By Roddy Langley
Forum for the Future recently questioned more than 25,000 UK university applicants as part of their Future Leaders Survey and they gave a depressing forecast of what they think life will be like in 25 years time. The next generation’s leaders strongly believe that by 2032 the planet will be overcome by environmental chaos – the Amazon rainforest will no longer exist and the world will face natural disasters. Seventy-eight percent say that serious change must happen if mankind is to survive.
Sustainable development is rapidly becoming a buzzword for the 'noughties' and an issue at the top of governmental and environmental agendas. But what does it really mean and how can it happen?
There are differing views on what the term means. “It depends on how you are defining sustainable development; in the OECD it is all about good governance, not just looking at the economic impacts of policies but also their environmental and social impacts” says Candice Stevens, Sustainable Development Advisor for the Organisation for Economic Co-operation and Development (OECD).
A more controversial stand is taken by Rob Dietz, Executive Director of the Center for the Advancement of the Steady State Economy who says that, “sustainability requires development without economic growth, something which societies can achieve by transitioning to a steady state economy,” and maintains that, “perpetual economic growth is a physical and ecological impossibility, so establishment of an economy with stable population and per capita consumption is critical to achieving sustainability.”
Taking a more pragmatic approach to the subject, the 'Fair Trade' label, an initiative which sets a minimum price for producers to ensure sustainable livelihoods, is one example of good practice. Innovative sustainable development can also be found elsewhere. Scientists from the University of Nebraska-Lincoln and the National Agricultural Research Organisation in Uganda have teamed up with farmers in the east of the country to evaluate the effectiveness of low-cost alternatives for soil treatment. By implementing alternative soil fertility management and a reduction in crop tillage, they hope to help these small-scale farmers increase crop outputs.
And recently, Seeds of Change, a global leader in sustainable organic agriculture practices, announced it will partner with Conservation International to create an environmentally sustainable cacao industry in the Brazilian Atlantic Forest, where both cacao farming and biodiversity are in jeopardy.
Whatever your standpoint, it is clear that sustainable development is vital to the future well being of the global environment, but what can business do to help?
Lloyd's is a member of the United Nations Environment Programme Finance Initiative Insurance Working Group (UNEPFI) and is currently working on sustainability. It recently hosted a meeting at which UNEP, Munich Re, Alliance, HSBC, The Technology Strategy board and Edinburgh University, UEA and Swiss Re (remotely) all attended and discussed the question.
“Sustainable development is a major challenge faced by the world today, and because of its size and role in the economy there can be no doubt that the insurance industry must be a strong lever for implementing sustainability,” comments Tony Cabot, principal delegate for XL Insurance to the same working group within UNEPFI.
XL Insurance is working with other insurers under the banner of the UNEP Financial Initiative to embed environmental, social and corporate governance criteria into its core processes - with the triple bottom line of people, planet and profit. “Solutions across the industry range from parametric weather insurance, micro-insurance for emerging markets, long-term risk transfer for the renewable energy sector and environmental impairment coverages,” adds Cabot.
Ultimately, we need to take a pragmatic approach to the future development of society and put our words into positive action. Global leaders need to work together to drive the sustainability agenda, and make sure it is fully entrenched in all future decision making. Business leaders can set an example and personally make a difference, as proved by Johan Eliasch, Chairman and Chief Executive of Head NV, who recently bought part of the Amazon rainforest in a bid to help mitigate the effects of global warming. Eliasch says that, “sustainable development is not at odds with the fight against climate change. But only if we take action now - otherwise the costs may be as high as 5-20% of global GDP."
If we are to achieve inclusive sustainable societies, it is critical that governments begin to work together to develop a set of standards and principles.
The definition of exactly what is required still remains undefined and too vague for practical use in policy-making, and if institutional inertia remains within some government departments then business can and must help deliver change, believes Candice Stevens: “Business is the key agent in globalisation - it can be an enormous force in promoting sustainable global markets which reward business practices that deliver improved social, economic and environmental outcomes for all.”
