangible aspects of sustainability such as equity and community well-being.

Some new tools have been developed - related to full cost accounting and performance measurement - which can help companies in those tasks. But in some respects, this is new, uncharted ground. The social equity component of 'sd' (that is, the requirement for a fair and just distribution of resources) can be particularly difficult for companies which have previously believed their sole task is money-making and their sole obligation is to shareholders. But small steps have been taken, as we see in the following pages, in specific areas such as community consultation, sustainability training, resource use and corporate reporting. These initiatives may not yet add up to a coherent whole; but there is a reasonable expectation that this may happen as the process unfolds. As the U.S. National Academy of Science conceives of it, the journey towards sustainable development is akin to paddling a canoe through rapids - a metaphor that speaks to both the nature of the process and to its difficulty. [business grapples with sustainable development]

eco-efficiency n. the delivery of economically valuable goods and services while reducing the ecological impacts of production

Frankel, Carl. In Earth's Company: Business, Environment and the Challenge of Sustainability. Gabriola Island, BC: New Society Publishers, 1998. 223 p.

Arthur D. Little. 'Sustainable Development and Business Survey'. Internet. http://www.arthurdlittle.com/services/services.html
Click on 'Thought Leadership'

Virtual Ideas

IISD's Business & Sustainable Development site http://iisd.ca/business/default.htm

World Business Council on Sustainable Development http://www.wbcsd.ch