Decision making in a time of crisis

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 8 November 2011

Citation

McIntosh, M. (2011), "Decision making in a time of crisis", Sustainability Accounting, Management and Policy Journal, Vol. 2 No. 2. https://doi.org/10.1108/sampj.2011.46802baa.001

Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited


Decision making in a time of crisis

Article Type: Guest editorial From: Sustainability Accounting, Management and Policy Journal, Volume 2, Issue 2

This special edition of the Sustainability Accounting, Management and Policy Journal follows a call for papers and a conference on “Sustainable decision-making in a time of crisis: public and private perspectives” held at the United Nations University (UNU) Headquarters in Tokyo in November 2010.

We are at the point where we can begin to answer the question posed by Mill (1848, p. 390) in 1848: “Towards what ultimate point is society tending by its industrial progress? When the progress ceases, in what condition are we to expect that it will leave mankind”. Progress has not ceased and some countries have not industrialised but the model of industrial capitalism that Mill was referring to now bestrides the planet. At the start of the twenty-first century the crisis point has been reached in terms of resource depletion, population, the climate change prognosis, nuclear proliferation and poverty. The world faces severe economic, social and environmental risks and business-as-usual is not an option. There are few who believe that the current model of economic growth-at-any-cost and the current business model of bigger-is-better can prevail. As economist Layard (2005) says that economic growth maybe triumphant, but to what point? and he is even echoed by currency speculator Soros (1998) who has said that market fundamentalism is itself naïve and illogical and that the common interest is not well served by market behaviour. Global concerns over climate change, environmental degradation and social inequality indicate how critical it is for political and business leaders to be prepared to think and act in this new challenging environment. A new way of doing business that incorporates these risks into its practices, strategies, and culture is needed for sustainable enterprise. A sustainable enterprise flourishes within environmentally sustainable limits, enhances social equity, and embraces a sense of futurity. The papers in this issue reflect the issues of transition and transformation to a sustainable enterprise economy, a voyage full of uncertainty, change and learning. There could be no more appropriate place to publish these pieces as they tackle accountability, sustainability, resource depletion, change and transition, and the management of all of the above. There are some enlightened business and political leaders who fully understand the necessity for change. Their problem is that the system that made them leaders is working against their desire for change. So it is that the CEO of one of the world’s largest and most profitable mining companies, Rio Tinto’s Albanese (2010) asked the question about the elephant on the world stage: “The issue is how to make public and private policy for something that won’t really impact us for 30 to 40 years”.

There are many examples of policy on sustainability issues not being realised but when humanity is faced with the necessity for adaptation to resource depletion and climate change, we need to ask “why is change so difficult?” As Porritt (2006) says in Capitalism as if the Earth Matters what is remarkable is the failure of politicians to start planning in any way for this inevitable transition, or even to start preparing their electorates for its inevitability. Lovelock (2006), the inventor of the Gaia hypothesis, poses the same question about humanity, which he says is wholly unprepared for its greatest trial. The acceleration of the climate change now under way will sweep away the comfortable environment to which we are adapted. Flannery (2010, p. 275) in his latest book, Here on Earth: An Argument for Hope, is bleak and optimistic at the same time in his prognosis: “if our civilisation does survive this century, I believe its future will be profoundly enhanced, for this is the moment of our greatest peril”. What are the problems, where is the inertia? Or is it as Hamilton (2010) says in Requiem for a Species: that the new narrative will reflect a world no longer subject to human will, but governed by forces largely beyond its control.

Three of the articles in this special edition reflect the location of the conference in Tokyo, the hub of the Asia Pacific region. The first paper, “Towards CSR and the sustainable enterprise economy in the Asia Pacific region”, presented by Susan Forbes and Malcolm McIntosh from Griffith Business School, is the start of a growing research and action project which is working on establishing a net balance indicator for a sustainable enterprise economy by looking at a mix of the take up of voluntary corporate responsibility initiatives and national sustainability and social cohesion indicators, in this case in the Asia Pacific region. The make up of the audience contributed to significant feedback which will be helpful for the future of this work as it included the UN community, academia, business people and local civil society activists. The paper concludes that there is a need for a universal measure of wellbeing that takes into account corporate moves in the direction of sustainability.

The Japanese eat more seafood per capita than any other people in the world, twice as much as the Chinese and three times as much as the average American. In “Role of World Wildlife Fund (WWF) and Marine Stewardship Council (MSC) in seafood eco-labelling policy in Japan” by Darek Gondor from the University of Tokyo and Hideka Morimto from the Ministry of the Environment of Japan, a fascinating case study emerges of evolving consumer habits and the relationship between seafood eco-labelling, consumer change and government action, and inaction. The authors conclude that government can play a useful role in supporting civil society engagement in the creation and maintenance of eco-labelling. “Sustainable business model for biofuel industries in Indonesia” by Joni Jupesta from the UNU, Yuko Harayama and Govindan Parayil addresses the issue of peak oil as it grapples with the issue of the diversion of agriculture material from food to fuel use. The paper points out that the biofuels are in their infancy in Indonesia at the moment, as in many parts of the world, and that it is possible for there to be “a biofuels industry profitable in a sustainable way whilst considering the interests of stakeholders”.

Moving from the Asia Pacific region Victoria A. Bakhtina, from the IFC, writes in her paper, “Innovation and its potential in the context of the ecological component of sustainable development”, of the need for “a global ecological regulatory framework”. Her paper emphasises the need to recognise innovation at the national level, to compare and contrast with other innovative economies in order to aid the transition towards a sustainable enterprise economy, a concept that is not well developed at present and there is more work to be done. Jem Bendell, Anthony Miller, and Katharina Wortmann from Griffith Business School, and colleagues at UNCTAD, in their paper “Public policies for scaling corporate responsibility standards: expanding collaborative governance for sustainable development” map the innovative new governance that has developed between multi-stakeholders, including business, government and civil society, which have presented “benefits, risks and challenges for sustainable development”. This paper links well with Susan Forbes’ paper, cited above, as it suggests that new governance is evolving which could and should be able to help managing the global commons by measuring human impact, and these new architectures need continued focus, testing and experimentation to achieve buy in. As Bendell et al. argue, governments need to recognise multi-stakeholder initiatives that they themselves may not have initiated or been involved in at an earlier stage. Governance is about partnership and engagement rather than command and control. A similar discussion of the necessity to standardise new measures and reporting of climate change information is discussed by Julie Cotter, Muftah Najah, and Shihui Sophie Wang from the University of Southern Queensland and Australian National University in “Standardized reporting of climate change information in Australia”. Their discussion relates to one Australian company, which has a leading record and plaudits for its climate change reporting, but has implications for others and for future research in this area.

In line with the theme, the papers explore the links between sustainability and peace, new global governance and the pressing challenges of climate change and economic and financial de-stabilization. All the papers in this special edition have been reviewed and revised and have been through a high-quality peer review process.

Overall, this set of papers, makes a significant contribution to understanding the risks, challenges and opportunities that we are all on towards a more sustainable economy. Whatever readers’ specific interests are, something for everyone can be found in this special collection of articles.

Malcolm McIntosh, Vesselin Popovski, Masaru YarimeGuest Editors

References

Albanese, T. (2010), January, available at: www.mckinseyquarterly.com/Managing_water_strategically_An_interview with_the_CEO_of_Rio_Tinto

Flannery, T. (2010), Here On Earth: An Argument for Hope, Text Publishing, Melbourne

Hamilton, C. (2010), Requiem for a Species, Earthscan, Oxford

Layard, R. (2005), Happiness: Lessons from a New Science, Penguin Group, New York, NY

Lovelock, J. (2006), Revenge of Gaia: Earth’s Climate Crisis and the Fate of Humanity, Basic Books, New York, NY

Mill, J.S. (1848), Principles of Political Economy with Some of Their Applications to Social Philosophy, Vol. 2, Kessinger, Whitefish, MT, reprinted (2004)

Porritt, J. (2006), Capitalism as if The World Matters, Earthscan, Oxford

Soros, G. (1998), The Crisis of Global Capitalism: Open Society Endangered, Public Affairs, New York, NY