The road to our sustainable new normal post Coronavirus should go from voluntary to mandated sustainability actions. Implying that governments should make sustainable business practises mandatory for all organizations: financial sustainability, environmental sustainability and social sustainability in equal parts in our business model. The prosperity of a business/country should be measured based on its sustainable business practices.
There are various business concepts introduced to help businesses maximize available resources, minimize their environmental impact, and improve their social impact in communities they thrive. Also, countries ratify international agreements to ensure governments promote sustainable business practices within their states. The transboundary effects of activities within countries make these international agreements relevant. The following practices I find exciting, and I view them as most people, as options to aid our road to the new normal.
Going from Linear Economy to a Circular Economy
Currently, organizations determine financial success based on the GDP model, which is linear and wasteful, as already discussed in the previous article.
Moving to a circular economy will require a new way of thinking aimed at resource conservation. See below a schematic representation of a Circular Economy by the Ellen MacArthur Foundation, which I found interesting.
According to the Foundation, designing for a circular economy has two cycles – the technical cycle and the biological cycle. The technical is broken down into strategies such as Recycle – Remanufacture – Reuse – Maintain- Share. At the same time, the biological side has to do with the creation of regenerative systems that mimic nature’s way of decomposing/recycling biomass to be reused in the food chain or for other purposes. It also delves into the extractive processes and the reuse of a product from natural fibers int multiple uses. It is based on three principles: (1) Design out waste and pollution, (2) Keep products and materials in use, (3) Regenerate natural systems. The Ellen MacArthur Foundation has developed a measuring tool called Circulytics that determines the level at which circular economy principles were applied (Circularity).
Our Environmental Impact – Green Economy
In addition to the Circular Economy, we have the Green Economy. The Green Economy is the use of nature-based solutions and the application of environmental conservation practices. Solutions involve the use of clean technology in our business activities. Clean technology (cleantech), is any process, product, or service that reduces negative environmental impacts through significant energy efficiency improvements, the sustainable use of resources, or environmental protection activities. It should also involve the gathering and implementation of traditional knowledge from indigenous communities to inform decision-making processes.
The Role of Traditional Knowledge in decision-making
Research has shown that Indigenous people explain many natural phenomena that scientists still cannot explain—for example, astounding how much astronomical knowledge possessed by the Dogon Tribe of Mali in West Africa. Another example of traditional knowledge known by the Alawa, MalakMalak, Jawoyn and other Indigenous peoples of northern Australia for thousands of years is that kites and falcons (firehawks) intentionally carrying burning sticks to spread fire. Passing down information such as this from the onset, reduces property losses, saves lots of research funding and lost opportunities to further knowledge. In line with this perspective, in 2019, the Canadian federal government passed new environmental assessment legislation, the Impact Assessment Act, which requires Indigenous knowledge to be used alongside scientific information in any decisions about the environment, including natural resource projects.
Managing our Environmental Impacts
There are various internationally accepted standards that organizations can subscribe to meet their environmental responsibility. They include ISO 14000 family, Life Cycle Assessment and EMAS (Eco-Management Audit Scheme). Also, the world trade agreement has opened up opportunities to do business across borders. In addition to applying environmental management systems in all activities, exporting organizations should apply the extended producer responsibility principle. They should ensure that their products at every stage – cradle to grave- have minimal to zero impact on the environment and, if needed, create take-back schemes that will ensure that their product never gets into the receiving country’s waste stream. Developing countries are struggling to manage their waste, and it should be the producer’s responsibility to design their products accordingly. I had written more about this in a previous article. In addition to EPR, the Polluters Pay principle is also relevant.
Measuring Social Impact (Social Economy)
Finally, to address the social impact of business activities, measured by the health and wellness of people and communities where the business thrives, we look at the social determinants or issues that impact our health and well-being and an organization’s effect on it. In 2012, Canada and other United Nations (UN) Member States endorsed the “Rio Political Declaration on Social Determinants of Health” (Rio Declaration). This non-binding pledge calls on the World Health Organization (WHO) Member States to improve/influence the working and living conditions that affect health and well-being. The WHO defines social determinants of health as the circumstances in which people are born, grow, live, work and age. Other factors include individual genetics and lifestyle choices. See a diagram below of the social determinants.
According to WHO, the distribution of money, power, and resources at global, national, and local levels impact these circumstances. It also states that “this unequal distribution of health-damaging experiences is not a ‘natural’ phenomenon. It results from a toxic combination of poor social policies, unfair economic arrangements [where the already well-off and healthy become even richer and the poor who are already more likely to be ill become even poorer], and corrupt politics.” For instance, the indigenous people of Canada and Australia have high poverty rates and low life expectancy. The same goes for most countries that have experienced colonialism and those with poor social policies. In most of these areas, people suffer from various illnesses linked to environmental pollution. Environmental pollution in these areas is caused mainly by the extractive industries because these areas are always rich in natural resources – hence the corrupt politics.
How do we address social issues and subsequently measure SDOH?
Indicators and data have been developed and are being used to measure social determinant levels in its various forms in communities. Examples include the AARP livability index, CDC data set the directory of social determinants of health at the local level and Canada’s Health Inequalities Data Tool.
But what about businesses? Do we have data and indicators used to determine a business’s social impact? For instance, an organization with high water consumption in its processes, e.g., the beverage industry, impact the health and wellness of the people and community they operate because they continuously take water away from the people reducing the available freshwater reserve in that community. Beverage companies like Coca-Cola have reported these impacts in their GRI Sustainability Reports; these reports should be made mandatory for every organization.
How do we measure Coca-Cola’s negative social impact? Like many organizations, Coca-Cola has taken up Corporate Social Responsibility (CSR) initiatives to address the social issues where they are lacking, but are these initiatives comparable to the negative impacts of their processes on the community? Are they also addressing social issues specific to their social impact, e.g., availability of clean water for the community? If so, is it measured? And how is it estimated? If not, I would think that the way forward is that it should be measured and not just reported. A possibility is to measure a CSR initiative using indicators and data developed under SDOH to determine the social impact of an organization/country or new indicators specific to CSR.
So, what could be the road to our sustainable new normal post- Coronavirus?
Our road to a sustainable new normal should mandate the application of sustainable business practices in all organizations. We can use the combination of strategies discussed above to develop an informed business model that is measurable. Successfully integrating these practices will address the economic, environmental, social concerns of any business and extrapolated to calculate a country’s GDP.
Now, doing this implies integrating Circular Economy practices with Green economy practices and measuring social determinants of health data for communities/ CSR for businesses and implementing into Industry/business models. Could this be the new standard that will lead us to the right solutions, including an updated GDP?