Given the multiple crises the world is facing in water, energy, food, climate change and even the financial sector, it is becoming increasingly clear that sustainability has to be a prerequisite for all future development. According to Elinor Ostrom, the Nobel Laureate in Economics, “Sustainability at local and national levels must add up to global sustainability. This idea must form the bedrock of national economies and constitute the fabric of our societies”.
Sustainable development is of course defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Report 1987).
There are many ways in which the private sector can promote sustainability, and one way is ensuring adequate levels of benefit sharing, transparency and accountability. The global Association of Chartered Certified Accountants (ACCA) has been promoting sustainability reporting throughout the Asia-Pacific region, Europe, Africa and North America by rewarding companies who send in the best sustainability reports. These awards have helped raise the profile of corporate transparency and responsibility issues within those countries.
The ACCA awards ultimately help to highlight the business case for sustainable development. While world leaders gathered at the Rio Summit in June to discuss the green economy in the context of sustainable development and poverty eradication, in Pakistan, the Association of Chartered Certified Accountants (ACCA) in collaboration with the World Wildlife Fund (WWF) organised a Green EconomyForum in Karachi. This was held in conjunction with the ACCA WWF Pakistan Environmental Reporting Awards, which annually reward companies in Pakistan for their sustainable reporting and corporate transparency. This year, three awards were given out — to ICI, Hinopak and Qarshi — for their excellence in sustainable and environmental reporting.
According to ACCA’s Vice-President, Martin Turner, who spoke at a side event at the Rio Summit, “Distinct and credible reporting of environment, social and governance disclosures have an important part to play in encouraging a positive approach to sustainable development by business and the adoption of long term and socially responsible investment strategies by investors”. The idea behind the green economy, one of the core themes of the Rio Summit, is to shift investments away from business as usual to green activities making economic sense.
The green economy will not only play a crucial role in the future of the global community but is of significant relevance for Pakistan as well. Today, Pakistan is considered one of the top countries in the world affected by climate related disasters and this disaster prone nation urgently needs to make the shift towards greater sustainability.
Sustainability reporting and Corporate Social Responsibility (CSR) activity have grown rapidly in the private sector in the last 10 years in Pakistan. When the ACCA WWF Pakistan Environmental Reporting Awards first started in 2002, only around five companies sent in their reports — this year, around 78 companies participated. According to Arif Mirza, the head of ACCA in Pakistan, businesses in the country have begun realising the potential for a green economy and have started seeing themselves as agents of socio-economic change — hence the increase in the number of sustainability reports over the years. While there is still a preference for short-term gains over sustainability, he pointed out: “there is also a growing demand for responsible products”.
However, there are virtually no regulations in place to oblige businesses to follow more responsible practices in Pakistan. Recently, the Securities Exchange Commission of Pakistan (SECP) has come out with voluntary guidelines for CSR reporting for companies, which is a start in the right direction.
Given the profit motive of private companies, can they make the shift towards sustainability? Many large corporations with a presence in Pakistan now have sustainability targets when it comes to sourcing raw materials like cotton, palm oil, paper, sugar and tea. Ali Habib, the head of WWF-Pakistan gave the example of the Better Cotton Initiative being implemented by WWF-Pakistan whereby international companies source cotton from Pakistan that has been grown using less water and pesticides. The first bale of cotton that was branded “Better Cotton” was produced in Pakistan in 2010. Now the initiative has spread to India and China.
Amongst the many recommendations that flowed from the conference sessions of the Rio Summit was that asking whether the public or private sector should take the lead in implementing sustainable development is a false dichotomy. We need both to move us forward. In the words of Elinor Ostrom, who recently passed away just before the Rio Summit began: “We have a decade to act before the economic cost ofcurrent viable solutions becomes too high. Without action, we risk catastrophic and perhaps irreversible changes to our life-support system.
Our primary goal must be to take planetary responsibility for this risk, rather than placing in jeopardy the welfare of future generations”.