Business Case For Sustainable Development

Sustainable development

Sustainable development

The most broadly accepted criterion for corporate sustainability constitutes a firms efficient use of natural capital. This eco-efficiency is usually calculated as the economic value added by a firm in relation to its aggregated ecological impact. This idea has been popularized by the World Business Council for Sustainability consulting Development (WBCSD) under the following definition: "Eco-efficiency is achieved by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity throughout the life-cycle to a level at least in line with the earths carrying capacity."

Similar to the eco-efficiency concept but so far less explored is the second criterion for corporate sustainability. Socio-efficiency describes the relation between Sustainability consulting firms a firm's value added and its social impact. Whereas, it can be assumed that most corporate impacts on the environment are negative (apart from rare exceptions such as the planting of trees) this is not true for social impacts. These can be either positive (e.g. corporate giving, creation of employment) or negative (e.g. work accidents, mobbing of employees, human rights abuses). Depending on the type of impact socio-efficiency thus either tries to minimize negative social impacts Sustainable supply chain (i.e. accidents per value added) or maximize positive social impacts (i.e. donations per value added) in relation to the value added.

Business case

Another problem of natural and social capital deterioration lies in their partial irreversibility. The loss in biodiversity, for example, is often definite. The same can be true for cultural diversity. For example with globalization advancing quickly the number of indigenous languages is dropping at alarming rates. Moreover, the depletion of natural and social capital may have non-linear consequences.

Consumption of natural and social capital may have no observable impact until a certain threshold is reached. A lake can, for example, absorb nutrients for a long time while actually increasing its productivity. However, once a certain level of algae is reached lack of oxygen causes the lakes ecosystem to break down suddenly.

by: sustain

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