Business Times

Sri Lankan companies urged to follow sustainable business practices

By Bandula Sirimanna

Sri Lankan companies should make huge paradigm shift towards sustainable business to meet its own needs while taking care of the environment, its employees, and the communities in which it works, says Ravi Fernando, UN Global Compact Focal Point , Global Compact Net work Ceylon, INSEAD Social Innovation centre. Addressing a seminar in Colombo on ‘Growing your Business to the next level', Mr. Fernando said that at Sustainable company presents an approach which reviews the evolution of business strategy from being ‘Shareholder focused to Stakeholder focused’. From creating economic value for shareholders to creating sustainable value for stakeholders.

“Governments must have sustainable policies – not just policies that give you a tick on a global review but meaningful sustainable policies which are relevant to that nation, and that address the economic, social and environmental issues encouraging both business and consumers to move towards sustainability.” Secondly, business has to recognise that there are tremendous opportunities in “moving towards green business, green economies, and it makes sense for the world.” he said.

The world’s best companies are all moving in the direction of sustainable business as they know stakeholders and the emerging ethical consumer have begun to demand that
‘Corporate responsibility is a Business commitment to sustainable business'.

The emerging paradigm for sustainable business which is increasingly being embraced but has yet to be articulated is the concept of Strategic Corporate sustainability as an approach for business to integrate corporate responsibility, corporate strategy and sustainable business strategy, he added.

“Asia today has two major sustainability issues; One is the shortage of water, and the second is poverty. If we look at poverty – the figures – one in two people in the world earn less than two dollars per day,” he said . “A good percentage of that “below-two-dollar population” is in Asia.” According to Mr. Fernando, the two “Asian giants” – India and China – are beginning to seriously address these issues. “China is probably the world’s factory today, manufacturing almost 60 to 70 % of the world’s goods. They have been able to pull around 200 to 300 million people out of poverty. Now that is an amazing achievement.” So poverty today might not be the most serious problem in the long term. However around 70 to 80 % of China’s available water resources are polluted; water management has become a priority. “[We] need to clean up our rivers and clean up our lakes; there is a need to collect our rainwater and there is also need for improved desalination.” said Mr. Fernando.

There are three primary components, here in Sri Lanka and elsewhere, that reinforce the importance for businesses to act in a sustainable manner. The first is the escalation in the price for oil. The second is the growing consensus of the importance of taking steps to slow down global climate change. Both of these components are forcing companies to re-examine their business models and look for ways to increase efficiency. The third factor is globalization. As businesses have expanded internationally, some growing so large that their budgets now dwarf those of many countries, there is recognition that with power and money come certain responsibilities. As governments and citizens start to require greater social and environmental benefits, sustainable business practices will become the norm in our global economy, Mr. Fernando said.

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