The only thing sustainable about the brutal reality of the normative paradigm of sustainability is the ‘green’ colour of cash sadly rather than the altruism of this -ism. Not all that bad as monetary valuations are usually taken more seriously. The philosophical underpinning of sustainability is about inter-generational transferability as per the 1987 Bruntdland Report. The short-termism of financial markets and financial global capitalism does not render sustainability sustainable.
Sustainability ultimately is about better communities and liveability. Sustainability is triple headed : Ecological, Economic and Social are the three strands of the triple helix. Sustainability has transformed from its normative origins in to a platform for communicating the corporate brand. Activist investors do ask for the Social Return on Investment on their impact bonds but these folks are a trickle in the avalanche of asset classes that global capital changes hands in. Sustainability Reports are prepared as per the GRI Framework to demonstrate sustainability performance to ecologically aware Gen Y retail investors. It is not for the displaced community in Lanjigarh, Odisha but for the analysts at Citi. The pull is from the masters of the market.
The latest flavour of the season in sustainability and corporate citizenship circles is the circular economy & sharing economy. Good old human sharing values and Cradle to Cradle thinking synced to create the latest cool intellectual fad.
Majority of sustainability related investment by private sector companies is to meet the local environmental, health & safety and social sector legislative requirements of the land. Sometimes, even voluntary best practice is beyond the ambit of the C Suite Level executive as the Randian view of shareholder value capture dominates. Green field industrial projects often require IFC funding or any form of Institutional Lender Support such as JICA or any Exim Bank. These financial institutions need the project proponent to adhere to Equator Principles and IFC Performance Standards throughout the Project Lifecycle to address environmental and social concerns. The decision making prowess for a change is with the environmental and social expert panel at IFC offices at Delhi and DC rather than the CFO. EHSS has to move beyond the tick box due diligence check-list to a move term governance led mechanism. The Finance Teams have to get the nuance of the Economics of Environmentalism for them to be truly invested in the process.
Sustainability can only take root if this ethical paradigm can be understood by the CFO over a casual water-cooler chat. Its time for Sustainability to move beyond green washing and be a profit centre SBU from a cost centre. Locking value from Sustainability Initiatives can take place if triple bottom-line thinking could dominate the thinking in strategic planning of SME’s.