Sustainable development is seen by social scientists as an economic, business and market issue. It is about creating and retaining businesses through innovative technology-centred investments.
But this requires a paradigm shift in corporate boardrooms to view poverty as an opportunity rather than a problem. Without tackling poverty, there can be no sustainable development. And surmounting poverty is not a problem of resources but a problem of imagination, management gurus say.
These views were expressed forcefully at the CEO Forum, attended by 60 leading Indian and foreign companies at the Delhi Sustainable Development Summit 2006 (DSDS) hosted by The Energy and Resource Institute (TERI) and co-sponsored, among others, by the World Bank and the Switzerland-based World Business Council of Sustainable Development.
The participants included delegates from South Asia and journalists from several countries including Pakistan.
And the topic chosen for the TERI’s sixth summit was “Linking across MDGs (Millennium Development Goals: towards partnership and governance”.
Noting that the poor depend on natural resources for their livelihood and improvement in their quality of life is linked with productivity of natural resources, the participants agreed that there are opportunities for business in environmentally sustainable development; doing away with the “sins of economic growth” like emission of CO2 from energy consumption, soil degradation from Green Revolution, arresting depletion of forests, etc.
In short, things have to be a moved from mere exploitation of natural resources to the nurturing of natural resources by promoting biodiversity.
Sustainable development is about “mitigation” and “adaption” to do away with imbalances between supply and demand particularly of energy and water by developing new technologies for efficient use of these resources.
The corporate executives were informed that there are immense business opportunities in improving the livelihood of the poor. Some two-thirds of the population, or about four billion people live on per capita income of $1500 per annum, placing them at the bottom of economic pyramid. They represent a potential multi-billion dollar market for firms.
Development has to be made socially sustainable by extending better health and education facilities, by providing clean water to fight water-borne diseases and carbon-free energy.
Productivity gains from healthy educated individuals would be immense. This requires a special focus on a number of sectors- water, health, gender and energy- and investment in human capital and natural resources.
But the challenges in the way of sustainable development are also enormous. It has to be a fundamentally different model, says Dr Djordija Petkoski, programme leader, corporate governance World Bank. The single-track approach of economic growth has to balanced by addressing environmental and social concerns.
To pull back from the current development pathway, Prof. C K Prahalad, founder, The Next Practice, USA called for “ a paradigm shift for global governance for sustainability, centred around science and technology, multilateral treaties, incentives for research and development, market incentives and public oversight over networked world.”
Speaking as a keynote speaker at the CEO conference, Prof. C K Prahalad advised firms to develop new technologies/products at one-hundredth or one-fiftieth of market price of the international quality products.
The technologies suited for the people at the bottom of the economic pyramid have to be produced at radically low prices that are affordable for the low income groups. The products have to be world class quality with a range of choices.
Housewives in rural areas could be provided energy efficient ‘Chohla’ fuelled by different energy sources and the farmers could be served with various technologies for more efficient use of water and energy.
Prof. Prahalad said the 20th century was focused on political freedom and the 21st century seeks economic freedom as a paramount objective. Spelling out his concept of “democractizing commerce” he observed every individual must have access to the benefits of the global economy.
The experiences of leading Indian and multinational companies working in co-operation with NGOs were also discussed at the Summit. TERI put up a demonstration two types of solar fuelled lanterns priced at Indian Rs3000 and Rs1550 a piece. It has also designed energy-efficient buildings.
What the companies can do to end poverty was also demonstrated by the efforts being made by Mrs Rajashree Birla, Chairman, Aditya Birla Group for improving the quality of life index.
“We work in 3700 villages close to our plants which are spread across of our nation” in partnership with the government, district authorities and reputed NGOs, she told the Summit delegates.
Nearly three years ago, the group decided to develop model villages in a phased manner. About 200 villages have been targeted across the country where more than 60 per cent of the population is below poverty line. Of these, 71 villages have been adopted by Hindalco, the group’s major in India.
The group’s integrated rural poverty programme includes self-reliance through sustainable livelihood re-coursing to agriculture, water-shed development and farmer-focused initiatives.
Aditya Birla Centre for Community Initiatives and Rural Development, the group’s apex body, is responsible for development projects. As CIRD Chairman Mrs Birla oversees the group’s social and welfare driven work across 30 companies.
Multinationals like Unilever and Shell are also engaged in poverty alleviation efforts. Shell has identified income generation projects and shared these with local communities and the NGOs.
Initially, bank loans were granted with the support of the UNICEF and company guarantees to finance projects. Gradually, the banks gained confidence in local business skills and now they do not look to intermediaries like Shell for loan guarantees.
The government of India has also launched a phased programme for guaranteed employment to the rural jobless for 100 days in a year with no budgetary constraints. If jobs cannot be provided, the compensation is in the form of jobless allowance.
Indian officials claim that the government recognizes the right of employment and employee guarantees ensures transfer of incomes to the poor. A participant said that this scheme weakens the archaic power structure in the rural communities.
Mr Vikram Singh Mehta, Chairman, Shell Group of Companies in India said the NGOs should focus on practical work in developing local entrepreneurial skills and modern technology for clean and efficient energy use.
The company has also taken initiatives for providing solar energy to rural households.
And the Delhi Summit has called for ensuring a participative, integrated approach -based on innovation, inclusiveness, transparency and the spirit of sharing and partnership-in all programmes linked to the MDGs.