Om,MayGodProtectusBoth(theTeacherandtheStudent),

MayGodNourishusBoth,
MayweWorkTogetherwithEnergyandVigour,
MayourStudybeEnlightening,notgivingrisetoHostility,
Om,Peace,Peace,Peace.

IntroductiontoSustainableDevelopment&
CorporateSustainability
TataL.RaghuRam,XLRI

Paradox

Aparadoxisalogicalstatementorgroupofstatementsthatleadtoacontradiction
orasituationwhich(iftrue)defieslogicorreason
Wikipedia

Our vision is to be the global

steel industry benchmark for
value creation and corporate
citizenship
-TATA STEEL

We work to create a better future every day

We will inspire people to take small everyday actions
that can add up to a big difference for the world.
We will develop new ways of doing business with the
aim of doubling the size of our company while
reducing our environmental impact - HUL

To enhance the wealth generating

capability of the enterprise in a
globalizing environment, delivering
superior and sustainable stakeholder
value - ITC

To emerge from the position of domestic leader

to leading global player in the energy sector by
adopting best practices from mine to market
with due care to environmental and social
sustenance CIL

XLRIsVision
Apassionforacademicexcellence
Uncompromisinghumanvalues
Asensitivesocialconscience
Anabidingcommitmenttoimprovingthequalityofthelifeinorganizations
andsociety
Integrity
XLRIJamshedpurwasthefirstIndianBSchool toendorseUNGCsPRiME
FatherAruppe CentreforEcology&Sustainability(FACES)
CentreforRuralDevelopment
Socialentrepreneurshipfund
XLRIiscommittedtoachievecarbonneutralstatusinfiveyearswitha
capitalcommitmentofRs.75lakhs.

SustainableDevelopment AContext&Direction

SustainableDevelopment

Developmentthatmeetstheneedsof
thepresentgenerationwithout
compromisingtheabilityoffuture
generationstomeettheirownneeds

SD concerns create
Business risks as well as opportunities

1.

2.

Managers should be able to take advantage of the

business opportunities inherent in societys
demands for SD.
Should be able to turn risk into opportunity

Anorganismssurvivaldependsontwocriticalfunctionsfrom
itsenvironment:provisionofresourcesandabsorptionof
wastes.

Source
Provideresources:
Water
Cleanair
Nutrients

Environment

Organism

Sink
Absorbwastes
andbyproducts

Thesameprincipleappliesatlargerscales,e.g.,toacompany,industry,or
economy.

Hownatureworks?

Natureworksincycles

No
Waste

Thereisnowaste whatis
unusedbyonespecies
becomesnutrientsforthe
next
Thesunsenergydrivesthe
process:
Greencelledplantsusing
photosynthesiscreate
netconcentrationand
structure

Industrial systems function primarily in a linear fashion

Take

Make

Take natural capital,

valuable material, and
process it into unusable
waste

Waste

Only 6% of
material flow
ends up in
products

Source: Hawken, Lovins, Natural Capitalism

Thisindustrialsystem,operatingonaneverlargerscale,is
embeddedinandaffectingnaturescycle.

Expanding industrial systems affect

both sources and sinks

Sinks
Sources
Key resource bases
are being exploited at
rates faster than their
ability to regenerate.

Environment
Economy

The available land

area where nature
can break down and
recycle wastes is
shrinking.
The quantity and
types of wastes
created by industrial
societies cannot be
fully absorbed and
recycled by nature.

Socio-Economic Context
Disparities across two Indias
2nd fastestgrowingeconomy
11th largestnominalGDP(4th
largestintermsofPPP)
Percapitaincomeof
Rs.38,000,growingat14.4%
annually
2nd largesttechnicallyqualified
manpower
Robustindustrial
infrastructure
Indigenousspaceprogram,
supercomputer
5th inlistofnumberof
millionnaires
Etc.

Etc.

134/182onHumanDevelopment
Index
65/84onGlobalHungerIndex
42%ofWorldsmalnourished
children
77%populationwithdailyincome
of<Rs.20
93%employmentinunorganised
/informalsector
67%workforcehasbelowprimary
levelofeducation
600mndependentonagriculture;
averagefarmsize1.4hectare;high
indebtedness
Worlds1/3rd populationwithout
waterandsanitation

Global Trends
Millionsofpeopleworldwidearestrugglingtomeettheirbasicneeds.
Distribution of Total World Income

1.3billionpeopleliveinabsolute
poverty,withincomeslessthan
$1/day(WorldBank)
841millionpeopleindeveloping
countriessufferfrombasic
proteinenergymalnutrition(UN
FoodandAgriculture
Organization)
Nearly1billionpeopleeither
cannotworkorareemployedin
jobswheretheycannotsupport
theirfamily(InternationalLabor
Organization)

Richest
Fifth

82.7%

11.7%

2.3%

1.9%
Poorest
Fifth

1.4%

(UNDP, Human Development Report)

Somedefinitions
Corporate sustainability is a business approach that creates longterm
shareholder value by embracing opportunities and managing risks deriving
from economic, environmental and social developments.
DowJonesSustainabilityIndex

A sustainable business is one that delivers value for investors, customers,

and employees; improves the living standards of its employees and the
communities it touches; makes wise use of natural resources; and treats
people fairly.
CramerandKarabell in"SustainableExcellence

Developmentthatintegratessocioenvironmentaland
equitablebenefitsharingconcernsintodecisionmakingwhile
contributingtointerandintragenerationalhumanwellbeing

RaghuRam

Howeasyisit?

MiltonFriedmansargument
TheNobelPrizewinningeconomistMilton
Friedmanargues:
Fewtrendscouldsothoroughlyundermine
theveryfoundationsofourfreesocietyasthe
acceptancebycorporateofficialsofasocial
responsibilityotherthantomakeasmuch
moneyfortheirstockholdersaspossible

Stakeholdertheory
Thebottomlineorprofitisnottheonlyconcernforthe
company.Stakeholdertheoryintegratesresourcebased
views,marketbasedviews,politicalviews,andsocietal
views(Freeman,1986).

R.EdwardFreemanisanAmericanphilosopher

CreatingSharedvalue
MichaelE.PorterandMarkR.Kramer
Societalneeds,notjustconventionaleconomicneeds,
definemarkets,andsocialharmscancreateinternalcosts
forfirms.
Companiescancreateeconomicvaluebycreatingsocietal
value.
byreconceivingproductsandmarkets
redefiningproductivityinthevaluechain
buildingsupportiveindustryclustersatthecompanyslocations

Companies evolved in how they manage SD issues

Porter&Kramer
Sustainable
Development

Freeman
Risk Management

Friedman

Environmental
Compliance

End-of-pipe
Limit impact of current
activities

Pollution prevention;
Management systems
Redesign to eliminate impacts
of activities

Strategic integration
Change activities and design
of industrial system

Why do we degrade Environment?

Environmental resources are CPR
No well defined property rights
Belongs to all while using, to no-one while
paying
Leads to The tragedy of Commons
Results in Externalities
Impact on environment is external to the
profit & loss calculations of the economic
agent - eg. Car users (-ve), plantations (+ve)

 Stakeholders
polluters, affected, controllers etc..
Sustainable Development
Environmental resources are to be
shared across generations
Possible that future generations may
prefer natural capital over man made
capital

Thechallengeofsustainabledevelopmentarisesfromtwo
majorconvergingtrends

Declineinresourceavailability&ecosystem
services

Diminishing
marginfor
action

Sustainability

Impact=Population(P)xConsumption/capita(A)x
Impact/unitofconsumption@Technology(T)
I=PxAxT

History of Sustainable Development

1962 - Rachel Carson publishes "Silent Spring".
This book brought together research on toxicology, ecology and epidemology to suggest
that agricultural pesticides were building to catastrophic levels.
This was linked to damage to animal species and to human health.
It shattered the assumption that the environment had an infinite capacity to absorb
pollutants.
1968 - The Club of Rome, is established by 36 European economists and scientists. Its goal is to
pursue a holistic understanding of the 'world problematique'. It commissions a study on global
proportions to model and analyse the dynamic interactions between industrial production, population,
environmental damage, food consumption and natural resource usage.
1969 - Friends of the Earth forms as a non-profit organization dedicated to protecting the planet from
environmental degradation; preserving biological, cultural, and ethnic diversity; and empowering
citizens to have an influential voice in decisions affecting the quality of their environment -- and their
lives.
1971 - Greenpeace starts up in Canada and launches an aggressive agenda to stop environmental
damage through civil protests and non-violent interference.

History of Sustainable Development

1971 International Institute for Environment and Development (IIED) is established in

Canada with a mandate to seek ways to make economic progress without destroying the
environmental resource base.

1972 United Nations Conference on the Human Environment, Stockholm. Only one
Earth - led to the development of The United Nations Environment programme
(UNEP)

1972 Club of Rome publishes "Limits to Growth" (Meadows et.al) report

Best seller in several languages.
It described the use of a computer model World 3 - to study the implications of
continuing exponential growth in five interconnected trends of global concern:
industrialisation, population growth, widespread malnutrition, depletion of nonrenewable resources and ecological damage.
The report adopts a pessimistic view of development, warning of severe resource
shortages if development were to maintain its current momentum.
Extremely controversial - Northern countries criticising it for not including technological
solutions and Southern countries criticising it because it advocates abandonment of
economic development.

History of Sustainable Development

1974 Rowland and Molina release seminal work on CFCs in Nature magazine.
They calculated that if human use of CFC gases was to continue at an unaltered rate the
ozone layer would be depleted by many percent after some decades.

1983 World Commission on Environment and Development forms. The commission works for 3
years to weave together a report on social, economic, cultural, and environmental issues.

1984 Worldwatch Institute publishes its first State of the World Report.
The report monitors changes in the global resource base, focusing particularly on how
changes there affect the economy.
It concludes that "we are living beyond our means, largely by borrowing against the future."

1985 Antarctic ozone hole discovered by British and American scientists.

1987 World Commission on Environment and Development publish - Our Common

Future (The Bruntland Report) in response to the request from the UN general
assembly to propose long-term environmental strategies for achieving sustainable
development by the year 2000.

History of Sustainable Development

1987 Montreal Protocol focused on the depletion of the stratospheric ozone layer and
eliminating substances that cause this (HCFCs).
Has since been strengthened twice - London and Copenhagen.
Production of CFCs in North stopped by 1996, countries in the South (China and India)
to end production by 2006.

1988 Inter-Governmental panel on Climate Change

Resulted in the framework convention on climate change signed by 153 countries + the
then EU, dealing with the threat of global warming
Thought lacked firm agreements on targets, did aim to stabilise 1990 levels of CO2 and
other greenhouse gases

1992 Meadows, D. B., Meadows, D. L. and Randers, J., Beyond the Limits, London:
Earthscan.
Using a computer model to map patterns of growth, the report concluded that
environmental collapse was inevitable.
'If the present growth trends on world population, industrialisation, pollution, food
production and resource depletion remain unchanged, the limits to growth on this planet
will be reached some time within the next 100 years'.

History of Sustainable Development

1992 United Nations Conference on Environment and Development (UNCED) held in Rio de
Janeiro, Brazil The Earth Summit. 179 countries participated in this conference working
towards reconciling the impact of human socio-economic activities on the environment.
Outcomes:
Convention on biological diversity
Framework convention on climatic change
Principles of forest management
Agenda 21
The Rio declaration on environment and development

1994 Law of the Sea national sovereignty of off-shore waters and the national
responsibility for the ecosystems within these waters (re. dumping waste, & fish stocks
etc.)

1997 Kyoto Protocol Worlds Governments met in Japan to negotiate a treaty to start
dealing seriously with climate change to reduce emissions of serious greenhouse gases
CO2, CH4, NO, + 3 types of fluorinated gases.

History of Sustainable Development

1997 - Earth Summit+5 - A five year review of Earth Summit progress was
made by the United Nations General Assembly.
The final document adopted by delegates from over 165 countries -while taking small steps forward on a number of issues, including
preventing climate change, forest loss and freshwater scarcity disappointed many in that it contained few new concrete commitments
on action needed.
2001 Climate Summit, Bonn 178 countries developed a framework of how to
implement the 1997 Kyoto Protocol
2002 - Earth Summit 2002, Johannesburg, South Africa. Rio+10 - World Summit on
Sustainable Development -people, planet, prosperity,