Sustainable development cannot be achieved by a single enterprise — or by the entire business community — in isolation, argues Syamal Gupta*, the chairman of Tata International. It is a pervasive philosophy to which every stakeholder in society and participant in the global economy must willingly subscribe

The earth provides enough to satisfy every man's needs, but not every man's greed — Mahatma Gandhi

Our lives are inextricably linked to our environment. With the world around us changing, the environmental challenges facing us are gaining complex dimensions. While the earth’s life forms draw their sustenance from a vast reservoir of natural resources, the burgeoning global population has been putting our fragile ecosystem under stress, and threatening to cause irreversible damage to its balance.

The world has witnessed rapid, unprecedented technological advances that have had a profound bearing on all aspects of the production of goods and services. The increased scale and reach of human activity have led to mounting pressure on not just the global commons (water, air, soil, etc), but also on local and global sinks (the ability of the biosphere to absorb waste and regulate climate).

It is feared that greenhouse gas emissions cannot be reined in unless a concerted effort is made to increase energy efficiency, reduce our current dependence on fossil fuels, and develop viable ‘clean-energy’ options. Added to this, we have seen that poverty has been a concomitant of economic development.

To put things in perspective, one needs to consider that nearly 3 billion people — almost half the world’s population — continue to live on less than $2 a day. In the next 50 years, the global population is expected to increase by 50 per cent, with a majority of them in poor countries. The challenge of meeting present and future needs is immense.

States the Living Planet Report, 2000: “If every human alive today consumed natural resources and emitted carbon dioxide at the same rate as an the average American, German or Frenchman… we would need at least another two earths…”

The core development challenge is about ensuring a better quality of life for everyone. Business, as the most potent force of wealth creation, has an essential role to play in promoting the move towards sustainable development.

Businesses need an enabling environment to operate effectively. In today’s tripartite world of government, enterprise and civil society, a key business asset will be the ability to work in creative partnerships to find solutions that, in the long term, will be seen as legitimate and fair.

The concept of sustainable development
The most widely accepted definition of this term is the one adopted by the International Commission on Environment and Development (Brundtland Commission) Report, 1987. It defines sustainable development as development that “…meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Essentially, sustainable development is built on three pillars: economic growth, ecological balance and social progress.

A healthy economy is as essential in satisfying our material and non-material needs as preserving the natural foundations of life. Society’s ability to enhance human wellbeing is, in the long run, intertwined with the choices made by individuals, companies, communities and governments on how to optimise the usage and transformation of their assets.

In this context, development in the 21st century is a multidimensional concept that encompasses five perspectives:

• Financial capital: Sound macroeconomic planning and prudent fiscal management.
• Physical capital: Infrastructure assets such as buildings, machines, roads, power plants and ports.
• Human capital: Good health and education to maintain labour markets.
• Social capital: People skills and abilities, as well as the institutions, relationships, and norms that shape the quality and quantity of a society’s social interactions.
• Natural capital: Natural resources, both commercial and non-commercial, and ecological services which provide the requirements for life, including food, water, energy, fibres, waste assimilation, climate stabilisation and other life-support services.

Given the finite resources of our planet, current practices of development cannot be sustained. The focus, hence, should be on equitable consumption of resources as much as on regeneration and recycling. In reality, this does not happen.

Although the concept of sustainable development evolved a quarter century ago, not a single country is known to have developed a comprehensive strategy to build an ‘eco-economy’; to restore carbon balances, stabilise the population and water tables, conserve forests and soil, and preserve the diversity of plant and animal life.

International initiatives
It was way back in 1972 at the Stockholm Conference that the view of the developing countries with respect to the environment was brought to the fore. Developing countries may not be major contributors to environmental evils, but the environmental tribulations faced by them are severe.

These countries account for 77.5 per cent of the world population and 32 per cent of global emissions, whereas the United States, with less than 5 per cent of the world population, alone accounts for 23 per cent of global emissions.

The Earth Summit held in 1992 at Rio de Janeiro clearly endorsed the principle that global environmental problems should be solved by consensus and through multilateral environmental cooperation. It provided an all-encompassing view of the nexus between development and environment.

The Millennium Development Goals provided a framework for poverty reduction and sustainable development efforts under the aegis of the World Bank. These goals, agreed to by over 150 heads of state and government at the UN Millennium Summit in 2000, provide the measurable targets needed to collectively measure global progress in improving living standards.

At the recently concluded World Summit on Sustainable Development in Johannesburg, the overriding theme was access to clean water, sanitation, energy and agriculture, to improve health conditions and better protect the world’s biodiversity and its ecosystems. In addition, for the first time, countries undertook commitments to increase the use of renewable energy.

The ‘clean-air initiative’ has been building consensus among government, civil society and the private sector to introduce measures for to improve air quality. The World Bank is involved in other partnerships and special initiatives, such as its alliance with the World Wildlife Fund to protect 125 million acres of highly threatened forest area around the world by 2005.

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This is an edited version of the paper, titled 'Business and sustainable development', that Mr Gupta presented at the Commonwealth Business Forum held in London in September 2002

Uploaded in December 2002