Week 1-Lecture 1 : Introduction to Sustainable Development and Sustainability

Hello, welcome to the first session on Business
and Sustainable Development. Before getting into the detail of session
1 what are we going to discuss in session 1. Let me give you outline what were going to
deal in this course in every week. So, week 1 we will start with Introduction
to Sustainability we will find out what are the key issues, the business implications
and firm s responses. Then week 2 we will get into the Sustainability
Tools. We will try to pick one or two tools from
each of this sustainability tool that is assessment, sustainability assessment tools, sustainability
management tools and sustainability reporting tools. Then in week 3 we will take few example of
the Sustainability Standard. We will understand what it is and how it works
and also we will introduce the different kind of corporate strategies those are being used
in the context of sustainability.

Then in week 4, we will understand that how
beyond firms also sustainability can be maintained that is how the supply chain can be green
or how the supply chain can be sustainable. Then we will understand, what are the market
associated with the sustainability. Mostly we will look at what are the startup,
what is the role of the private sector in the sustainability. Also what are the new financial instrument
that has come because of this sustainability. And also at the end of it we will try to bring
a synthesis of whatever we have discussed in the sustainability.

And we will see what are the new perspective
that we can add through this course. Now in this session we will understand what
is sustainable development, what is sustainability. Most of us we know typically what is sustainable
development or what is sustainability. But we will try to see how this definition
of sustainable development, what it was earlier and when it was widely accepted and also we
will try to see what are the different dimensions associated with the sustainability. And then we will see how the sustainable development
that is evolved over a period of time.

Now let me start this course with the with
a picture that was created this is a picture of a sand art that is created by Sudarshan
Pattnaik whom we must be knowing, he is a sand art artist and he created this sand art
in the Pristine beach of Puri during the last World Environment Day that is in the 5th June
2021. And the picture gives three words that is
reimagine, recreate and restore and the picture speaks itself and this is what the essence
of this course what we are going to deal with. It is all about sustainability where we have
to reimagine the things. We have to recreate the things and we have
to restore whatever we have damaged or whatever we have degraded. Now, coming to the fact that what we understand
is the sustainable development. So, if you ask anyone possibly the answer
what we get someone just say that it may be eliminating waste, someone talks about quality
of life.

Someone say any eco-friendly, whatever is
eco-friendly, environmental friendly that is sustainable development. Some say that the green issues related those
are sustainable development, some talks about carbon neutral, some talks about less consumption
and I have picked up those words mostly from how we understand sustainable development. So, more or less we understand, what is sustainable
development and we use the word what we feel that ok action can be over there or the agenda
can be over there. So, it like you take the example of your biodegradable
or you take the example of a renewable.

So, all this comes from the fact that what
you feel that the action is needed on this front or action is needed in the other front
and that is what typically the sustainable development is. Now, let us see how we define the sustainable
development or what are the formal definition available for the sustainable development. So, the first one this is a Haida Proverb
and this says that the way we define this is that, We do not inherit the earth from
our ancestors. We borrow it from our children .
And the widely accepted or the popular definition what for the sustainable development it came
in 1987 from the Brundtland Commission . This is the UN World Commission on Environment
and Development. And this says that Sustainable development
is a development that meets the needs of the present without compromising the ability of
future generations to meet their own need .
And so, till now this is considered to be the most widely accepted definition of the
sustainable development where two things are being emphasized.

One the need how we should meet the need and
second it is not about only the present generation also it is about the future generation. Now, going further, let us see how we define
sustainability. So, I have taken a definition of Viderman
1995 which says that sustainability is a vision of the future which focuses on two things;
one it is a set of values and second it is ethical and moral principle. So, at a later point of time we see that how
there is also an argument available from an economist that whether sustainability is ethical
or whether sustainability is moral. But for the time being let us take this definition
which says that sustainability is a vision of the future which focuses on set of values
ethical and moral principles.

And this set of values and the ethical and
moral principle by which to guide our actions. So, mostly sustainability is all about our
actions when it guided by a set of value and ethical and moral principle. So, by this now what is sustainability? Sustainability is a community s control and
prudent use of all form of capital. So, now we are introducing the jargon that
is capital and through which we are trying to understand what is sustainability. So, sustainability is what, how the community
controls the different form of capital and how they do a prudent use of this forms of
capital that is all about sustainability. So, there have been different types of capital
like physical capital, human capital, natural capital, social capital and cultural capital. And all this why there is a need for control
and prudent use of all form of capital to ensure that present and future generation
can attain a high degree of economic security and achieve democracy and by it is when they
achieve the high degree of economic security and achieve democracy by maintaining the integrity
of ecological system upon which all life and product depends on. So, if you look at the entire slide how we
are trying to understand sustainability? Sustainability is mostly we need to we are
highlighting two things; one how we should use the available capital.

How we should control this, how we should
use this and this should be guided by the fact or the use or the control should be guided
by a set of value and the ethical and moral principle. Now, let us understand a little bit more about
the different types of capital which comes in the definition. Now, how do we define capital? Capital is typically if you say this is the
kind of inputs right. It is a kind of a factor of production. So, capital is the stock of assets that serve
as a factor of production. So, it is one of the input in our production
process and what is the role of a capital? The role of a capital is that it increases
the rate of output of goods and services when we use this as the inputs and it can depreciate
this capital can be depreciate over a period of time and it can be also augmented through
the investment.

So, mostly capital is the input which is used
in the production process, it may depreciate and it may augmented through the investment. Now let us see what are the different types
of capital what we have defined in the previous slide. So, in case of physical capital typically
we take the built environment or the man-made capital; technology, the built environment,
all this form of man-made capital that comes under the physical capital. Human capital; our education, typically the
proxy of knowledge what we get through our education, the experience of the working in
the different fields and also health. So, these are the three main thing what we
take in the in the context of the human capital education, experience and health. Then we take the natural capital and the natural
capital we take all ecosystem resources air, water quality, forest. So, it includes everything whatever comes
under the ecosystem resources.

Social capital where we take the proxy for
our social capital when we take the variable for this is social connection, social networking. And cultural capital is the body of folklores
supporting our world view and our role that comes under the cultural capital. So, some point of time it is easy to operationalize
what comes under the physical capital, human capital or natural capital, but it may be
little indirect when it comes to the social capital and cultural capital, but they do
play a role in our operationalizing the sustainability ok. Now many times you many times you must have
heard that we use the word sustainability and sustainable development interchangeably
right. So, sometimes we say it is sustainable development,
sometimes we say sustainability. So, there are difference between sustainable
development and sustainability, some point of time it looks very finer. But we go in depth there is a significant
difference between the sustainable development and sustainability. Now, I have picked a few differences that
have been cited by a different in the different blog or the different site and we will see
what how they define or how they differentiate the differentiate between sustainable development
and sustainability.

So, the first one is from UNESCO and here
the way they brought the difference is sustainability is often thought as a long-term goal that
is more sustainable world and sustainable development refers to many processes and pathway
to achieve it. So, sustainability development sustainability
is a long term goal mostly when you talk about a sustainable world in next 20 years then
30 years then becomes the or 50 years that is sustainability, but sustainable development
talks more about the processes and the pathway. So, the typical example of processes and pathway
over here is that when we say that we are adopting a sustainable agriculture or sustainable
forestry or we are talking about sustainable production, consumption, good government,
research and technology transfer, education, training. So, these are all this comes under the process
and the pathway. The second one is from a blog by blog from
Maryville and how they have defined or how they have identified the difference between
these two terms.

So, for them sustainability is a broad term
that describes managing resources without depleting them for the future generation. So, it is a broadly they see that sustainability
where we are managing the resources without depleting them for the future generation. And, how they have defined sustainable development
that is the process for improving long term economic well-being and quality of life without
compromising the future generations ability to meet their need. So, the difference over here is that one is
it is a broad term about managing resources and secondary about this is a process for
improving the long term economic well being without compromising the future generation
ability to meet the need.

So, here also the difference is one is a broader
term and second one is getting into the process. If you come to the third difference or the
third kind of difference what I picked up this is also from another blog which says
that, sustainability is a broad concept. But; however, it can be simply put as the
ability to meet the needs of the present without compromising the ability of the future generation. And how is the sustainable development, it
is a sum of actions, decision, innovation towards improving the quality of human life
within the capacity of supporting ecosystem. So, mostly from this three opinions what we
have taken about the difference between sustainable development and sustainability if you see
in every case sustainability is more about a broad term, broad concept, long term goal
and sustainable development is more about process, pathway, actions, decision and innovation.

But what is important is that we need to integrate
this sustainability and sustainable development for designing the effective and effective
short term and long term strategy. So, possibly mostly one of it is goal broad
concept, second one is the process action, but the integration of both needed when we
are designing the short term and long term strategy then only we can see the so called
sustainable world ok. Now let us understand sustainability more
by understanding what is the dimension associated with the sustainability. So, there are mostly three dimension of sustainability;
one is environmental sustainability, second one is the economic sustainability and third
one is the social sustainability.

Now, what is environmental sustainability? Here typically we ensure that the consumption
of natural resources such as material, energy fuels, land, water should be at a sustainable
rate. So, mostly we are ensuring a sustainable rate
of consumption in case of environmental sustainability. And let me give you a small example that how
do we ensure this, possible these are the jargon you must be hearing at the different
from different places we aim for Net Zero Carbon or the principle of circular economy
or the circularity principle through which we try to ensure that the way we are consuming
our natural resources that has to be at the sustainable rate. Now, second one is the second dimension economic
sustainability, now what it requires or what it means. Economic sustainability requires that a business
or a country uses it resources efficiently and responsibly so that it can operate in
a sustainable manner to consistently produce an operational profit.

pexels photo 6289065

So, here also we need to highlight or we need
to remember two things; one the resource use has to be efficient and second since we are
talking about economic sustainability second must thing is that it should be producing
the operational profit or it should be getting the operational profit. So, the way we use resources or the efficiently
the way we use resources so that it can be more sustainable and consistently it should
give us the operational profit. The last dimension or the third dimension
of sustainability is social sustainability. So, what is social sustainability? Ability of society or any social system to
persistently achieve a good social well-being of a country of an organization or a community
are maintain in the long run.

So, social sustainability is what it is about
achieving the good social wellbeing for the in different scale like in a community, like
in an organization or in the country as a whole and also one is achieving the social
well-being and second is to maintain it in the long term. Now, when we are talking about this three
dimension of this sustainability that is; social, economic and environmental sustainability
now what we achieve when we maintain this sustainability.

So, when we maintain social and economic sustainability
possibly equity the equitable is the achievement, when social and environmental sustainable
it is about bearable and when economic and environmental sustainability it is viable. But the what is most important over here is
that we need to balance economic, social and environmental then only we can achieve the
true sustainability and true circular economy ok. Now this three dimension of sustainability
is beautifully explained through a 3 legged sustainability stool in the by Bob Willard
in the in his book New Sustainability Advantage.

So, this three dimension each consider as
the 1 or 3 legs of this sustainability tool and here if you look at there is a economic
leg, there is a environmental leg and the social leg. So, in case of economic leg you find typical
indicator of economic leg is good job, fair wages, security, infrastructure, fair trade
all these comes under the economic leg. Environmental leg it is it includes zero pollution
and waste, renewable energy, conservation, restoration. And social leg is how we are performing in
terms of working condition, health services, education services, community culture, what
is the status of the social justice. So, this entire three dimension is understood
through these 3 different leg and each leg consists of those indicators which represents
the economic well-being, environmental well-being and social well-being and at the end of it
what we get. We get the better quality of life, genuine
wealth and genuine progress that is the end outcome when we are doing well in all these
three dimension that is economic, environmental, social.

Now, this dimension of sustainability if you
look at this is again explained through the nested dependency model and all these three
indicator in fact, they are dependent on each other. So, society is dependent on environment, economy
is dependent on society. So, in a bigger scale it is environment; a
subset within that environment is society and subset within the society is our economy.

And all these three are interrelated possibly
they will not be able to function if they are not dependent on each other. Now, little bit extending more on this sustainability
that is mostly in the context of corporate sustainability that how these three dimensions
are explained further. So, must be hearing the different jargon those
are being used these days. So, possibly we discussed about sustainability
what is sustainability, what is sustainable development, but the newest jargon or the
different jargon over a period of time what we keep hearing is that ESG, that is ESG investment,
ESG reporting. So, which says that Environment, Social and
Governance. Then CSR that is Corporate Social Responsibility,
then CR that is Corporate Responsibility, then green triple bottom line 3 Es, 3 Ps these
are all the jargon those are being used and, but the end of it what it calls that these
are all sustainability.

So, it is when you say environment, social,
governance here also they are trying to see that how you achieve the sustainability. Or how we should use what is our corporate,
social, responsibility and how we should use this to achieve the sustainability. Similarly, corporate social responsibility
then corporate social sustainability, then social responsibility all these green triple
bottom line at the end of it the achievement what we get that is the sustainability. So, again bringing this three dimension is
that when we say 3 E s or 3 P s. So, when we say 3 Es that is economy, environment
and equity, when we say 3 P s this is profit, planet and people. And what are the indicator or what are the
variables associated with each of it, when we say economic and profit typically it is
about economic growth. Mostly all form of economic growth, jobs that
is the indicator of employment, taxes, product services available in the market, when you
talk about the second E and second P that is environment and planet that is eco efficiency,
eco effectiveness that brings the variables for the environment and the planet.

And in the third one when we talk about the
third E or third P that is equity and people and that is employees, community, culture
all this thing that comes under the third E and third P. So, mostly the sustainability
is about the 3 E s that is economy, environment and equity, economy is representing the economic
part of sustainability and environment is representing the environment part of sustainability
and equity is representing the social part of the sustainability ok. Now, let us see how this different form of
capital is again explained through this so called sustainability stool.

So, if you remember when we were trying to
define sustainability we said that this is the control and prudent use of all forms of
capital. So, here how this being managed so, at the
end of it whether you follow a model of 3 E whether you follow a model of 3 P it is
end of end of the day it is about how do you manage the asset. And what is asset? Asset is nothing, but the stock of asset that
comes under the different form of capital that is natural capital, human capital, social
capital, financial capital and manufactured capital.

So, at the end of it how the asset management
is being done or how in a bigger sense how the capitals are being managed, there are
different form of the available capital how these are being managed that is all about
sustainability. Now, why this concern is there? Typically, why are we worried about the sustainable
development or sustainability? We will have more discussion on this when
we try to understand why sustainability is important. But at this moment mostly there is a concern
because there is a unsustainable environmental and social trend. And why there is a unsustainable environment
and social trend? Because we know that the destruction is happening
for habitat, there is a resource degradation, resource depletion, then we find that few
of the species we do not see at all. Because over a period of time you do not find
the species anymore, then there is environmental pollution in the different form that is air,
water and also the land and different kind of the pollution. Then there is a pressure of population although
you will find that in some cases it is being argued that yes population is somehow it is
the growth is not happening how it was happening before 50 years these are the fact, but still
there is a pressure of population.

And because of our increase in the consumption
there is over harvesting and because there are many more reason that why there is a concern. But these are few of the trends or few of
the trends related to the environment and environmental and social which leads to the
concern of the sustainability. Now, because of this concern the model what
we follow at this moment when it comes to the business model or the economic model it
is unsustainable, because we talk more about take make and waste model. So, why we bring it take make and waste model? Because in take typically we degrade the nature
why physical means we use up the resources then we make whatever we wish to make in terms
of the products. And why we make more? Because there is a overconsumption and we
are undermining the people s ability to meet their needs.

And what is the end result? End result is that there is a increasing concentration
of waste from manufacturing use and disposal. So, what we are doing in this unsustainable
model, we are taking the resources making sometimes we are doing the overconsumption
also and finally, we are getting into the waste. And at the end of it we are not doing anything
to mostly in the unsustainable model we are not trying to see that how the waste can be
used because it is more about waste from manufacturing use and the disposal. Now, let us say that how the Brundtland Commission
they have given the definition of the sustainability, but how they have operationalized this. So, they have identified seven strategic imperative
for the sustainable development. This has been taken from Hackett 2006.

And, what are the strategic imperatives? Reviving the economic growth and it is not
only reviving the economic growth also it is changing the quality of the growth. Then, meeting the essential needs for job,
food, energy, water and sanitation, the most basic needs ensuring a sustainable level of
population, conserving enhancing the resource base, reorienting technology and managing
risk, merging environment and economics in the decision making. So, it is not only about looking at the profit
and making a decision for the production also need to see that how we are what is the impact
on the environment or how what possible impact is going to be there for the environment and
then we should make a decision based on the production. And the possible solution that when we are
operationalizing the principle the sustainable development principle or sustainability principle
from make take and waste model we will get into the sustainable borrow use and return

So, although we have not achieved fully you
will find many few cases the sustainable borrow use return models are already started. Now, what is this model? This model says that your you borrow the resources
from the environment rather than take and they also try for a radical resource productivity
and that way it will create less waste and whatever we are borrowing the resources from
the ecosystem we should also invest that we create more natural capital. So, once we borrow the resources from the
environment we use rather than make we will use. And why the word use is over here? Because, it is about responsible consumption
and support for people ability to meet their need. Rather than overconsumption based on the need
the responsible consumption will happen and based on that the production will happen based
on the resources taken from the environment. And finally, rather than waste it is return
and how the return would be possible, when you go for a ecological redesign and the closed
loop production where the waste part of the production process will again go back to the
loop of the production process in the form of the inputs.

And in this case we are reducing the waste,
we are not doing overconsumption and whatever we are borrowing from the environment in the
form of resources what we cannot give back we should also we are also planning for a
alternate investment in the form of the natural capital. And in this way in the sustainable borrow
use return model if we are going to do it in a large scale.

So, whatever we are thinking of a sustainability
goal or the sustainable development that we are going to going to achieve. So, till now what we have done, we have understood
what is sustainable development, what is sustainability, why there is the concern, what is the difference
between sustainability, sustainable development and also about the difference between these
two model that is take, make and waste. And also when we operationalize the sustainability
principle or the sustainable development principle how we can achieve sustainability by using
this sustainability borrow, use and return model. So, what we will do in the next session, we
will try to see how the sustainable development as a concept that has evolved over a period
of time. Thank you..

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