Chapter 1: introduction
Sustainability is the capacity to support, maintain, or endure; it can indicate both a goals and a
process. Sustainability has come to be linked with the environment and a better way to structure our
societies, companies, and our daily lives in order to protect the long-term future of our planet and
the ability of future generations to thrive. Social sustainability: often conceived in terms of
sustaining the well-being of people. Environmental sustainability: refers to sustaining nature or
natural resources. The two are intricately interlinked, due to the fact that human welfare depend on
the sustainability of the environment.
The Club of Rome, an influential think tank that brings together the world’s leading scientists and
politicians, has produced The Limits to Growth report. The report demonstrated that an economy
built on the continuous expansion of population, resulting from fewer deaths due to lower child
mortality and longer lifespans, as well as increase in material demand, in fundamentally
unsustainable.
Sustainability has been re-defined as the integration of the environmental, economic and social
dimensions. In business, these objectives came to be known as the triple P- People,Planet and Profit.
Environmental Kuznets Curve (EKC) assumes that during early industrialization, economies use
material resources more intensively until a threshold is reached after which materials are used more
efficiently and thus less intensely. EKC assumes that economic growth and technological
development will reduce environmental degradation.
Rather than seeing the environment as one of three equal pillars of the triple bottom line, it is a
foundation upon which society and profit are dependent. Without the healthy planet, no social or
economic system can be sustained.
A Business can be described as a commercial enterprise, company or firm involved in the trade of
products and services to customers for profit. Businesses are predominant in capitalist economies
and are usually privately owned; in socialist economies businesses are more frequently state-owned.
Businesses may also be operated as not-for-profit enterprises.
Increased awareness has encouraged and empowered civil society to play a more active role in the
regulatory process, and motivated MNCs to increase transparency by including relevant details in
their public reporting on their operations.
The earth Summit in 1992 set a precedent and established a framework for conventions that were to
focus on climate change and biodiversity, identifying basic aims, principles, norms, institutions, and
procedures for action. MNCs presented themselves as part of the solution rather than the problem.
Being sustainable can be good public relations (PR).
Green-washing describes an individual or business promoting something as sustainable – either
business as a whole or an initiative, product or activity while actually continuing to operate in socially
and environmentally damaging ways.
Significantly, being sustainable makes obvious commercial sense, with improved energy efficiency
and waste management strategies enabling companies to save billions on their bills.
Some businesses choose to be sustainable in order to prevent government intervention or policies
that might restrict their operations.
,Social sustainability refers to issues concerned with social equality, poverty and problems associated
with justice. Economic sustainability: is linked to well-being in relation to financial indicators such as
GDP and is characterized by underlying economic approaches to the range of social issues attempting
to capture the values embedded in human and natural capital.
It is often assumed that economic growth is the key component of poverty reduction. Overall,
economic growth is believed to improve people’s quality of life by increasing expenditure on
healthcare, education, and public services. However, critics have noted that the relationship between
economic growth and global employment is weakening. In fact, economic growth may be increasing
in countries where redistributive policies are few and inequalities are already high. There may be a
reduction in absolute poverty, but also a lessening of global employment and income equality over
time. While inclusive economic growth is advocated as a solution to income equality, some
economists who think in the long term advocate ‘degrowth’ or steady-state economy.
Climate change is one of the largest challenges we face. The primary international body for
monitoring and promoting action to address climate change is the Intergovernmental Panel on
Climate Change (IPCC). Recent IPCC reports state that GHG concentrations have increased due to
human activity. The main driver of change in corporate strategy was the adoption of the Kyoto
Protocol in 1997.
Eco-efficiency refers to the idea of doing more with less. ’The efficiency with which ecological
resources are used to meet human needs’ and represents it as a ratio of output divides by the input.
However, despite good intentions, efficient use of resources still supports the endless spiral of
production and consumption.
The rebound effect ( or Jevons paradox) is a consumer response to the introduction of new eco-
efficient technologies. Eco-efficiency tends to offset the beneficial effects by actually increasing
consumption of the supposedly guilt-free products.
Cradle to Cradle (C2C) supports and endless cycle of material regeneration where nothing gets
wasted, in stead of the cradle to grave concept.
Eco-effectiveness supports an endless cycle of material exchanges. It focuses on the development of
products and industrial systems that maintain or enhance the quality and productivity of materials
rather than depleting them.
The World Economic Forum Report noted the paradox that: On the one hand, globalization in recent
decades has helped to lift hundreds of millions out of poverty. But on the other hand, the ever-
increasing extraction of resources and economic activity has placed increasingly unsustainable
pressures on the environment upon which we all depend.
The circular economy model uses the functioning of ecosystems as an exemplar for industrial
processes, emphasizing a shift towards ecologically sound products and renewable energy.
Sustainability is often connected to ethics, as both imply that one should act withing governmental
law (adhering to regulations and policies that control business) and conventional law( adhering to the
prevailing standards accepted by society).
However Milton Friedman, has proposed that the ‘business of business is business’ and sustainability
is for governments, charities and NGOs. The maxim ‘business is business’ implies that since a
company’s aims are purely commercial, sustainability will be accepted only if there is a good financial
case for doing so.
, Normally, in business we speak of normative ethics, distinguishing between prescriptive and
descriptive ethics. Prescriptive ethics prescribe norms and standards using moral improvements.
Descriptive ethics described what business people think is right and wrong, clarifying and analysing
ethical beliefs rather than changing them.
The relationship between sustainability and ethics is not always straightforward. Poverty reduction
through increased resource consumption actually deepens environmental sustainability challenges
by putting increased pressure on planetary resources.
