This article explores why it is so crucial for businesses to invest in sustainable development and address sustainability changes.
Sustainable development is a crucial step toward progress for businesses to make. In 2005, an article was published in the journal Environment: Science and Policy for Sustainable Development, in which an encapsulating definition of sustainable development was written. The term was described as: “A development which includes human and social development beyond economics and the environment, requiring the participation of diverse stakeholders with different ideals and goals towards action to achieve multiple values, and promoting local and global efforts to reach a sustainable world”. In order for the human race to reach a sustainable world, society and the environment need the power and knowledge that businesses possess.
Since Thomas Malthus introduced his Theory of Population in the 18th century, it has been widely accepted that the human population is growing much too quickly, exploiting too many resources and that both individuals and industry must change immediately if current and future generations are going to survive on this planet. The temperature of the Earth has continued to increase exponentially and the number of undernourished citizens in the world has continued to rise as well. In 2012, the United Nations Food & Agriculture Organization approximated that about 795 million of the 7.3 billion people on the planet were undernourished. Out of those same 795 million, 780 were living in developing countries and 11 million were living in developed countries. These numbers have only grown over the years, with an increase from 2012-2014 of 10 million people, and since 2014, approximately 60 million more people were considered to be undernourished. As well, all of this was before the outbreak of the COVID-19 pandemic. Preliminary assessments based on the latest available global economic data suggest that the pandemic may add an additional 83 to 132 million people to the total number of undernourished individuals in the world in 2020 – depending on the economic growth scenario. The expected recovery in 2021 would bring this number down, but still, it would be above the projected scenario without the pandemic.
As for the Earth’s temperature, from January to June of 2016, each month a record was set as the warmest correlating month in the modern temperature record (which dates back to 1880), according to NASA. The planet has suffered and continues to suffer from the overuse of its resources, the pollution being released into its air and water, the damaging effects of extracting resources, and so many other unsustainable practices. The people who carry out these practices continue to put the economy, or their economic gain, ahead of the well-being of the communities they operate in and the future of the planet. However, the aspect that continues to be the hardest on the planet is the businesses that choose to avoid the problems of the environment and society.
In 2015, the UN and a few leaders in the business field spearheaded a task force titled the Global Commission on Business & Sustainable Development (GCBSD). The GCBSD created a list of 17 sustainable development goals they wanted to be met by the year 2030; goals which involve overcoming large-scale issues such as poverty, environmental degradation, and inequality. These were called the Sustainable Development Goals (SDGs). Unilever’s chief executive, Paul Polman, was one of the business leaders who aided the UN in creating the GCBSD and the SDGs. “We have an opportunity to unlock trillions of dollars through new markets, investments, and innovation – but to do so, we must challenge our current practices and address poverty, inequality, and environmental challenges,” said Polman in a statement. “Every business will benefit from operating in a more equitable, resilient world if we achieve the SDGs.”
The hope of the GCBSD is to demonstrate how implementing new business models, including the SDGs, can align profit with social aspirations and illustrate the considerable economic rewards to be gained from investing in SDG initiatives. Another member of the GCBSD, former UN deputy secretary general Mark Malloch-Brown stated, ” A massive prize awaits business if it successfully ushers in an era of shared prosperity and increased sustainability. Governments and international organizations alone cannot build the future we need. Business is key to accelerating the transition.”
The GCBSD has also made it so that the SDGs are adopted, companies which engage are able to gain countless benefits; more specifically, governments, NGOs, and numerous others involved are willing to invest in projects supporting the goals. For instance, the Government of Canada had a Sustainable Development Goals Funding Program that closed in November 2019. The program offered organizations interested in receiving up to $100,000 in grant funding from the SDG Funding Program for projects that were up to 12 months in duration. By participating in the SDG process, various business opportunities will be created relating to anything from market expansion to sustainability initiatives for firms.
The GCBSD and their SDGs have created a win-win scenario for businesses, environmentalists, the planet, and the entirety of the human race – if they can get businesses to comply. Businesses have the opportunity to gain funding, new networks and relationships, a positive appearance, and to become beneficial members of the community in which they operate. It is the responsibility of each of the world’s inhabitants to do what they can to improve the state of the planet, and firms aren’t exempt from that responsibility. Firms are made up of people who are also inhabitants of the Earth and ultimately, what impacts the environment and society will inevitably impact businesses as well.
It is important for businesses to address sustainability issues because these issues that businesses face are very similar to the ones the environment and society face as well. The sustainability issues that generally impact businesses include:
- Environmental change on business viability (e.g., climate change or loss of biodiversity)
- Policy inconsistencies (e.g., changes made from one political party to the next)
- Stranded assets (e.g., the risk that fossil fuel reserves will have to stay in the ground)
- Losing the social license to operate (e.g., due to unsolved social problems)
Issues of inconsistency in areas such as politics and access to environmental resources impact businesses, the environment, and society. For instance, if there were a civil war within a country, then businesses would likely have a difficult time obtaining a social license or a resource they may need from within the country for the product or service their company offers. This same civil war would also impact the country’s citizens who are unable to seek refuge in a safer country, to go to school, or who have lost their homes and belongings to bombings or raids from their government leaders or rebel forces. As well, the environment may be damaged during the war due to instances such as harmful materials entering the Earth from weapon manufacturing or bombings, and natural necessities like crops or trees may be damaged. Due to this fact, if businesses choose to help solve issues that only impact them, the aid from businesses – even if only out of self-interest – would still make a huge impact on society and the environment.
If firms want to succeed, they must look outside of themselves and their desire for growth and wealth, because without environmental resources and a stable society – there will be no economy. Therefore, it is in the best interest of businesses to allocate some of their resources toward sustainable development initiatives. By incorporating the SDGs into their business plan, a firm can help themselves, their community, and their country at the same time. A firm implementing these initiatives, even for purely selfish reasons, can still ensure the economy continues to make them wealthy, the environment continues to provide them with resources, and society will still be able to purchase their products or services. Businesses should want to support sustainability challenges within their countries and around the world because issues of the environment are ultimately issues of firms because dire environmental impacts cause issues with the economy and the planet as a whole. What we all must remember is that without the economy, the environment would survive – but without the environment – the economy surely would not.