Sustainable business is profitable business
What was most remarkable about the Sustainability Summit: Asia 2006, organised by the CII-ITC Centre of Excellence for Sustainable Development, was that it happened at all. For business to be so concerned about an issue long considered the domain of voluntary organisations highlights the vital nature of the issue, as also the gradual shift in ‘alternate’ development models towards mainstream thinking. The triple bottom line approach, advocated by the CII-ITC Centre, asks for corporate strategy to be driven by considerations of economic, social and environmental dimensions of sustainability. Business is traditionally valued on the criteria of current profitability, shareholder value, market share and existing capital base; equally, it is evaluated on future cash flows, risk assessment, market potential and long-term brand viability — in other words, it is appraised on its sustainability. Today, as businesses have become more alert to the impact of social and natural factors on business, the criteria for evaluating sustainability have expanded. Business is becoming increasingly sensitive to the fact that in order to create sustainable value, its social strategies must be clear. In recent years, corporate entities have been compelled to accept the reality that without planning for the social and environmental dimensions of the sustainability challenge, businesses will face unexpected risks. The adoption of eco-efficiency principles — such as reduced or more efficient use of materials, energy and other resources, minimising toxic effusion, use of clean technology, recycling waste and increasing product durability — improves both profitability and sustainability.
While it is undoubtedly the government’s task to institute norms for sustainable development and associated mechanisms for regulation, only the financial imperative of business growth can ensure compliance. To this end, we need to share knowledge of the latest technologies and encourage business alliances. We also need to institute indices for sustainability on the economic, social and environmental fronts. Making sustainability a key concern for India Inc would be an effective way to make sustainable development a reality for the country as a whole.