Sustainable Business Initiatives in the Context of Emerging Economies

Sustainable Business Initiatives in the Context of Emerging Economies

Jay (Luv) M. Nathadwarawala (Cardiff University Business School, UK) and Khush M. Nathadwarawala (Imperial College Business School, UK)
DOI: 10.4018/978-1-61692-834-6.ch018
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Abstract

Emerging economies, becoming popular under the acronym of BRIC (Brazil, Russia, India and China), are facing unique challenges related to sustainability. The challenges faced by these economies are quite different to those faced by developed economies such as UK, USA and Australia. These differences arise – from the BRIC perspective – due to the lack of existing infrastructure, potential for huge growth in the markets, need for greater awareness from the consumers and the challenges in implementing regulatory compliances. Improving the performance of organizations and industries in which they exist is a crucial step towards achieving control and improving sustainability. This chapter outlines and discusses issues and challenges related to implementing green concepts in emerging economies, corresponding measures and also proposes an approach to ameliorating the challenges.
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“Then I say the Earth belongs to each…generation during its course, fully and in its own right, no generation can contract debts greater than may be paid during the course of its own existence”

Thomas Jefferson (1789)

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Introduction

Sustainability is the ability of the business to continue its operations in the face of adverse situations. In a wider context, sustainability also implies the responsibility of the business to carry out its operations in such a way as to have minimum impact on its environment. This chapter discusses sustainable business initiatives in the context of emerging economies.

Strategically, it is vital for a business to understand sustainability and ensure that its business strategies are in line with the overall sustainability of its industry, society and the world. While the details of a sustainable strategy are hardly ever straightforward, the challenges multiply even further when industries across multiple geographical regions and national boundaries are involved. This was amply evident in the recently concluded Copenhagen summit. (Black, R., 2009) While well-intentioned representatives from various nations arrived, debated, discussed, and disagreed on the global need for carbon emissions control, hardly a nation ratified any of the agreements. While disappointing, it was not unexpected as staggering amounts of conflicting data that needs to be processed to arrive at solutions that are acceptable to all parties. Meanwhile, business goes on as usual. This chapter approaches the challenges of sustainability, and how those challenges can be handled within business strategies. More importantly though, this chapter aims to discuss issues related to sustainability in the context of emerging economies. This discussion, we believe, is important because of the unique challenges related to sustainability faced by these emerging economies. The acronym BRIC (Brazil, Russia, India, and China) has become popular because these four regions represent the fastest growing developing economies. The challenges faced by these economies are quite different to those faced by developed economies such as UK, USA, and Australia. These differences arise – from the BRIC perspective – due to the lack of existing infrastructure, potential for huge growth in the markets, need for greater awareness from the consumers and challenges in implementing regulatory compliances.

At the strategic level, sustainability can be incorporated in business planning, business processes, standards, regulatory compliances and in the attitude of the people working within that organization. The attempts to make a business a ‘sustainable’ also correlate with its continuity. An environmentally conscious business intertwines sustainability with its surroundings – which may be unique in emerging economies.

This chapter is divided into the following sections:

  • Understanding international sustainability

  • Economics of sustainable development

  • Sustainable development in emerging economies

  • Business and government efforts on sustainability in BRIC countries

  • Environmental economics & regulation in emerging economies

  • International sustainability strategies in practice

  • Future directions and conclusions

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Understanding International Sustainability

Sustainability can mean different things to different stakeholders. For example, Brundtland (1986) defines sustainable development as a “…development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (Our Common Future, 1987)

Based on our earlier introduction however, our view of sustainability is that it is the ability of the business to sustain its operations in the face of adverse situations and, at the same time, carrying them out with a small carbon emissions footprint. This sustainable approach to business – enshrined in its strategies and planning – is vital for the future. This is so because the traditional view deemed that all development was good.

Key Terms in this Chapter

Information Asymmetry: In economics and contract theory, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. This creates an imbalance of power in transactions which can sometimes cause the transactions to go awry. Examples of this problem are adverse selection and moral hazard. Most commonly, information asymmetries are studied in the context of principal-agent problems. (Mas-Colell, Whinston & Green, 1995)

Ecodesign: is an approach to design of products or processes with special consideration for the environmental impacts of the product during its whole lifecycle (Pezeshki, n.d).

A Life Cycle Analysis (LCA): also known as ‘life cycle Assessment’, is the investigation and evaluation of the environmental impacts of a given product or service caused or necessitated by its existence (Hendrickson, Lave & Matthews, 2005).

Industrial Ecology (IE): is the application of ecological principles to business, looking at business as a living system…So, we say that if it works for nature, it can work for business. (Shireman, 2001)

International Sustainability: is the capacity to endure. It describes how biological systems remain diverse and productive over time. It is the potential for long-term maintenance of wellbeing, which in turn depends on the wellbeing of the natural world and the responsible use of natural resources (Onions, 1964).

Biomimicry: is the science and art of emulating Nature’s best biological ideas to solve human problems. Non-toxic adhesives inspired by geckos, energy efficient buildings inspired by termite mounds, and resistance-free antibiotics inspired by red seaweed are examples of biomimicry happening today -- and none too soon. Humans may have a long way to go towards living sustainably on this planet, but 10-30 million species with time-tested genius to help us get there. (http://www.biomimicryinstitute.org/)

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