Further Elaborations on Sustainability Driven Enterprises

An article of mine was published lately in the New Straits Times, on how I believe that social enterprises can drive sustainable development. As the length of the article is limited to 660 words, I had to cut down on quite a bit of what I wanted to say – so I thought it might be good to write a follow-up to flesh out some of the concepts and ideas.

This is a constant work in progress, and what I write here is informed by what I’ve read so far. I believe that the root of the problem lies in blind pursuit of economic growth over everything else. Our attitudes towards development has to shift towards development that is sustainable – further on in the article I explain different interpretations, and which is most useful for humanity. Social businesses can then build upon this particular interpretation to drive sustainable development.

Let’s start.

The way that we view the economy has to change.

For decades, development has focused on economic growth, and at this point we are simply obsessed with it. But does growing economically truly mean an increase in human well-being? This is a subject that many have written about. Some have argued that income growth matters to the point where basic needs can be met, after that the effect on happiness diminishes.

According to the World Happiness Report 2012, political freedom, strong social networks and an absence of corruption are together more important than income in explaining well-being differences between happy and unhappy countries. At the individual level, good mental and physical health, someone to count on, job security and stable families are crucial.

The relentless pursuit of economic growth has actually led to a disturbing level of income inequality. The rich get richer, and the poor get poorer – the rules of the game are highly skewed in favour of the ones who are the most wealthy.

[jwplayer mediaid=”14741″]

Consider these figures mentioned in the video:

  1. 300 of the richest people in the world own as much as the world’s poorest 3 billion.
  2. Rich countries give 130 billion dollars in aid to the poor countries, yet take back more than $2 trillion in the form of tax avoidance/trade mispricing ($900bil), debt servicing ($600bil), and natural resources and cheap human labour ($500bil). Every year.

To me, these figures drive home the point that blind pursuit of economic growth does not increase human well-being in general – it actually deprives the poor and under-privileged.

Shall we advocate de-growth then?

The simple answer is no. The state of the world is so deeply entrenched that waving a de-growth flag is not going to get you anywhere. The dire situation that we are in right now should not be compounded by further bickering between the pragmatists and the idealists, which in my opinion generates a lot of negativity and is a waste of energy. This energy is better placed in recognising the reality that we are in, and in coming up with solutions.

Therefore, we set our sights to the middle ground of “sustainable development” and its emphasis on environmental, social and economic aspects of development.

Some interpretations of Sustainable Development

A lot has been written about sustainable development. The concept has also been met with some cynicism, as depicted by the comic below:

Oxymoron (Source)

Oxymoron (Source)

It is worth delving deeper into the idea of sustainable development instead of just dismissing it as an oxymoron. As it turns out, the philosophy behind sustainable development is much more complicated than sustainable = good, development = bad. This particular perspective stems from the idea that development is all about depleting environmental and social conditions to advance economic growth. I will elaborate on this a couple of paragraphs below.

Sustainable development is a humanistic endeavour. Our pursuit of economic development should not be an end in itself – it is a means to an end, of social development. Therefore it is reasonable that we can merge the economic pillar with the social pillar of sustainable development, and view it as social development in general. This simplifies matters a little and leaves us with only two pillars of sustainable development to consider: the social (human), and the environmental (ecological).

Here we come to an important conceptual fork. Different interpretations of sustainable development usually view the relationship between human and ecology in two ways: “humans-and-ecosystems” vs. “humans-in-ecosystems”. The different interpretations can be clearer understood from the figure below:

Interpretations of Sustainable Development

Interpretations of Sustainable Development in Parrish (2008)

The “humans-and-ecosystems” approach tends to be quantitative, and views the relationship between humans and ecosystems as being separate (and therefore ecosystems are exploitable).  The “humans-in-ecosystems” approach focuses on human well-being in a more qualitative way, and recognizes that in order to flourish, humans have to work within ecological constraints. Co-evolution with the system is the way to go for mutual benefit.

Therefore, “humans-in-ecosystems”, with a co-evolutionary perspective, should be the foundational mindset of sustainability-driven enterprises.

Sustainability-driven enterprises

The sustainability-driven enterprise (also called sustainability enterprise) is a relatively new breed, and can be defined as “an enterprise that is able to sustain its own activities while contributing to sustainable development of the larger social-ecological system of which it is a part” (Parrish, 2008, p.34). As it aims to sustain itself to advance the goal of sustainable development, it is important to think about sustenance on the economic side of things.

Muhammad Yunus's 7 principles of Social Businesses

Muhammad Yunus’s 7 principles of Social Businesses (Source)

Here it may be well served by seven principles for a social business, as outlined by Nobel Peace Prize winner Muhammad Yunus, founder of Grameen Bank:

  1. Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.
  2. Financial and economic sustainability.
  3. Investors get back their investment amount only. No dividend is given beyond investment money.
  4. When investment amount is paid back, company profit stays with the company for expansion and improvement.
  5. Environmentally conscious.
  6. Workforce gets market wage with better working conditions.
  7. …do it with joy.

Concluding Notes

I write this article in hopes that someone out there will be inspired to think of doing business in a different way. Efforts are already underway, we see some thriving Malaysian companies that are driven by the vision to make a positive difference in society and the environment.

Income generation is not a bad thing if the income is reinvested into social and environmental sustainability that we need to increase the collective well-being of humanity. What is pathological is the manic hoarding of wealth at all cost, at the expense of fundamental ecosystem services and basic human rights.

We should understand by now that climate change and natural disasters know no borders, and do not discriminate between the rich and the poor. As is often pointed out, the scramble to save The Earth is ultimately a scramble to save ourselves. The Earth will still be around for billions of years to come, with or without us.

Featured image credit: here

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