While sustainable development is not a new concept, it has grown in prominence as a discrete and identifiable effort for business. For example, 83 percent of American and European executives surveyed thought that companies could develop real business value and economic prosperity from sustainable development initiatives, according to a recent Arthur D. Little study.
I think we all can envision what sustainable development might mean based on the meaning of the words and a little common sense. Probably the first thought that comes to mind is the continued prosperity of something, such as a business. That is the essence of sustainable development.
While the definition of sustainable development varies widely, the 1987 report of the World Commission on Environment and Development (i.e., Brundtland report) suggested that it is progress that "meets the needs of the present without compromising the ability of future generations to meet their own needs."
The most easily recognized results of this concern about sustainable development are the present efforts at pollution prevention, reducing greenhouse gases and resource conservation through recycling; however, these concerns are only the tip of the iceberg. Sustainable development is now commonly defined to encompass continued economic prosperity, environmental protection and social equity.
Clearly, this is a broad framework. This growing effort will have a major impact on not only our lives but also on our professional activities as we quickly approach the 21st century.
The issue of sustainable development has been embraced by government, business and to some extent, the public. It was spurred by the 1992 Rio Earth Summit and subsequent increasing involvement of business in the broad concepts of social justice and eco-efficiency. Sustainable development both intrigues and frightens business. It is intriguing for the efficiencies and competitive advantage it can offer, yet frightening because it requires out-of-the-box thinking and generates uncertainty about the future, as well as the need for change. For example, the Kyoto Framework Convention on Climate Change includes proposals for restrictions on carbon dioxide emissions for the developed world. Some experts have predicted that the agreement could have dire consequences for U.S. energy and power sectors, as well as our standard of living.
Climate change issues notwithstanding, the potential cost advantages of eco-efficiency and the competitive advantage of being a socially responsible "green," company are important issues. At an Arthur D. Little colloquium titled, "Making Business Sense of Sustainable Development," Ged Davis of Shell International said, "The customer now buys, along with everything else, the way you treat indigenous Indian tribes and your visibility in Nigeria or Burma. It is a practical reality. Corporate self-interest, which demands growth adequate to the business and shareholder value, affects and is affected by an ever-widening social system that can potentially destroy a company or give it opportunities and superior returns down the road."
This reality has resulted in the World Business Council for Sustainable Development (WBCSD). As stated by Ted Button, director, External Cooperation of the council, "The WBCSD aims to be the leading business advocate on issues connected with the environment and sustainable development." It grew out of the 1992 Earth Summit and is headquartered in Geneva, Switzerland, with local councils in several countries. WBCSD is a coalition of 125 international companies representing 30 countries and more than 20 industrial sectors. Some of the issues being addressed by the council include eco-efficiency, life-cycle analysis, and accounting for the environment. All of these issues will affect the ways in which we carry out our professional duties.
Eco-efficiency is one aspect of sustainable development. According to WBCSD, it makes seven principal demands on business. These are:
- Reduce the material intensity of goods and services;
- Reduce the energy intensity of goods and services;
- Reduce [the potential for] toxic dispersion;
- Enhance material recyclability;
- Maximize sustainable use of renewable resources;
- Extend product durability; and
- Increase the service intensity of good and services.
There are many practical examples of this approach. In the consumer market, we have tires that last 60,000 miles, versus the ones I had with my first car, which were good for 10,000 miles (I admit to having been testosterone-driven). We now have dishwashers and washing machines that use smaller amounts of soap and water to clean. Such machines give their producers a very strong marketplace advantage.
In an Automotive News World Congress speech in January, Harry Pearce, vice chairman of General Motors, said GM cars have gone from an average of 12 miles per gallon in 1974 to 28 miles a gallon in 1997. This was done with a drop in emissions of 96 percent for hydrocarbons and carbon monoxide and 90 percent for nitrogen oxides. Further, he talked about the next generation of powering systems which should produce equally dramatic leaps in fuel efficiency and reduction in emissions in a few years through technologies such as hybrid engines that use gas turbine generators, fuel cells, and better battery systems. Some of these power systems for cars are available for purchase now.
But how does one determine how well companies are doing in developing technology to meet the seven principles? The WBCSD is trying to develop a method to quantify and report on the progress that companies make. They call this "Eco-efficiency Metrics;" others might call it total cost accounting or some other name. The trick is to develop a common methodology and a reporting system that can be used by world business and will be acceptable to the community and stakeholders. No small feat, but one in which I expect we will see considerable progress over the next several years.
One of the tenets of sustainable development is social accountability. While this has many features and aspects, one critical aspect is public reporting. In the United States and in other countries, it has become common for the major companies to report on their impact and progress on health, safety and the environment. Many have also gone on record as stating laudable goals, then formally documenting their progress in reports that are separate from their normal annual financial reports. I believe this trend will continue, and may encompass sustainable development issues as a whole.
For many of us, this is a key driver for continual improvement -- and some level of job security. For example, in a speech delivered to the Conference Board in April, Christopher Gibson-Smith, managing director for Policies and Regions for British Petroleum, said, "Our goals are simply stated: No accidents, no harm to people, no damage to the environment." In fact, BP publishes its performance in this regard in a document called HSE Facts. This year it will also publish a related social report, which is basically an audit report of BP's role as part of a global society.
Another example is the recently published "Profits and Principles - Does There Have to be a Choice?" by the Royal Dutch/Shell Group. This document clearly frames contemporary sustainability issues facing the Shell Group of companies and others. In fact, the company even includes reply cards so that readers may make their views known on eight major issues. This report is in addition to the Shell Group's reports covering health, safety and environmental and social issues.
We also have seen the growth of other efforts related to social accountability and business. The recent voluntary standard called Social Accountability 8000 from the Council on Economic Priorities Accreditation Agency (CEPAA) is an example where a number of factors are considered before a company may be certified. These factors include child labor, compensation, discrimination, working hours, heath and safety, and the working environment. It may be that these differing certification programs will come together in a uniform way that encompasses the issues of sustainable development, including health, safety and environment.
From the health and safety perspective, the most direct connection with sustainable development is product design and stewardship. Many companies have involved safety and health professionals in the design of products and their subsequent proper and safe use, creating marketplace advantage and customer value. It is likely this trend will not only continue, but be enhanced.
Other connections will span the areas of eco-efficiency (now considered to include life-cycle inventory, total cost assessment and metrics) and social accountability. More attention will be paid to the supply chain in a "think globally, act locally" manner. This might include evaluating suppliers for their contributions to sustainable development.
Some companies have decided to embrace sustainable development. One might even say that Monsanto bet the farm on it (pun intended). The gamble that Monsanto has taken is that agriculture represents not only an ideal future business (the need to feed the growing population on less and less land) but also fits a sustainable development strategy.
Sustainable development is a movement that is sure to affect us all. It is important now to recognize the importance of this trend and to develop meaningful ways to contribute.
I would like to thank Lisa Bendixen and Virginia Morris of the Health, Safety and Environmental group at Arthur D. Little for their review of this article and helpful comments. For more information on the technical issues related to sustainable development, visit the International Institute for Sustainable Development at www.iisd1.iisd.ca. For more information on WBCSD and sustainable development, go to their Internet site at www.wbcsd.ch.
Contributing Editor Zack Mansdorf, Ph.D., CIH, CSP, QEP, is a director in the Safety and Risk Management Group at Arthur D. Little in Cambridge, Mass. He has extensive experience in safety and health management and is a past president of the American Industrial Hygiene Association.