Diplomacy for Sustainability:the roles of business and

governments

EOI Business School, Madrid

Arthur Lyon Dahl Ph.D.European Bahá'í Business Forum (EBBF) ‏

http://www.ebbf.organd

International Environment Forum (IEF)‏http://www.bcca.org/ief

22 February 2008

Diplomacy and Business:Two contrasting cases

• UN Commission on Sustainable Development, 15th session, May 2007

• Montreal Protocol on Substances that Deplete the Ozone Layer 1987

The challenge of sustainability

(Aral Sea, from UNEP, GEO 3)‏

• Sustainability requires fundamental changes in economic and social systems and governance

• Who has the power and resources to act?

• What will be the respective roles of governments and business?

Sustainabilityis a dynamic concept

• Not a goal to be reached but a balance to be maintained in space and in time

• involving complex interactions in the whole system that maintains life on Earth (the environmental component) ‏

• together with the human system (the social, economic and institutional/cultural/ethical components)‏

• that must respect planetary limits

Globalization

• is the logical next step in human evolution, but• Economic globalization is driven by powerful

governments and multinational businesses for their own benefit

• Social globalization is being strongly resisted• Globalization of environmental problems

threatens future sustainability

Some of the major driving forces for planetary

unsustainabilityEnvironment: biodiversity loss, pollution,

climate changeHuman society: energy, population growth,

food, resource depletion, governance failures

Economy: unmanaged globalization, financial imbalances

Ethics: sovereignty, corruption, materialism

BIODIVERSITYLOSS

(Convention on Biological Diversity)

- Human impacts on the natural environment are causing a major extinction event from uncontrollable population and development pressures accelerated by climate change- There will soon be no undisturbed natural ecosystems left, requiring increasing human intervention to maintain some biological diversity

Pollution(image IKONOS – Lang, ESRI 1998)

Man-made chemical pollutants have contaminated the entire

planet, interfering with biological processes, upsetting hormonal balances and immune systems,

causing cancers and other diseases, damaging the ozone layer, and having other as yet

unknown effects

(Basel, Rotterdam, Stockholm Conventions, etc.)

Accelerating Climate Change(UN Framework Convention on Climate Change)

• Global carbon dioxide emissions from fossil fuel have accelerated since 2000

• Rise in 1990s 0.7%/yr; 2.9% since 2000• Three causes: growth in world economy,

rise of coal use in China, weakening of natural carbon sinks (forests, seas, soils)‏

• Growth in atmospheric CO2 about 35% higher than expected a few years ago

Polar areas are changing fastestHalf of the permafrost in the Arctic is expected to melt by 2050 and 90% before 2100, releasing methane14% of the permanent ice in the Arctic Ocean melted in 2005; 23% more in 2007(worst melting ever) opening the North-West Passage; permanent ice in the Arctic Ocean may be gone by 2030Greenland glaciers have doubled their rate of flow in the last few years, raising sea level 0.6 mm per yearSimilar melting of the West Antarctic ice sheet could add another 4 mm per year

There is little time left to actGlobal temperatures have already risen 0.6°C and will probably rise a further 3°, or even up to 4.5-5° by 2100

Ocean temperatures have risen at least 3 km deep

Glaciers and snow cover have decreased; cold days, nights and frost have become rarer; hot days, nights and heatwaves more frequent

Sea level rise has doubled in 150 years to 2 mm/year, and recent polar melting may add another 4 mm/year

Recent surge in CO2 levels from less uptake by plants

We may be approaching a tipping point where runaway climate change would be catastrophic

The most vulnerable areas risking catastrophic collapse this century

• Arctic Ocean and Greenland ice sheet• Amazon rain forest• Northern boreal forests• El Nino affecting weather in North

America, South-East Asia and Africa (3°C rise)

• Collapse of West African monsoon• Erratic Indian summer monsoon

Threat from the Carbon Cycle• How did the homeostatic mechanisms of the biosphere evolve?• Early plant life removed CO2 and added oxygen to the

atmosphere, cooling and making animal life possible• Imbalances caused several major extinctions before enough

carbon was sequestered to permit stability• Are we undoing that by burning fossil fuels?

Overview of the energy challenge(there is no global governance for energy)

• Industrial economy depends on cheap energy• Transportation, communications, trade,

agriculture, urbanization, consumer lifestyle all depend on abundant energy

• Energy demand is rising rapidly and the supply is shrinking

• Adaptation will be extremely expensive and the struggle for diminishing resources globally destabilizing

• A fossil-fuel-based civilization is unsustainable

Energy demand 2005-2030

• Energy needs will grow 50% by 2030• 45% of this in India and China• Coal demand will increase 73%, mostly

in India and China• CO2 emissions will rise 57% (2/3 from

US, China, India, Russia)IEA/OECD World Energy Outlook 2007

The end of the fossil fuel era• At present consumption rates, conventional reserves of oil

will last 40 years, gas 60 years and coal 165-285 years• Geologists estimate recoverable oil reserve 2000 Bb, past

production 980 Bb, known reserves 827 Bb, yet to find 153 Bb, so half already consumed

• Production peaks and starts to decline at half of recoverable resource, ca. 2008-2012, after which production will fall at about 2.7% per year, dropping 75% in 30 years. Coal may also peak sooner than expected

• Heavy oil/tar reserves (600Bb) equal only 22 years current consumption

• Even without global warming, we must change energy sources and consumption patterns

Problems with biofuels

• Most present biofuel crops require high energy inputs to grow, harvest and process, with little net CO2 benefit (maize ethanol 0-12%, soy biodiesel 41%)

• Competition with food production, raising food prices

• Pressure to clear tropical forest for oil palm and soybeans

• Area not sufficient to meet present fuel needs (US could only meet 5%)

Human Population• The world population has tripled in one lifetime,

and is expected by the UN to rise to 9.2 billion by 2050 before stabilizing

• By some estimates, world resources can only sustainably support 500 million people

• We seem to be following a classic ecological pattern of overshoot and collapse

• The planetary carrying capacity depends on numbers versus standard of living; increasing one reduces the other

• Science may find ways to increase carrying capacity, but only at longer time scales

Refusal of Social Globalizationwhen climate change will cause mass migrations

Reinforcing frontiersRejection of immigrantsRise of xenophobiaFear of delocalizationsFailure to deal with poor governance

Globalization should include the free movement of people as well as capital, goods and services

Food Production• The Green Revolution of the 1970s postponed

food supply as a limit to growth• Crop production has improved in the last 20

years from 1.8 to 2.5 t/ha. but such intensive agriculture requires high energy, fertilizer and petrochemical inputs

• World cereal production per person peaked in the 1980s and has decreased slowly since

• Feeding the growing world population and reducing hunger by half will require doubling world food production by 2050

• Land, water, phosphate, energy are all limiting

Start of a Global Food Crisis• In 2007, the price of wheat rose 100%, maize

50%, rice 20%, increasing staple food prices for the poor over 10%

• Global food reserves are lowest for 20 years, with only 57 day grain reserve

• Climate change, drought, floods, soil erosion, overfishing are reducing food production

• With grain being diverted for biofuel, 800 m motorists are competing with 2 bn poor

• There are 854 m hungry people, rising 4 m/y• Food is being priced out of reach for the poor

Water Shortage

• Most freshwater from streams and groundwater is used for agriculture

• Water use for crops will have to double by 2050 to halve the number of hungry

• But, by 2025, 1.8b people will live in regions with absolute water scarcity, and 2/3 of the world population could be subject to water stress as climate change reduces rainfall in these areas

Health Threats to Sustainability• HIV/AIDS and access to treatments• Risk of bird flu pandemic• Rise of malaria and tuberculosis; no profit in

medicines for the poor• Emerging epidemic diseases (SARS)• Growing antibiotic resistance from overuse• Fraud and counterfeit pharmaceuticals• Unhealthy products: tobacco, alcohol, infant

formula, junk foods• Food system: hunger and obesity 800m

Resource DepletionMany key materials are being exhausted rapidly

(estimated years left: predicted/today's rate)

• Phosphorus (fertilizer) 142-345• Antimony (drugs) 15-30• Copper (wire, coins, pipes) 40-60• Hafnium, Indium (chips, LCDs) 5-15• Platinum (catalysts, fuel cells) 15-360• Silver (jewelry, catalysts) 15-30• Tantalum (cellphones, cameras) 20-115• Uranium (weapons, power stations) 30-60• Zinc (galvanizing) 20-46

Economic globalization by itself is not succeeding

• Rise of the Asian economies driving delocalizations and competition for resources

• Difficult transition in Central and Eastern Europe; failure in Africa

• Ageing societies of Europe and Japan• America is living beyond its means• Growing extremes of wealth and poverty; exploitation of

the poor, child labour; worker stress• Failure to create adequate employment• Global economy threatened by internal imbalances and

external perturbations• Recent sustained growth similar to late '20s, early '70s;

increasing warnings of a crash; it may already have started

Financial ImbalancesExample: USA Current Account Deficit

The Cooper-Rogoff Debate, Davos 2006WEF Global Competitiveness Report 2006-2007

• Larry Summers: Global imbalances are one of the most important threats to global prosperity

• Richard Cooper: US current account deficit ($660b in 2004) is natural and sustainable because US is attractive to investment

• Ken Rogoff: US deficit mirrors government borrowing = beginning of the end. US eating up 70% of global net savings. US housing slump could cause drop in overvalued US$ of up to 40% and loss of its role as global reserve currency, precipitating a financial market crisis with serious impact on inflexible economies of Europe and Japan

The failure of social and economic development to eliminate poverty

- Development has been our largest collective undertaking, with humanitarian aims and enormous material and technological investment- While it brought impressive benefits, it failed to narrow the gap between rich and poor- The gap has widen into an abyss

(based on Baha'i International Community, 2005)

What are the financial and economic implications?

Can we afford sustainability?

Can we afford not to move rapidly towards sustainability?

The cost of restoring environmental resources

Lester R. Brown and the Earth Policy Institute (2007) have calculated the annual budget to restore the Earth's productive natural resources

• Protecting topsoil on cropland $24bn• Reforesting the Earth $6bn• Stabilizing water tables $10bn• Restoring rangelands $9bn• Restoring fisheries $13bn• Protecting biological diversity $31bn

• Total annual cost to restore the earth: $93 billion

Climate changeeffect on the economy

The Stern Report estimated the annual cost of uncontrolled climate change at more than $660 billion (5 to 20% of global GDP, as compared to 1% for control measures for greenhouse gases).Climate change represents the greatest market failure in human historyIPCC 4 says stabilizing greenhouse gases by 2030 will slow global growth by 0.12%/yr or 3% of total global GDP

Energyinvestment challenges

• The International Energy Agency estimates needed investment in energy infrastructure at $22,000bn by 2030 to replace ageing capacity and meet growing demand (2% global GDP, $130 per person per year)

• Responding to climate change would add $2,000bn

The double economic challenge

“On current trends, ...humanity will need twice as much energy as it uses today within 35 years.... Produce too little energy, say the economists, and there will be price hikes and a financial crash unlike any the world has ever known, with possible resource wars, depression and famine. Produce the wrong sort of energy, say the climate scientists, and we will have more droughts, floods, rising seas and worldwide economic disaster with runaway global warming.John Vidal in The Guardian Weekly, 9-15 February 2007, Energy supplement, p. 3

Adding up the figures• A recent analysis of 40 years of data on

human activity and environmental damage puts the cost of climate change, ozone depletion, deforestation and overfishing by rich nations at $47 trillion, more that the combined foreign debt of all poor nations

• The annual investment necessary to restore the planet's productive resources is estimated at $93 billion

• The biggest shortage may be of capital to make investments and repair damage

The financial challenge is huge

• Where will the funds come from?• Who will manage them?• What mechanisms or institutions will be

required?• How do we create them?• How do we reconcile short-term

conflicting interests to reach consensus?

• What is the role of business in all this?

THE PROBLEMS ARE GLOBAL BUT GOVERNANCE IS STILL NATIONAL

• Legislation: social definition of ethical limits• Taxation: wealth redistribution for common

services and social security• International frameworks largely non-binding

(labour, health, transport, intellectual property)• No global mechanism for economic

management (IMF, G8, etc.)• No mechanism for global wealth redistribution• No international legislation providing common

standards or a level playing field for business

The failure of present institutions to address global challenges

• No politician will sacrifice short-term economic welfare, even while agreeing that sustainability is essential in the long term

• Deep social divisions within societies and between countries prevent united action in the common interest

• Global warming is just one symptom of the fundamental imbalances in our world

• Our present economic system is incapable of addressing long-term issues

Integrating all the driving forces:environmental, social, economic

What are the implications for planetary

sustainability?

The wealthy live unsustainable lifestyles

Ecological footprint• Surface needed to supply the needs and absorb the

wastes of an individual, community, or country• Global average 2.3 ha/person• Italy 3.26 ha/person (lowest in western Europe)• France 5.74 ha/person, Switzerland 5.26 ha/p.• Resources available 1.9 ha/person• We overshot the earth's capacity in 1975http://www.globalfootprint.org/http://www.ecologicalfootprint.org/http://www.myfootprint.org

Scenarios

• Business as usual in a materialistic society ignoring the future

• Retreating to a fortress world of old values

• Making a transition to sustainability

Scenarios from World 3(Meadows et al. (1992) Beyond the Limits)‏

Business as usual Transition 1995 Transition 2015

End of the growth paradigm

• What is more realistic? • Exponential growth?• The normal distribution, bell-shaped

curve, or S curve of rate of change?• Economic growth has depended on

population growth, energy growth, and resource growth, all of which end in this century

Welcome to the new paradigm of balance, optimal size, efficiency and closed systems

At the rootof all this

is what could be called an

ethicaldeficit

Has nationalsovereignty

becomeunethical?

Even at the UN, national sovereignty is jealously protected, yet global problems require a global response. Governments do not realize that true national self-interest today is best reflected in global solidarity and a willingness to make short-term sacrifices in the common interest

Sea level rise from climate change may submerge small

island developing states

Who is responsible for their complete loss of national territory, culture and sovereignty?

A self-centred materialism

• The early twentieth century materialistic interpretation of reality has become the dominant world faith in the direction of society• Dogmatic materialism has captured all significant centres of power and information at the global level, ensuring that no competing voices can challenge projects of world wide economic exploitation

The unsustainable consumer culture - Materialism's vision of human progress produced today's consumer culture with its ephemeral goals

- For the small minority of people who can afford them, the benefits it offers are immediate

- The breakdown of traditional morality has led to the triumph of animal impulses and hedonism

- Selfishness has become a prized commercial resource; falsehood reinvents itself as public information; greed, lust, indolence, pride, violence are broadly accepted and have social and economic value

- Yet it is a culture without meaning

CORRUPTION• The illegal economy from organized crime is

now $2 trillion/year, or twice all the world's defence budgets

• Bribery $1tr; counterfeiting and piracy $520bn; drug trade $320bn; human trafficking $44bn

• Political corruption is everywhere; the vast majority of bribes go to people in rich countries

• 10% of all public health budgets are lost to corruption

• Business participates to buy advantages, for efficiency, out of fear

Business has noinherent ethical framework

• Only statutory obligation is profit for shareholders

• Ethics dependent on individuals, especially at the top

• Globalization leaves business open to ethical challenges beyond national legislation

The imperative for changeWe are in the middle of a major transformation in societyThe past is not a good predictor of the futureChange is inevitable, and the rate of change is accelerating,

requiring adaptive managementGlobalization cannot be stopped, but it can be transformedInstitution building for international governance will continueWe can consciously work for change, or wait for catastrophe

to force us to changeThere will be new forms of wealth creation and business Creativity and innovation will be increasingly necessary for

successValues and ethics will be fundamental to social and

economic transformation

How can the business-government relationship

contribute to solving these problems?

First, by overcoming old stereotypes, recognizing their complementarity and working

together

A business view of the role of government

The Competitive Edge in Environmental Responsibility

Based on the Executive Opinion Survey of the World

Economic Forum– Dahl, Arthur Lyon (2004). "The competitive edge in environmental

responsibility", p. 103-110. In Michael E. Porter, Klaus Schwab, Xavier Sala-i-Martin and Augusto Lopez-Claros, The Global Competitiveness Report 2004-2005. World Economic Forum. Houndmills, UK and New York: Palgrave Macmillan.

BUSINESS AND ENVIRONMENT• From the experience of the 1970s, there is a

general assumption that environmental and social regulations reduce profits and damage competitiveness.

• Many governments continue to believe that, to stimulate the economy and create wealth, government regulation and interference with business should be minimized or eliminated

• Entrepreneurs may resent government “interference”

What do business leaders really think about environmental responsibility?

• World Economic Forum 2004 Executive Opinion Survey

• 8,729 business leaders• 104 countries

(In Michael E. Porter, Klaus Schwab, Xavier Sala-i-Martin and Augusto Lopez-Claros, The Global Competitiveness Report 2004-2005. World Economic Forum. Houndmills, UK and New York: Palgrave Macmillan)

Coverage of environmental and social responsibilityWEF Executive Opinion Survey 2004

• Government action such as environmental regulations and their enforcement, standards and reporting requirements, subsidies, government-business cooperation and compliance with international environmental agreements.

• Business attitudes toward environmental issues, such as environmental management systems and reporting, environmental marketing and labelling, cleaner production and waste reduction, energy efficiency and long-term planning.

• Corporate social responsibility, including corporate codes of conduct, socially and environmentally responsible investing, company encouragement of voluntary social activities by employees, and country-wide efforts at poverty reduction.

THE RESULT: BUSINESS AND ENVIRONMENT ARE COMPATIBLE

• Business leaders considered good governance (strict environmental regulation fairly enforced) increased their competitiveness

• Countries with most advanced and competitive industrial economies also showed most advanced business thinking on environmental and social responsibility

• Strong regulations allow companies to compete in meeting their regulatory obligations, giving a competitive advantage to companies that innovate and increase their efficiency in environmental performance

• This creates new market niches for environmental services

IMPORTANCE OF GOOD GOVERNANCE

• Good laws and regulations not sufficient

• Inefficient or irregular enforcement and corruption allow businesses to escape from their responsibilities

• Companies that want to improve performance are at a competitive disadvantage

• Lack of progress at national level rebounds on international competitiveness

• Therefore good governance is essential

IMPORTANCE OFGOOD GOVERNANCE

Some qualities of good governance:

• Trust

• Collaborative spirit between business and government

• Regulations clear and enforced fairly

• Confidence in business that their taxes will be spent effectively in their common interest

• Adherence to international agreements

• These countries are most competitive at international level

COUNTRY PERFORMANCEIN ENVIRONMENTAL RESPONSIBILITY

• Ranking of country performance in environmental and social responsibility as judged by business leaders

• Reflects efforts of both business and government to address and resolve their environmental problems in the context of sustainable development

• Not a ranking of environmental quality

(From 2004-2005 Global Competitiveness Report, World Economic Forum)

COUNTRY PERFORMANCEIN ENVIROMENTAL AND SOCIAL

RESPONSIBILITYas assessed in the 2004 WEF Executive Opinion Survey

HIGH COUNTRYPERFORMANCE1. Sweden2. Japan 3. Denmark4. Finland5. Netherlands6. Switzerland7. Singapore8. Norway9. Germany

POSITIVE WITH SOME WEAK AREAS

10. Taiwan11. Austria12. Canada 13. United Kingdom14. Belgium 15. Australia16. New Zealand 17. Luxembourg18. Iceland 19. France 20. Ireland21. United States22. Malaysia

COUNTRY PERFORMANCE

IN ENVIROMENTAL

AND SOCIAL RESPONSIBILITY

COUNTRY PERFORMANCEIN ENVIROMENTAL AND SOCIAL RESPONSIBILITY

as assessed in the 2004 WEF Executive Opinion Survey

PROGRESS BUT MAJOR WEAKNESSES

• 33. Gambia• 34. Chile • 35. China • 36. United Arab Emirates• 37. Lithuania• 38. Thailand• 39. Spain• 40. Israel• 41. Uganda• 42. Czech Republic

• 23. South Africa • 24. Brazil • 25. Hong Kong • 26. Slovenia • 27. Estonia • 28. Indonesia• 29. Costa Rica • 30. Slovak Republic• 31. Tunisia• 32. Korea

COUNTRY PERFORMANCEIN ENVIROMENTAL AND SOCIAL RESPONSIBILITY

as assessed in the 2004 WEF Executive Opinion Survey

SOME PROGRESS BUT BALANCE NEGATIVE• 55. Zambia • 56. Italy• 57. Botswana • 58. Cyprus• 59. Colombia • 60. Namibia • 61. Madagascar • 62. Tanzania • 63. Latvia • 64. Mexico • 65. Vietnam • 66. Malawi

• 43. Bahrain• 44. India • 45. Kenya • 46. Mauritius • 47. Ghana • 48. Hungary• 49. Morocco • 50. Portugal• 51. Nigeria• 52. Greece • 53. Jordan• 54. Egypt

COUNTRY PERFORMANCEIN ENVIROMENTAL AND SOCIAL RESPONSIBILITY

as assessed in the 2004 WEF Executive Opinion Survey

MOSTLY NEGATIVE• 67. Turkey • 68. Sri Lanka • 69. Mali • 70. Romania • 71. Jamaica • 72. Malta • 73. Philippines • 74. El Salvador • 75. Uruguay• 76. Ukraine • 77. Zimbabwe• 78. Panama • 79. Poland• 80. Trinidad & Tobago

• 81. Croatia• 82. Mozambique • 83. Russian Federation• 84. Algeria • 85. Macedonia• 86. Pakistan• 87. Argentina• 88. Bangladesh• 89. Bulgaria• 90. Dominican Republic• 91. Guatemala• 92. Peru• 93. Chad

COUNTRY PERFORMANCEIN ENVIROMENTAL AND SOCIAL RESPONSIBILITY

NEGATIVE - HAVE NOT YET STARTED

94. Ethiopia 95. Nicaragua 96. Bolivia 97. Serbia & Montenegro98. Georgia99. Honduras

100. Venezuela101. Ecuador 102. Paraguay103. Bosnia and Hercegovina

• 104. Angola

Competitiveness vs. Social and Environmental Responsibility

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COUNTRY PERFORMANCESOME CONCLUSIONS

• Strong correlation between economic and environmental performance

• Increasing wealth helps to fund environmental measures

• High environmental performance and economic competitiveness go together rather than conflicting

• Countries politically averse to environmental controls in order to favour the business sector are relatively less competitive than those that give environmental protection and sustainable development a high priority

What does an ethical approach suggest about

government and business responsibilities for

sustainability?

What rules/values will enhance integration?

• To evolve more efficient and balanced systems, we need to increase integration in diversity at multiple levels of organization

• How do we do this?• The "technological fix" lies in "human

engineering": education, investment in human capital, development of human potential, sustainability across generations

• This requires ethics/values in balance with science

Sustainable development requires fundamental change

• We need to redefine "development" (= growth for economists) within a more universal framework including society, culture, science and spirituality

• Sustainable environmental management must come to be seen not as a discretionary commitment to weigh against other competing interests, but rather as a fundamental responsibility and pre-requisite for spiritual development as well as our physical survival

The importance of values• Ethics and values are what determine

how humans relate to each other• They are the social equivalent of DNA,

encoding the information through which society is structured

• The most effective way to transform society is to change its values

• What values can provide the ground rules for sustainability?

(based on proposals by the Baha'i International Community)

Diplomacy needs to includevalues for a sustainable society

• Unity• Justice• Solidarity• Altruism• Cooperation• Trust• Moderation

Unity - the essential prerequisite for actionThe concept that humanity constitutes a single people presents fundamental challenges to the way that most of the institutions of contemporary society carry out their functions. Whether in the form of the adversarial structure of civil government, the advocacy principle informing most of civil law, a glorification of the struggle between classes and other social groups, or the competitive spirit dominating so much of modern life, conflict is accepted as the mainspring of human interaction. It represents yet another expression in social organisation of the materialistic interpretation of life that has progressively consolidated itself over the past two centuries....(The Prosperity of Humankind, Bahá'í International Community, Office of Public Information, Haifa)

JUSTICE AND EQUITY

It is unjust to sacrifice the well-being of most people -- and even of the planet itself -- to the advantages which technological breakthroughs can make available to privileged minorities

Only development programmes that are perceived by the masses of humanity as meeting their needs and as being just and equitable in objective can hope to engage their commitment, upon which implementation depends

Solidarity and Altruism

We should consider every human being as a trust of the whole.

The goal of wealth creation should be to make everyone wealthy.

Voluntary giving is more meaningful and effective than forced redistribution.

Cooperation and Reciprocity

Cooperation and reciprocity are essential properties of all natural and human systems, increasing in more highly evolved and complex systems

TrustworthinessTrust is the basis for all economic and social interactionPublic opinion surveys show little trust in politicians and businessWould a government sign an agreement with someone it did not trust?

Moderation in Material Civilization

The civilization, so often vaunted by the learned exponents of arts and sciences, will, if allowed to overleap the bounds of moderation, bring great evil upon men....

Bahá'u'lláh (1817-1892)

Business is also essential to achieving sustainabilty

• Innovation and flexibility• More financial means than most

governments• Not constrained by political frontiers• But, it needs to add other goals beyond

profit (examples: Tata, Migros)• It would be to the advantage of business

to have a more stable global economic system and level playing field

Sustainability requires rethinking economics- The present economic system is unsustainable and not meeting human needs- 50 years of economic development, despite some progress, has failed to meet is objectives- The global economic system lacks global governance- It is not the mechanisms of economics that are at fault, but its values

Questions

• Is eating your only purpose in life?• Should profit be the only purpose of

business?

• Should you try to keep growing forever?• Should growth be the main goal of

businesses and economies?

The true purpose of economicsEconomics has ignored humanity's broader social and spiritual needs, resulting in:- Corrosive materialism among the wealthy- Persistent poverty for masses of the world's peoples

Economic systems should give the peoples and institutions of the world the means to achieve the real purpose of development: the cultivation of the limitless potentialities in human consciousness.(adapted from Bahá'í International Community, Valuing Spirituality in Development, 1998)

The present economic system cannot deal with sustainability

- Economic thinking is challenged by the environmental crisis to change:- Insisting that there is no limit to nature's capacity to fulfil any demand made on it- Attaching absolute value to growth, to acquisition, and to the satisfaction of people's wants- Making economic decisions at the national level when most of the major challenges are global

We need new economic models that- further a dynamic, just and thriving social order- are strongly altruistic and cooperative in nature- provide meaningful employment- help to eradicate poverty in the world

They should give the right signals for challenges like climate change, sustainability and the development of human potential (not just GDP)

Guidelines for a global ethical framework for business

• Combine economic efficiency and social responsibility

• Altruism, create wealth for everyone to eliminate poverty (and increase customers)

• Generate employment as well as productivity• Find business opportunities in sustainable

environmental management• Work to strengthen global governance,

peace and security• Be of service to human society

Living within environmental limits is possible

To maintain the planet's ecological balance, we must:- base the economy on renewable energy and resources (agriculture, forests, fisheries, bio-industries), closed materials cycles and integrated product life-cycles- reduce human impacts to a level appropriate to the vulnerability and resilience of the systems- restore damaged systems to the level necessary to maintain natural and human ecosystem services- allow population growth and development only to the extent that system improvements extend the carrying capacity of the planetary system

The goal:an organicallyunited worldGood for society

Good for business

Business must convince governments to strengthen global

governance for sustainability

The years ahead will be difficult, but there is reason for hope

Thank you

The planet will thank you too