Management of Sustainability

The following is a list of considerations - economic, technological, environmental, socio-cultural and political - that businesses need to take into account in the management of sustainability:

Economic Considerations

 |  Economic  |  Technological  |  Environmental  |  Socio-Cultural  |  Political  | 

Quantity to Quality
Traditionally, economic progress has been measured in terms of the quantity of economic activity (GDP) and the size of the economy. In a sustainable world, the key issue is the quality of economic activity, the extent to which it meets real needs, and whether it respects ecological limits. At a product level, quality refers to durability, reparability and upgradability. The challenge for companies is to combine increasingly rapid technology cycles with longer product life cycles.

Sustainable lifestyles, whether in the North or South, will require the execution of a huge range of eco-infrastructure projects, from state of the art sewage treatment to user-friendly mass transit systems. The extent to which the activities of companies and governments contribute to this end is an important measure of their sustainability.

Human Capital
In a knowledge-based economy, human capital is the key to success. For sustainability, the challenge is education and training that meet environmental priorities while simultaneously developing creative and highly-skilled employees that will be vital in the years ahead.

Reduce Economic Waste
Since environmental progress is financed by economic growth, it is desirable to reduce the economic wastage and distorting market signals in markets, ranging from agriculture to energy markets. Protectionist trade policies and monopolistic practices can also contribute to inefficiency and thereby reduce sustainability.

Integrate Environment
In most companies and governments, economic factors are given much higher priority than environmental factors. Sustainability will require the integration of social and environmental factors into economic decision making. This will have to become a central issue for corporate boards, financial markets and government economic ministries. Since the basic mechanism by which capital moves through the modern economy is the investment process, sustainability also requires that all investment decisions (including those related to personal savings or corporate pension funds) should be based on criteria of sustainability. Companies will need to provide information about the business impact of their environmental investments and performance, so that these decisions can be made, and SMAS becomes a true market instrument.

Fair Trade
Many of the poorest countries are also those with the worst environmental and health conditions. Yet they only receive a tiny fraction of the profits from the products they harvest or produce, and which are sold in richer countries. A regime of fair trade, in which more money goes directly to producers in developing countries, can foster change.

Global Standards
Multinational companies typically have production facilities in many parts of the world. In such cases, they can help transfer sustainable technologies, processes and management practices by operating with single global standards for environment, health and safety. Investment in a country on the basis of its having lower standards does not contribute to sustainability.

Getting the Prices Right
Market prices do not currently take account of so-called 'externalities' due to environmental and social impacts. If the market is to guide progress towards sustainability, it will be necessary to internalise externalities and make prices tell the social and ecological 'truth'. Policies such as ecological tax reform are relevant in this respect. From a corporate perspective, companies seeking sustainability should price environmentally-sound products at less than the equivalent unsustainable products, rather than seeking to extract a 'green premium' from consumers as is the case today.

Some Indicators:

  • Increase product life-cycle: durability, recyclability, re-usability
  • Develop and sell only products that meet real needs
  • Invest in eco-infrastructure
  • Invest in human capital: education and training for sustainability
  • Remove distorting subsidies and unsustainable market signals
  • Remove protectionist barriers that slow environmental progress
  • Investing in eco-infrastructure
  • Integrate environment into all business decisions
  • Environmentally -based investment strategies
  • Provide market-relevant information on environmental performance
  • Engage in fair trade
  • Operate using single global standards
  • Set prices that 'tell the ecological and social truth': greener is cheaper

Technological Considerations

 |  Economic  |  Technological  |  Environmental  |  Socio-Cultural  |  Political  | 

Dematerialisation & Eco-efficiency
It has been variously estimated that in order to attain sustainability, the ratio of value added to environmental impacts (whether in terms of resources and energy used or waste generated) will have to increase by a factor of between four and ten. In other words, there will need to be dematerialisation of production of between 75% and 90%.

Sustainable Technology
Technologies, including those in transport, energy and industrial production, will need to become sustainable. The ideal sustainable process would use only renewable resources and energy and would produce no toxic or non-biodegradable wastes. Closed loop production, increased recycling and remanufacturing, and industrial ecology are promising examples of progress in this direction. More generally, life-cycle thinking will be at the heart of sustainable technologies.

Appropriate Technology
As persistent mass unemployment continues to erode the social fabric in many economies, the importance of employment generation for sustainability is becoming more evident. In this context, the promotion of appropriate technologies is relevant. Such technologies are not only environmentally compatible, but also emphasise the substitution of labour for capital, thus helping to reintegrate people into the economy.

Innovation & Information Economy
In addition to radically increasing the eco-productivity of existing products and processes, new technologies, notably those based on information technology, provide entirely new possibilities for developing more sustainable lifestyles. For example, video-conferencing allows people to conduct meetings from home, reducing travel with all its associated impacts. A sustainable economy is likely to want to make full use of these energy and resource savings technologies.

Some Indicators:

  • Dematerialisation: towards factor 4 & factor 10
  • Sustainable processes and technologies based on renewable resources and energy, producing only biodegradable by-products
  • Closed-loop production, industrial ecology, life-cycle design
  • Appropriate technologies: substitute labour for capital
  • Information technologies to substitute for material and physical

Environmental Considerations

 |  Economic  |  Technological  |  Environmental  |  Socio-Cultural  |  Political  | 

Renewable Resources
Although the threat of 'running out of resources' is not as urgent as it seemed in the 1970s, we are still living off nature's 'capital' rather than its 'interest'. Non-renewable resources are being squandered and even renewable resources, such as agricultural lands or tropical forests, are suffering lasting damage for the sake of short-term gains. These trends must be halted in order to attain sustainability.

Preserve Biodiversity
The extent of biodiversity and its role in underpinning the resilience of life on Earth are poorly understood. A precautionary approach in the face of such vast complexity is called for. Similarly, the introduction of new genetically modified organisms into ecosystems and the use of biotechnology must be carefully regulated.

Stay within Sink Limits
The most serious environmental problems of the coming century will be those based on our exceeding 'sink' limits, or the capacity of ecosystems to absorb the wastes generated by human activities. For example, at a local level, air and water quality are already suffering, and global emissions of carbon dioxide may cause serious damage through global warming if we exceed the absorptive capacity of the biosphere. Here as for all environmental criteria, staying within 'environmental space' is of key importance.

Some Indicators:

  • Minimise use of non-renewable resources; use renewables sustainably
  • Preserve biodiversity and carefully control use of biotechnology
  • Stay within 'sink' limits and environmental space, locally and globally

Social-Cultural Considerations

 |  Economic  |  Technological  |  Environmental  |  Socio-Cultural  |  Political  | 

Preserve Diversity
Sustainability is not only about preserving environmental assets, but also social and cultural ones. The global diversity of cultures, languages, religions and lifestyles is currently under threat, which risks reducing the resilience of socio-cultural systems and their ability to develop creative responses to the challenges posed by sustainability.

Meet Basic Needs
In many parts of the developing world, and small pockets in the developed world, basic needs for food, shelter, health care and education are not being met. Poverty is still a fundamental source of unsustainability wherever it is present. Sustainability means meeting basic needs and tackling poverty.

Although ecological sustainability does not necessarily require equity, sustainability in the full sense including social and economic aspects does. It is hard to imagine that a society with massive inequality could be politically sustainable. Similarly, sustainability means improving equity and equality in addressing the rich-poor gaps within nations and between them, especially North-South, but also in intergenerational terms. At a corporate level, the incongruity between remuneration at the top and bottom of corporations is evidence of greed and inequity, and contributes to social divisions and unsustainability.

Access to Opportunity
Equity is not simply a matter of outcomes, but of access to opportunity. Inequalities of opportunity can arise through differences in education, training, availability of capital or financial assistance, access to infrastructure and technological know-how. A sustainable world would be one in which citizens are given equal access to opportunity.

The importance of full and fair access to employment has already been mentioned. Sustainable employment need not mean keeping the same job for life, but would mean breaking the existing cycle of chronic, long-term unemployment and obsolescence.

Sustainable Consumption
Consumption patterns will need to focus much more directly on quality of life rather than standard of living. Even in the last two decades of economic growth, quality of life for many if not most people in the developed world has been static or declining, although the top 10-20% are becoming much better off in every sense. Sustainable consumption will need to respect environmental, social and ethical norms, while meeting real needs for food, housing, transport, education, entertainment and fulfilment. Companies can address these issues through their policies in areas such as company cars, canteens and buildings.

Some Indicators:

  • Preserve social and cultural diversity. Foster tolerance
  • Meet basic needs and seek to eliminate poverty
  • Improve equity within and between nations and organisations
  • Improve equality of access to opportunities, especially education
  • Ensure access to employment
  • Marketing and education to promote sustainable lifestyles
  • Develop sustainable patterns of consumption

Political Considerations

 |  Economic  |  Technological  |  Environmental  |  Socio-Cultural  |  Political  | 

New Institutions
Many political processes are still remarkably closed and unparticipatory, resulting in a fatalistic and disaffected electorate. New institutions are needed to engage and involve citizens in developing a sense of ownership and responsibility for creating sustainable societies. Greater participation is also needed in the way that companies interact with stakeholders, including employees and unions.

Transparency and free flow of information is at the heart of an open and democratic society. Today, however, decision processes are all too often impenetrable, the environmental and social performance of companies and public authorities is hard to obtain or interpret, and consumers do not have the necessary information to make product choices in favour of sustainability. Transparency in all these areas will need to be improved. This is likely to be a central role of SMAS.

Gender & Racial Equality
Despite many decades of the civil rights movement and increasing acceptance of the need for gender and racial equality, inequalities persist. Since inequalities mean that people are denied access to work, community, and other basic needs, they are not compatible with a vision of sustainability that seeks to ensure that the needs of all people are met.

Visions of Sustainability
To achieve progress towards sustainability, it will be necessary to develop compelling visions of a sustainable word, which should in turn be seen as realistic, feasible, inclusive and desirable if they are to command public support and enthusiasm.

New Sets of Values
The new types of consumption patterns and behaviours needed for sustainability will need to be based on a new set of values. Similarly, democratically elected governments cannot introduce policies for sustainability that are not supported by society, and companies cannot profitably introduce sustainable products unless consumers will buy them. All these changes require a shift to a new set of values. Although such changes are a matter for individuals, companies can foster them by ensuring that their advertising, marketing, and products are consistent with sustainable lifestyle choices.

Some Indicators:

  • Open and participatory political institutions
  • Involving stakeholders in decision-making
  • Transparency and full information on all activities and products
  • End discrimination on racial, gender and other grounds
  • Develop visions of sustainability to catalyse change
  • Foster development of sustainability-oriented values

Source: EU - European Sustainable Trade Forum
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Contact: Hari Srinivas -