Take a moment and think about this: 70,000 years ago, erect humanoids were almost eliminated by an Ice Age. Scientists estimate that roughly 5,000 female individuals existed during that time. They survived by adaptation to change, ability to understand consequences of doing nothing, a willingness to prudently experiment, and discovered two truths of life: hope and perseverance.
Now, let’s fast forward to the 21st century. We’re living on a planet, a very special planet that we call Earth. It is estimated that we have a population of about 7 billion people. So why is this important? Well, for starters, mankind is truly in jeopardy of extinction within the next 100 to 200 years. It is projected that by the year 2050, our population will grow to 12 billion people. That’s roughly 5 billion people in 40 years.
Now, let’s throw a monkey wrench into this US scenario. What is Sustainability? It is a pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but in the indefinite future. The term was originated by the Brundtland Commission which has become the most often-quoted definition of sustainable development as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.”
In 1987, the Brundtland Commission, was chartered to review and recommend long-term strategies that recognized population growth, limited resources, economic considerations and environmental impact to existing business practices. Why was this conducted? Here is an example: A recent survey shows world population growth has grown dramatically and will continue to do so:
- 1800 less than 3 percent of the world population lived in large urban areas
- 1900 about 150 million people lived in the largest urban areas
- 2011 currently about half of the world’s population live in large urban areas, 3 billion
- 2050 it is estimated that over 65 percent of the world population will live in urban mega cities
So, Sustainability addresses the importance of economic, environmental and social influences on all corporations. Sustainability also recognizes constraints that are probably not on your dashboards and will have strategic impacts [i.e., energy supplies, population growth, global competition, emerging markets, trade barriers, limits on resources, etc.]. Sustainability, in a general sense, is the capacity to maintain a certain process or state indefinitely. The concept of sustainability applies to all aspects of life on Earth and is commonly defined within ecological, social and economic contexts. To be sustainable, regardless of context, the Earth’s resources must be used at a rate at which they can be replenished.
So what? We live in the land of opportunity. We live in the United States. We have had the good fortune of being blessed with resources, diversified skills, an educated population, the largest world economy, and a democratic republic constrained by constitutional rights. Yes we have been given many blessings, but so what? (I’ll come back to this.)
In the today’s business world, executives make decisions regarding expenditures by the millions and billions of dollars. No think of this: how is that decision process determined?
Well, in terms of the environment, reusing resources without recognizing consequences. Why? Because that’s the only way it’s been done?! Well, this is 17th century mindset where resources were collected locally, hewn or molded into buildings or products, and then sold in an open market. Little has really changed in the 21st century.
We are still using 18th-century accounting practices that only recognizes sales, costs and assets. Before we get into an argument, it is true that please business accounting principles have been updated and standardized for the last 200 years. However, I would argue that most of those adjustments, amendments, and standardized approaches are based on government regulations, tax policy and international trade conformity. Nonetheless, profitability was inherently calculated on the cost of resources, cost of production, and fulfilling market needs without regard to the consequences of resource depletion.
Many companies are still reliant on Frederick Taylor’s principles that workers are incapable of understanding what to do and need to be enforced to ensure work completion. It is amazing that many businesses in today’s world still use these philosophies that were originated in the 19th century.
However, in today’s world where competing globally, due to a 60-year-old ‘free trade‘ policy that reduced or eliminated trade barriers in order to promote international trade among nations. This shift in policy was suppose to open up trade opportunities for the United States with other countries. But it was a two edge sword, for example, it produced outsourcing of millions of call center, financial and technical positions to improve corporate‘performance. In today’s marketplace, in the United States, we are tethered and constrained to a 20th-century policy of ‘free trade’ at any cost.
We can infer that this policy issue has been a critical element in our recent ‘great recession’. That is, millions of US jobs have been lost permanently, US businesses must compete in a noncompetitive world, and outsourcing in many instances has undermined corporate strengths.
- How the world’s population jumped from 3 to 7 billion in my lifetime (africahealth.wordpress.com)
- Energy poverty creating a respiratory disease ‘epidemic’ for almost half the world’s population (physorg.com)