Sustainability and the Private Sector
By: Marshall B. Distel
In recent years, the concept of corporate sustainability has come to the forefront of debates on how to achieve global sustainability. Corporate sustainability is often discussed in conjunction with sustainable development and corporate social responsibility, but it can be defined simply as a corporate management paradigm that has evolved away from the traditional growth and profit-maximization model into a new model that recognizes the importance of environmental protection, social equity and economic development (Wilson, 2003).
Corporations are becoming more active than ever before when it comes to pursuing initiatives to advance global sustainability. As issues related to environmental degradation, humanitarian aid, and economic development have become increasingly prevalent, corporations have started to acknowledge the need to align their business practices with the pillars of sustainability to satisfy the customer, employee and stakeholder expectations (McKinsey Report, 2017).
Sustainable Development Goals (SDGs)
Following the endorsement of 17 Sustainable Development Goals (SDGs) in 2015, world leaders emphasized the importance of including stakeholders from the private sector in planning initiatives to advance global sustainability. The creation of the SDGs served to replace the United Nation’s Millennium Developmental Goals (MDGs) and provided an innovative way to advance global policy on a wide array of sustainable development objectives (Scheyvens et al. 2016).
Unlike the MDGs, the SDGs highlight the need to involve the private sector as an equal partner in the global sustainable development movement. The addition of private corporations as stakeholders at the decision-making table introduces opportunities to utilize their strengths, which include innovation, responsiveness and improved efficiency (Scheyvens et al. 2016). As governments around the world continue to grapple with high national debts and insufficient revenues to address an increasing number of humanitarian and environmental issues, new partnerships with individuals, social groups and the private sector may make it possible to achieve the goals outlined by the United Nations Sustainable Development Agenda (Bergman et al. 2017).
Profit and Sustainability
While employing partnerships between governments and the private sector to fund sustainable development initiatives may seem to be a logical solution, the issue is more complicated than it may first appear. The private sector is a pivotal component of modern civilization that has shaped the world’s physical infrastructure and greatly influenced the social structure of society. However, it is important to note that many private corporations gain their wealth and power through the extraction of natural resources, often at the expense of marginalized populations (Bergman et al. 2017).
Is it realistic to think that corporations that have traditionally served as profit-motivated entities would work voluntarily towards a common goal of enhancing sustainable development? Some studies have cast doubt on the ability of the private sector to abandon the business-as-usual model for one that truly makes progress towards global sustainability. For example, one study found that a group of businesses had interpreted the Brundtland’s report on sustainable development principles as a system to pursue win-win situations rather than a way to enhance social and environmental sustainability (Scheyvens et al. 2016). Overall, there is a concern that private sector interest in sustainable development may, in fact, be motivated more by self-interest than a desire to make a difference in the world.
The Risks of Influence
The risks of giving corporations the ability to influence global planning related to sustainable development are well known. Even though the private sector has traditionally held a bottom-line focus and has even played a significant role in exacerbating social inequalities and contributing to environmental degradation, the private sector is still needed to support a paradigm shift with regard to sustainability. However, to ensure that the private sector is aligned with a long-term sustainable development agenda, it will be critical for governments to employ regulations in place of options that allow for participation through voluntary initiatives and other soft measures (Scheyvens et al. 2016).
While some corporations are starting to embrace sustainable business models, it is unrealistic to think that the private sector as a whole would be amenable to these models. Therefore, it will be vital for governments to enact legislation that requires the private sector to develop corporate sustainability plans that support global initiatives to enhance sustainable development.
Marshall Distel is a graduate student in Virginia Tech’s Master of Natural Resources program. He expects to receive his degree in May 2019.
The Center for Leadership in Global Sustainability thanks the following photographers for sharing their work through the Creative Commons License: Kenueone, United Nations Photo, and Stockholm Environment Institute.
- Bergman, et al. (2017). “An Empirical Exploration, Typology, and Definition of Corporate Sustainability.” Sustainability9, 753. https://www.mdpi.com/2071-1050/9/5/753
- McKinsey Report. (2017). “Sustainability’s Deepening Imprint.” McKinsey & Company. https://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/sustainabilitys-deepening-imprint?cid=other-eml-alt-mip-mck-oth-1712.
- Scheyvens, et al. (2016). The Private Sector and the SDGs: The Need to Move Beyond ‘Business as Usual’. Sustainable Development 24:371-382.https://www.researchgate.net/publication/299543669_The_Private_Sector_and_the_SDGs_The_Need_to_Move_ Beyond_%27Business_as_Usual%27
- Wilson, M. (2003). “Corporate Sustainability: What Is It and Where Does It Come From?”Ivey Business Journal. https://iveybusinessjournal.com/publication/corporate-sustainability-what-is-it-and-where-does-it-come-from/.
- World Economic Forum. (2015). “White Paper on Business Sustainability: What Is It and Why It Matters.” http://www3.weforum.org/docs/GAC/2014/WEF_GAC_HumanRights_BusinessSustainability_WhitePaper_2014.pdf .