Environmental Management
(John Elkington)

Executive Summary

Some management trends start at the top and cascade down; others evolve from the bottom up. Sustainable development has come from both directions. In the process it has caught a growing number of well-known companies off balance—among them Shell, Monsanto, and Nike. More positive has been the foundation of the World Business Council for Sustainable Development; and the World Economic Forum in Davos routinely covers sustainable-development issues. But in many respects the business story has only just begun. Meanwhile, the 2002 Earth summit in Johannesburg has spurred international stocktaking on progress since the 1992 summit in Rio de Janeiro. Among the key conclusions:

• Demographic pressures will create enormous new risks and opportunities. During the 20th century, the planet’s human population rose from 1.6 billion to 6 billion. There is likely to be a further 50 percent increase by 2030.

• A growing range of environmental problems—including ozone depletion, climate change, the collapse of fisheries, and loss of forests—signals that today’s economic and business models are unsustainable.

• The end of communism in many countries means that the one-third of humanity who used to live in the old communist world are now playing a growing role in the global economy. In total, there are some four billion people living in the poorer parts of the world; it will be necessary to meet their needs.

• Business is increasingly in the spotlight—and is expected to play a key role in defining and delivering sustainable development. Paradoxically, the governance vacuum created by accelerating globalization will increase the pressures on brand-name companies and on financial markets to act responsibly and effectively.

• At the same time, however, growing resistance to current forms of economic globalization represents a profound challenge to free market capitalism.

• As a result, growing numbers of companies are adopting triple-bottom-line strategies, focusing simultaneously on economic prosperity, social equity, and environmental protection.

The Sustainability Agenda

Boardrooms have been buzzing with questions since the sustainable-development agenda first began to appear on corporate radar screens. Some business leaders see sustainable development as simply the environmental agenda in new colors, but others speak of a profound shift, with new forms of corporate responsibility and accountability emerging. Here are some key questions and answers.

What Is Sustainability?

The answer, first laid out in the 1987 report of the World Commission on Environment and Development, is that sustainability is the principle of ensuring that our actions today do not limit the range of economic, social, and environmental options open to future generations.