The Three Pillars of Sustainability

The three pillars of sustainability are a powerful tool for defining the complete sustainability
problem. This consists of at least the economic, social, and environmental pillars. If any one
pillar is weak then the system as a whole is unsustainable. Two popular ways to visualize the
three pillars are shown. 1

Why this is important

Most national and international problem solving efforts focus on only one pillar at a time. For
example, the United Nations Environmental Programme (UNEP), the environmental protection
agencies (EPA) of many nations, and environmental NGOs focus on the environmental pillar.
The World Trade Organization (WTO) and the Organization for Economic Cooperation and
Development (OECD) focus mostly on economic growth, thought the OECD gives some
attention to social sustainability, like war reduction and justice. The United Nations attempts to
strengthen all three pillars, but due to its consensual decision making process and small budget
has minor impact. The United Nations focuses mostly on the economic pillar, since economic
growth is what most of its members want most, especially developing nations.
This leaves a void. No powerful international organization is working on the sustainability
problem as a whole, which would include all three pillars.
However, as the Great Recession of 2008 demonstrated, weakness in the other pillars can
directly weaken the environmental pillar. Many nations and states are cutting back or
postponing stricter environmental laws or investment, since their budgets are running deficits.
Many environmental NGOs are seeing their income fall. If the Great Recession grew
substantially worse and morphed into another Great Depression, you would expect the
environmental pillar would get severely less attention, since eating now is a priority over
saving the environment.

The social pillar is critical too. Once a war breaks out environmental sustainability has zero
priority. If a nation lives in dire poverty, the environment is pillaged with little thought for the
future.
Therefore solutions to the sustainability problem must include making all three pillars
sustainable.
Going deeper
Thinking deeply in terms of the three pillars of sustainability requires systems thinking. You
start seeing the world as a collection of interconnected systems.

The standard diagrams for visualizing the three

pillars are simplistic. To see the more correct relationship requires a diagram like the one
shown.
The largest system of them all is the biosphere we live in. It contains the human system, which
has two main systems: social and economic. When groups of people, from a tribe to a nation,
agree to form a government they form a social contract to increase their general welfare. This
contract binds the social and economic systems of the group of individuals together. The
people (the social subsystem) are working together under a central government to maximize
their economic system's output.
Seeing the overall system this way makes it clear that environmental sustainability must have
the highest priority, because the lower the carrying capacity of the environment, the lower the
common good delivered by the social system and the less output the economic system can
produce.
Going even deeper
How do you analyze something as complex as all three pillars of the sustainability problem?
Can the problem be solved?

Yes. Solutions exist. The sustainability problem is no more difficult than monumental historic
problems like:
1. The shortage of food problem - This was solved ten thousand years ago by the invention of
agriculture.
2. The short lifespan problem - Prior to the Industrial Revolution in 1800, the average
lifespan of (for example) British people was 40 years. Today it's 78 for men and 82 for women.
The problem was solved by the incremental invention of practices like sewage works, clean
water sources, and better housing, along with inventions like germ theory and antibiotics. 2
3. The autocratic ruler problem - It was not so long ago that kings, warlords, chieftains,
dictators, and the like ruled the world. Might made right. The vast majority of the population
lived at the subsistence level. There was no middle class. The upper class aligned themselves
with whoever was in control at the top. It was a system as old as human history. But it changed
nearly overnight with the birth of modern democracy in the late 16th century.
4. The Cold War problem - From the end of World War II to the collapse of the Soviet Union
in 1991, the free world held its breath in fear that nuclear war could erupt anytime. School
children cowered under their desks during nuclear attack drills, as the arms race caused both
sides to accumulate massive quantities of bombs. Mutually assured destruction (aptly
abbreviated MAD) seemed like the only way to achieve detente. The Cuban missile crisis of
1962 brought the US and the USSR to the brink of launching missiles to protect their interests.
But one side blinked and a holocaust was averted.

Sustainable Business Practices of IDLC

Contrary to common understanding, Corporate Social Responsibility or CSR involves a much wider
scope of activities than simple donations and charitable activities, more appropriately termed as
Corporate Philanthropy. Rather CSR refers to a companys responsibility towards the environment,
community and society as a whole in which it operates. A responsible and sustainable business
organization is one that does not only share profits with its stakeholders, but also ensures minimum
negative impact on its surrounding environment, both ecological and social, through its products,
policies and practices. In other words, a business is considered responsible and sustainable when it
meets its present needs without compromising the needs of its future generations, through
integrating the 3 Ps: People, Planet and Profit.
Being a financial institution, IDLC is in a much better position to promote sustainable business
practices among its stakeholder groups, especially our clients and employees. As such, IDLC has
always been keen to commit its resources not only to maximize its own profitability, but also to offer
better quality of life to both its internal and external stakeholder groups.
As part of this practice, IDLC is renewing its commitment to contribute towards greater
environmental and social sustainability by undertaking a number of initiatives in various areas.
Initially staring within our own organization, IDLC will eventually reach out to its external
stakeholder groups as well.
To coordinate our sustainability initiatives and move forward in a structured manner as per globally
acceptable standards, IDLC has become signatories to a number of local and international initiatives
promoting sustainable business practices:

UNEP FI (United Nations Environment Programme Finance Initiative)

IDLC is proud to become the first member from Bangladesh to UNEP FI (United Nations
Environment Programme Finance Initiative) a voluntary initiative working with over 200
financial institutions worldwide to incorporate environmental sustainability practices within their
operations.
www.unepfi.org
UNGC (United Nations Global Compact)
Since 2007, IDLC has been a signatory to UNGC (United Nations Global Compact) the largest
voluntary initiative in the world to promote sustainable practices among business houses, civil
societies, academic institution, business associations etc., through ten globally accepted
principles in the areas of Environment, Labor, Human Rights and Anti-corruption.
www.unglobalcompact.org
CSR Centre
IDLC has become the member of CSR Centre in Bangladesh, an initiative of BEI (Bangladesh
Enterprise Institute) which promotes responsible business practices within local corporate
houses, and acts as the local network of UNGC in Bangladesh
k
www.csrcentre-bd.org
Since sustainable business is a comparatively new concept in a developing country like Bangladesh,
adaptation to a new way of doing business will certainly call for a lot of time and effort from all our
stakeholder groups, especially our management and employees. However, IDLC is confident that
our continuous drive towards becoming a sustainable business organization will lead us towards
better performance from a financial, ecological and social perspective, and in the process, establish
us as a truly responsible corporate citizen of the country.

ANTI-CORRUPTION
POLICIES AND PRACTICES
IDLC has a dedicated Internal Control and Compliance (ICC) Department for maintaining a
transparent system, while preventing/solving incidents of corruption within the Group. This is
ensured through periodic audits of each division and branch, in addition to regulatory and
statutory audits respectively by Bangladesh Bank and statutory auditor. Moreover, commitment
from the employees is required to maintain a workplace free from corruption.

ZERO-TOLERANCE POLICY
IDLC maintains a Zero-Tolerance Policy with regard to incidences of corruption or
malpractice within the organization. In case of identification of any such incident
through periodic audits or any other means, a thorough investigation is undertaken against the
accused, and if proven responsible, the person is either charged for
monetary compensation or is terminated with immediate effect
RISK-BASED AUDITING
In 2011, IDLC introduced Risk-based Auditing (RBA) to its internal audit system, focusing
on key risk areas that may result in non-compliance with internal policies, procedures and
regulatory requirements. After identification of the risk areas, risk-based audit checklists are
prepared to develop an action plan and reduce impact of the risk areas, while major risk
indicators are identified to form a basis for better risk control and
management in future. ICC Department, in collaboration with respective departments, is
responsible for the audit process
PREVENTION OF MONEY LAUNDERING AND
TERRORIST FINANCING
IDLC adopts strict measures to discourage involvement in activities such as money laundering
and terrorist financing, in compliance with Money Laundering
Prevention Act 2009 and Anti Terrorism Act 2009 of Bangladesh Bank. These are also
integrated in our core risk management system. Major initiatives taken in this regard are:
As per regulatory directives, IDLC introduced its own policy to prevent money aundering and
terrorist financing, comprising of KYC (Know Your Customer)
guidelines that form a part of IDLCs Credit Policy. Applicable for all individual and
institutional clients for both asset and liability products. Business units must consider KYC
criteria while establishing business relation with a new client. Detailed reporting is done at the
time of preparing project appraisals.
Customers proper identity, profile of controlling shareholders and authenticity of source of
funds are the key areas that are looked into. Additional due diligence is conducted in case of
Public Figures and Associates, and Politically Exposed Persons. Proper screening and
background checking of candidates is performed during recruitment.
Extensive training is provided to employees for identification, prevention and avoidance of
such issues.
INTRODUCTION OF CORE BANKING
SOFTWARE
In 2011, IDLC introduced Oracle Flexcube UBS, one of the top Core Banking Softwares
(CBS) worldwide, for conducting its day-to-day operations and transactions in a more
efficient and timely manner. IDLC is proud to be the first-ever NBFI in Bangladesh to have a
core banking platform, along with only a few other top-tier scheduled banks, while being the
fastest-ever CBS implementer in Bangladesh.

ENVIRONMENTAL STEWARDSHIP
Environmental Risk Management (ERM):
To control and minimize environmental risks in projects financed by IDLC. Environmentfriendly Technologies:
To adopt environment-friendly technologies and promote
companies introducing such technologies in Bangladesh.
Preservation of Resources:
To trigger responsible behavior among our employees, as well as external stakeholder groups,
for efficient and responsible utilization of resources.

Waste Management:

To contribute to better waste management, following the three principles of Reduce,

Reuse and Recycle.
Renewable Energy:
To finance projects introducing or commercializing alternative and or renewable energy
technologies in Bangladesh as a solution to our growing energy deficiency.
EMPLOYEE ORIENTATION
In 2011, IDLCs main commitment was to create awareness among its employees regarding
better and more responsible practices. As such, IDLCs CSR Department
conducted an orientation session for employees across different branches of the Group,
focusing on the following aspects:

1. Difference between Corporate Philanthropy and Corporate Social Responsibility

2. Definition of a sustainable business Relevance and benefits of environmentally and
socially responsible practices in the context of a financial institution
3. Local and global sustainability initiatives
4. CSR commitment, strategy and focus of IDLC
5. CSR initiatives undertaken till now, and
6. Role of each employee in gaining this objective

EMPLOYEE HEALTH AND

SAFETY
WORKPLACE SAFETY
A safe, healthy and hygienic work environment is maintained at all branches of the IDLC
Group. Sufficient lighting and other utilities, air-conditioning and separate toilet facilities are
provided for the comfort of its employees during work. Moreover, all the branches are
adequately equipped with fire-fighting equipments and fire drills are arranged at
regular intervals to prepare employees in the event of any fire hazard.

EMPLOYEE VACCINATION
A vaccination program was arranged at IDLCs Corporate Head Office on December 14, 2011,
for the employees and their family members, for prevention against Hepatitis B
and Cervical Cancer. An awareness session had also been arranged earlier at IDLC to inform
the employees of the causes, prevention and treatment measures against these
diseases.
INSURANCE COVERAGE
All permanent employees of IDLC are entitled to receive both Life Insurance and
Hospitalization Insurance coverage during their stay at IDLC, securing both
the employees and their families in the event of any unfortunate occurrence.
EMPLOYEE SATISFACTION
IDLC focuses on a dynamic HR process with the objective of attracting and retaining the best
people in the industry, and developing a skilled, competitive and motivated
workforce. The significant reduction in employee turnover rate over the years reflects
employee satisfaction at IDLC.