Sustainability Inc.: The Battle for Sustainability

Well, here we are again, another week and another instalment from Sustainability Inc. But first an interesting bit of news; Google spends $200m on another wind farm, now that is another step in the right direction. Despite, I am sure some people thinking this is just a cynical PR stunt. Particularly in light of the bad press Google have received about not paying their fair share of tax and Green Peace’s report on energy use by their servers being the same as San Diego’s, when operating at full strength. But so what, this is another step in the right direction and sets a good example for big business and consumers. If you want to operate a large energy consuming business, then build a sustainable way of generating that energy. While at the same time developing more energy efficient ways of producing your goods and services.

Here is a link to the full article http://money.cnn.com/2013/01/09/technology/google-wind-farm/index.html

Now back to the usual, if you remember last week we looked at the importance of politics and policy in the sustainability arena. This week it is the turn of economics. There is of importance of in sustainability and that is as one of the three pillars of the triple bottom line that make up a sustainable business. But, in this article I intend to get under the skin of why it is important, looking at how sustainability and economics are at logger heads with each other and why an understanding of the progress being made in the economics/sustainability will aid a sustainability professional in their role.

Firstly, a basic definition of economics courtesy of Investepedia: -

‘A social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants. Economics can generally be broken down into: macroeconomics, which concentrates on the behaviour of the aggregate economy; and microeconomics, which focuses on individual consumers.’

And now a definition of Sustainability: -

‘Sustainable development is development that meets the needs of the present without compromising the needs of future generations to meet their own needs’. (Brundtland, 1987)

Economics looks at the way scares resources are turned into goods that are consumed by the market, it does not look at how these stocks, either natural or human can be replenished which would support the consumption for future generations. Also, by economic definition it is only when something becomes scares that it becomes valuable. Meaning that sustainability works against economics, because it looks to make resources renewable.

The fundamentals of economics have not been rethought since the time of Adam Smith and ‘The Invisible Hand’ some 200 years ago, taking regulations, human culture, interaction and quality of life as given. Economic theory needs to be updated to take into account these new factors and this is where ‘sustainable economics’ comes in.

Sustainable Economics is trying to be more inclusive, by including these factors, human, social, quality of life, see diagram above. Through doing this it also provides a good framework, which can be used to help business to become more sustainable, by meeting Government regulation, and abiding by new initiatives, improving the lives of its workers, which can boost productivity and create saving for the business. The framework can also be used as a tool to assess both sustainable socio- economic impacts the company would have on a State if it chooses to invest there. Which can give business leverage in securing favourable terms to invest in one state over another. Thus freeing up funds to be used to for investing in sustainable technology and practices at that plant, site etc.