Sustainability and business

Citation

Yadav, S.S. and Shankar, R. (2011), "Sustainability and business", Journal of Advances in Management Research, Vol. 8 No. 2. https://doi.org/10.1108/jamr.2011.42608baa.001

Sustainability and business

Article Type: Editorial From: Journal of Advances in Management Research, Volume 8, Issue 2.

In last two decades or so, especially after the Earth Summit of 1992, held in Brazil, the world community has come to realize that economic development as it has been pursued by many countries is not sustainable. This development has gone on the premise that the natural endowments – land, water and air – are in abundance and, therefore, human beings can exploit them endlessly to satisfy their excessively unending needs. Needless to say, this premise was too simplistic. Now every citizen of this dear planet on which we live knows that land space is not unlimited, water bodies are highly polluted and air is getting more and more poisonous each passing day. This is the crux of the issue of sustainability. The loss of biodiversity and human induced climate changes are the outcomes of the unsustainable path of our development process.

The World Commission on Environment put forth the concept of sustainable development in 1987. The Commission defined it as “development that meets the needs of the present without compromising the ability of future generations to meet their needs.” As a matter of fact, the French writer, Antoine de Saint-Exupery had, decades earlier, put it very elegantly, “we do not inherit this earth from our ancestors; we borrow it from our children.” During his time, sustainable development had not yet become an issue of global concern.

The subject is very wide and multidimensional. Needless to say, all entities right from the UN to national governments, local institutions, business organizations and individuals have to do their bit to contribute to the larger cause of sustainable development.

How can businesses or corporates contribute towards this effort? Hitherto, the profit has been the main motive of businesses. But now, two more motives have to be considered. They are planet and people. Thus the new paradigm of businesses has to take into account 3Ps – profit, planet and people. In other words, in order to be sustainable, businesses have to make profit; they have to make efforts to protect environment or planet resources – land, water and air; and, they have to ensure that the benefits are shared by larger society or stakeholders. To put it simply, triple bottom-line approach must guide businesses in future.

Protection of the planet does not mean only refraining from depletion of natural resources through their over-use but also refraining from polluting them. Air pollution is caused by the gases that are released into the atmosphere day in and day out. Among these, carbon dioxide has the maximum share. Others are oxides of sulfur, methane, etc. As a group, they are known as green house gases. They have adverse effect on human health. Since they trap the heat emitted by earth, there is a rise in temperature, which, in turn, may induce rapid melting of ice in the Himalayas and Polar regions, leading to unimaginable catastrophe.

To encourage corporates to take up business projects, which would generate less carbon dioxide, the United Nations Organization has created UN Framework Conventions for Climate Change. This framework has put in place a Clean Development Mechanism (CDM) regime. Under this regime, companies are encouraged to implement carbon-emission-reduction projects. As a result, they earn certified emission reduction (CER) credits. Each credit is equivalent to one ton of carbon dioxide. The CERs are tradable like any other tradable asset in the international market. They can be sold for cash to the nations or companies, which cross the emission levels allowed to them.

This mechanism is in very nascent stage. Yet, hundreds of CDM projects are being implemented in countries like Brazil, China and India. The potential for such projects may be large. Since the subject is new, its evolution presents many opportunities to academic researchers in the area of business management. Academics may like to look at the related issues such as financing of carbon credit, attitudes of corporates towards the implementation of the mechanism, modeling carbon supply chain, drawbacks in the system and so on. We look forward to well-researched papers on the subject in near future.

This issue of Journal of Advances in Management Research (JAMR) contains a number of papers that cover many important areas within the scope of the journal. Mr Oran Vongsuraphichet and Prof. Lalit Johari have examined the perception of insurers and intermediaries about the response to Thai non-life insurance industry to deregulation and concluded that the local insurers should improve factors such as financial strength, accurate pricing, innovative sale methods, an understanding of the local culture and alliances with other industries. Dr Navin K. Dev and his co-authors have discussed a supply chain case study, which addresses the operational concerns of a real-life manufacturing environment by applying theoretical models in a realistic environment, and compared the results of theory with practice. Prof. Chen and Prof. Tan have investigated the perceived impact of just-in-time implementation on operations performance. Dr Padhi and Prof. Prem Vrat have discussed an analogy of bio-immune system with competitive bidding in auction to develop a model useful for managerial decision making. Mr Wakchaure and Dr Jha have modeled the variables related to failure of a bridge and derived useful managerial insights. Dr Seema Gupta and her co-authors have discussed the impact of MoU on financial performance of public sector enterprises in India. Dr Kainth and Dr Verma have developed and validated a “Services Perceived Value Scale” in the context of services industry. Dr Waychal and his co-authors have constructed an empirical model of innovation to consider the multidimensional characteristics of individuals and the parameters of surrounding ecosystem.

We are confident that the research papers appearing in this issue of JAMR would provide insights as well as direction for new research in the respective areas of management.

Surendra S. Yadav and Ravi Shankar