Moving towards a Long-term Corporate Sustainability Policy in 2013

We begin 2013 with a stark reminder in 2012 of the vulnerability of the global community’s sustainability to impacts of seemingly unending environmental degradation. The Rio 20 Summit in the summer of 2012 once again brought together a huge number of stakeholders to discuss and debate the global implications of climate change, environmental pollution, scarcity of resources, land degradation, loss of biodiversity and other related issues. Today, 20 years on from the original Earth Summit in Rio, the 2012 Summit recorded that although some progress has been made in mitigating global environmental issues by increasing resource efficiency, there is still a lot to be done. And consider this as an understatement.

Realization of the Responsibility of the Global Business Body

In 1992, the Earth Summit in Rio awakened an awareness in the global community of the need to hold ‘the global corporate body’ accountable for moving towards sustainable development. Thus began the movement of companies towards monitoring and disclosing their performance related to environment and society.

At the corporate level it is important to understand the risks of the ripple effect of environmental impacts. When a product is developed it has an impact on the environment throughout its life-cycle. Similarly, any change in circumstances of the development of the product due to an environmental issue, will be a source of risk for the company and for the society at large. In the long term this can lead to rise in prices and hardship for both the producers and the consumers.

As global human impact on the ecosystems increases with increase in population and the need for further economic development, the ripple effect of environmental degradation will be felt further and thus become a serious threat to human security. Time and again it has been observed that the interdisciplinary impacts are felt beyond the affected geographical locations. The impact posees a risk to the entire global community at many levels. Water scarcity is one such obvious impact.

There are two underlying causes of water scarcity: growing use of water and water pollution. There is a need then not only to use water, a finite resource, in a more efficient manner but also to maintain the quality of water. Water is a basic human need as well as a key input in almost any supply chain in all industries from food production to energy production and construction. The water requirements thus hold a recipe to a tug of war amongst all its users in the future.


Ever growing Water Needs

There is an ever escalating need for water, and limited freshwater resources available for use. Once again, with continuous increase in the world population, the water requirements will increase from 4500 cubic meters to 6900 cubic meters by year 2030. This will be a 40% in excess of the current water available (McCinsey, 2009).

Available freshwater is being used at its capacity in many geographical locations. These include? the Murray-Darling River in Australia, the Yellow River in China, the Indus in Pakistan and India, the Amu and Syr Darya in Central Asia, the Nile River, the Colorado River in the United States of America and Mexico, and in the Middle East. (UN Water, 2012). Most of these locations are key agricultural areas and support related industries like the textile and food processing industries. Water is also used in energy production to support local communities and industry. As stress on water supply increases, the ripple effect will be seen throughout all industries. Thus, global industries face a key risk from various increasing demands for water.

The global industry use of water accounts for approximately 20 percent of global freshwater withdrawals as compared to a minimum of 49 percent for agriculture (Shiklomanov, 1999). In terms of type of industry, the power sector uses the largest amount of water.

Even though water consumption in industry is still less than half of that used by agriculture, industry faces a greater risk from water scarcity. In times of water stress, maintaining agricultural growth and a water supply for human requirements will be regarded as a necessity and given precedence over industrial processes.

Water Pollution is a key threat to the Living

Water pollution is primarily caused by chemicals entering ground and surface water. When water pollution occurs, the quality of water deteriorates. High levels of pollution renders water unfit for use, especially for drinking, thus creating further water stress.

Many of the chemicals are similar to the hormones found in the bodies of human beings and animals. These endocrine disturbing chemicals are associated with cancer. The WHO has estimated that adverse environmental exposures contribute to 19% of the occurrence of cancer worldwide (Blacksmith Institute, 2011). Studies have shown that chemicals washed into the rivers and seas play havoc with the respiratory, nervous and reproductive systems with aquatic life. Similar evidence is present in birds.

Many key industries contribute to water pollution – including the chemicals sector, food and beverage sector, leather industry, textile and mining industry and the pulp and paper sector. These industries currently contribute over 30% to world GDP (Blacksmith Institute, 2011). Regulations in OECD countries introduced over the years have improved the quality of water discharged (UNEP, 2012), but the industrial discharge in developing countries is still largely unregulated. Water pollution from tanneries, acid battery recycling, solid waste management sites, mineral ore mining and the dyeing industry is common in these countries and introduces a large number of hazardous chemicals into the environment.

Role of Waste production in Water Pollution

As companies seek to attract newr global markets, waste production will increase with the increasing consumer base. The disposal of waste is also a major source of water pollution.

Landfills are made up of industrial and municipal wastes. Leachate from landfills or waste dumpsites enters freshwater as a result of permeation and the decomposition of the wastes. Waste at industrial or municipal dumpsites include waste from batteries, scrap metal, agricultural, and hospitals, households and chemical waste from industrial processes. This can cause serious water pollution as chemicals enter the groundwater sources. Leachate can contain heavy metals and hazardous organic compounds from industrial waste (Blacksmith Institute, 2011). If not managed properly, water pollution will contaminate freshwater supplies and create further water stress.

Creating a long-term Strategy to Manage Key Sustainability Risks

From a risk management point of view, it can enable a company to know the risks which can affect the business and address these before these assume a substantial proportion. In terms of water scarcity, the global corporate body needs to play a leading role in reducing water stress.

‘Society increasingly holds the global businesses accountable as the only institutions powerful enough to respond to the challenges our Planet faces’ (Warbech, 2009). As governments face stress in meeting rising public demands, there is little budget left for innovation and improvement. The company on the other hand must remain dedicated to improvement if future risks threaten its survival.

As consumers become more concerned with growing environmental impact, the focus will be on buying products from companies which demonstrably have the least environmental impact. Consumers today also question the policies used to source raw materials down the supply chain. In terms of rethinking its long-term strategy, the company must therefore adopt policies today to reduce the risks it faces in the future.

A key place to start will be to conduct a sustainability assessment of the company’s processes. As a number of factors lead to water scarcity, the company needs to identify the impacts from all its practices to develop a comprehensive water footprint.

Companies can use an understanding of the risks identified to build a business case for its sustainability policy. The policy should set out long-term targets ? along with detailing a method of measuring progress on the targets. As with all environmental impacts, progress on reducing water footprint can only be made if initiatives are taken and sustainability targets are set on a number of fronts. Key targets for sustainability can include:

  • Reducing carbon footprint: By improving use of energy and fuel on an ongoing basis, in the workplace and in transport, including efficiency of fixtures and appliances, reducing executive travel and encouraging energy conservation, thus indirectly having an impact on water use.
  • Working towards cutting waste: By identifying and working towards zero waste as a long-term target. This target can be achieved by reducing packaging through research and development and encouraging re-use and recycling.
  • Conserving water: By reusing wastewater after treatment. Companies can also work towards identifying the efficiencies of the product.
  • Introducing measures and practices that reduce pollution: By reducing pollution entering the water bodies, the company contributes to maintaining the quality of water.
  • Sourcing from sustainable suppliers: By?conducting environmental and social assessment of the sourced raw materials, companies can encourage suppliers to develop sustainable practices.
  • Creating a more sustainable product through research and development: By focusing on improving the product, the company can benefit by investing in a less harmful and sustainable product.
  • Understanding the resources needs of the local community to build local partnerships: By creating goodwill and understanding of the issues amongst all stakeholders, the company can reduce risks of ?negative publicity as local resources are shared.

Finally, an important aspect of creating a sustainable business practice is to educate the employees and external stakeholders of the need of adapting sustainable practices in the company’s business functions. Here, the ripple effect can be positive.

Consider water scarcity for example; water is a key challenge for business sustainability, and it can only be addressed through the participation of its key stakeholders. In understanding their water footprint, stakeholders and the company can both work together to reducing water use by adopting conservation methods and better practices. Through active participation on all fronts, water scarcity can be dealt with together creating a positive impact on water availability in the long term.

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Author Information

Nazish Shekha is an independent consultant specializing in helping companies to develop corporate social responsibility (CSR) policies, sustainability strategies and communications. Nazish's scope of work includes conducting stakeholder surveys, creating carbon footprints, impact evaluation, creating and evaluating sustainability reports, developing and suggesting improvement to processes.

2 Responses to “Moving towards a Long-term Corporate Sustainability Policy in 2013”

  1. Junaid #

    A very good article that rightly highlights the core issues relating to sustainability on resources front. According to me best part of the article is listing down of key initiatives that a company can pledge to adopt and promote across the board which are not very expensive to adopt.

    January 21, 2013 at 12:34 pm Reply
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    January 21, 2013 at 9:45 am Reply

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