Sustainability Of Sustainability

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An essay for the course

SUSTAINABLE BUSINESS STRATEGY

Professor David Bevan

presented by: Alec BUSCEMI, HEC MBA 2009

Jouy-en-Josas, January 18th, 2008

What is Sustainable Development?

Sustainable development as an idea and expression gained some sustenance in the 1980s. In particular, with time, internal political drivers in the United Nations incited a re-examination of its role to reposition itself in a changing world. Sustainability then gained important impetus after the 1992 Earth Summit in Rio de Janeiro which set the Agenda 21 framework . This emphasized "improving" and "sustaining" quality of life, especially for the world's poor, without destroying the environment.

The popularity of measures and indices associated with sustainability can be attributed to John Elkington , who saw value drivers where many others before him saw only feedback, externalities, griping and dissatisfaction. There were few references to the expression of sustainability or Triple Bottom Line (TBL), before he coined the TBL expression and soon after his efforts, the usage of sustainability and sustainable spread like wildfire. An examination of popular literature, media and personal notes yields the following examples of less flexible and less drastic definitions of sustainability:

Ð'* Sustainability is the intelligent use of resources.

Ð'* Sustainability is stopping the degradation of the planet's natural environment and to build a future in which humans live in harmony with nature, by conserving the world's biological diversity while ensuring that the use of renewable natural resources is sustainable while promoting the reduction of pollution and wasteful consumption.

Ð'* Sustainability meets the needs of the present generation without compromising the ability of future generations to meet their own needs.

Ð'* The firm's engagement in Ð'« sustainable development Ð'» consists in combining performance and responsibility. The financial performance is not enough to appreciate the performance of a company.

Ð'* Responsible businesses are defined as those that are: Working towards environmental sustainability; developing positive relationships with stakeholders, upholding and supporting universal human rights, ensuring the use of good supply chain labour standards, and countering bribery.

Ð'* From pollution control to pollution prevention to sustainability

Sustainability definitions are often regrouped into both strong and weak subgroups before they are sliced and diced into analytical packets by critics. Both strong and weak refer to the precision and rigour attached to the notion of sustainability. On the weaker side of the spectrum of the definition range, many economists and analysts feel that sustainability becomes exactly the same as the classic frameworks established by economics. On the stronger sustainability definitions, authors more readily embark on a criticism of the many contradictory aspects of hardcore sustainability.

Many see only contradiction and illusion in all things sustainable, yet, in general, the stronger the definition of sustainability, the more inconsistencies they find with sustainability as a movement and conversely, the weaker the definition, the more invisible the hand which guideth . There is no room here to regroup and study many stronger definitions, nor is there much value in such an exercise (see later for one example). Yet in either group, sustainability arguments and action plans are typically centered on the following parameters of political and economic debate.

Ð'* resource scarcity

Ð'* global warming

Ð'* human health and pollution

Ð'* intergenerational equity

Ð'* social and environmental accountability

The Chimera of Resource Scarcity

At the heart of the polemic on sustainability lies deep misunderstanding of the dismal science of economics. From this, misapplication of several of its terms sows ever greater levels of confusion. Resource is such a term.

A sharp stone on the ground is ignored today and would have been treasured by our ancient ancestors. In both cases, the same stone is not the same resource. This point to a variable reality. In reality, resources do not exist independent of man; resource needs and the means to harness such resources Ð'- natural resources specifically Ð'- are created by mankind, and improved with technology. "(Since) resources are a function of human knowledge and our stock of knowledge has increased over time, it should come as no surprise that the stock of physical resources has also been expanding."

When both natural and virtual (know-how, methods, recipes) resources are seen in this fashion, it becomes clear that technological change is resource augmenting. This is made evident in agriculture, where, since 1950, food production has greatly outpaced population growth. "Humans are the active agent, having ideas that they use to transform the environment for human purposes. Resources are not fixed and finite because they are not natural. They are a product of human ingenuity resulting from the creation of technology and science."

The decline in the real price of food throughout the world over the past 80 years resulted from the dramatic increases in food production levels, while "the amount of land devoted to agricultural purposes expanded by only about 9 % from 1961 to 1999 (as world) population doubled" . The result of such seemingly positive mechanism is not always positively distributed as can be seen with the tendency of Western countries to subsidize their local producers at the expense of poorer 3rd world growers, driving food prices down further.

Even more subtle interactions between technology and resources are possible. Uranium would not have been considered a resource a century ago. Petroleum was not an important resource 150 years ago. They certainly are now, because of both technological change and resource development advancements. For instance, "the average cost of finding oil fell from $12 per barrel in 1980 to just $7 per barrel in 1998