Download October 11, 2016

What is Sustainable Development and Why Does
it Matter?
In September 2015, the United Nations achieved
international agreement for its 2030 Agenda on
Sustainable Development. The agenda identifies 17
Goals and 169 targets to address a number of
economic, environmental, and social concerns
facing the world today. I was fortunate to attend
the UN Summer Academy in Bonn, Germany from
August 22-26 to learn more about the Sustainable
Development Goals (SDGs). I went to Bonn to learn
about the goals and, in particular, make linkages
to management practice. In this post, I will discuss
what the sustainable development agenda covers
and why it matters.
What is sustainable development?
The definition of sustainable development that is
used by the UN is: “Development that meets the
needs of the present without compromising the
ability of future generations to meet their own
needs.”
What do the Sustainable Development Goals
cover?
There are 17 Goals that cover five key themes.
Below are excerpts from the descriptions of the five
themes:
• People: to ensure that all human beings can fulfil
their potential in dignity and equality and in a
healthy environment; • Planet: to protect the
planet... through sustainable consumption and
production, sustainably managing its natural
resources and taking urgent action on climate
change, so that it can support the needs of the
present and future generations;
• Prosperity: to
ensure that all human beings can enjoy prosperous
and fulfilling lives and that economic, social and
technological progress occurs in harmony with
nature;
• Peace: to foster peaceful, just and
inclusive societies which are free from fear and
violence. There can be no sustainable development
without peace and no peace without sustainable
development;
• Partnership: to mobilize the means
required to implement this Agenda through ... the
participation of all countries, all stakeholders and
all people.
How is the Sustainable Development Agenda
different to other agendas such as the
Millennium Development Declaration?
Eradicating poverty is seen as an “indispensable
requirement of sustainable development.” This is
why the Sustainable Development agenda
compliments and extend other agreements. For
example, the Sustainable Development agenda
extends the 2000 Millennium Development Goals,
which were designed to eradicate extreme poverty
and improve the health and welfare of the world’s
poorest people by 2015; it complements the 2015
Paris Agreement on Climate Change.
Another defining characteristic of the Sustainable
Development Agenda is that it is intended to apply
to all economies, not just the world’s poorest. This
is why economies such as the USA need to pay
close attention to the agenda as the USA (alongside
the other 192 economies that signed the
Sustainable Development agreement) will now be
measured against how well it achieves the goals. Why is sustainable development on the radar
now?
There are growing fears that current levels of
economic development are not sustainable. A key
focus is the impact economic growth has had on
the environment - in particular human activity that
has caused an uptick in greenhouse gases such as
methane or CO2, which in turn have caused the
atmosphere to retain heat.
Climate change was first introduced back in 1896
when Svante Arrhenius predicted that emissions of
carbon dioxide due to the burning of fossil fuels
and other combustion processes were large enough
to cause global warming.
But it is also important to put the concept of global
warming into current context. In 1896, when
Arrhenius first started writing about climate
change, only 1.6 billion people lived on the planet
and the world GDP was valued at around US$1.6
trillion. Now, our planet is home to 7.2 billion
people and GDP has grown by about 4000%.
Not only has the population grown, but defining
characteristics of the population have changed. For
example, 700 million fewer people live in extreme
poverty conditions in 2010 than in 1990. But as
poverty goes down, protein consumption goes up
and farming methods become more intensive.
Another phenomenon is that of the rising global
middle class, which is predicted to increase from
1.8 billion people in 2009 to 3.2 billion by 2020
and 4.9 billion by 2030. Most growth will come
from Asia. In fact, by 2030 Asia will represent 66%
of the global middle-class population and 59% of
middle-class consumption, compared to 28% and
23%, respectively in 2009.
As the composition of the population changes,
policy makers have turned their attention away
from economic development to sustainable
[economic] development.
Achieving sustainable development requires
tradeoffs
As the discussion above indicates, a sustainable
development agenda requires tradeoffs across three
components: economic, social and environmental.
For example, eradicating poverty is accompanied
by more intensive farming methods; the rising
middle class leads to more industrialization and/or
growing cities. Each of these changes come at an
environmental cost. So the interlinkages between
economic, social and environmental issues need to
be considered.
Other agreements such as the Millennium
Development Agenda or the Paris Agreement on
Climate change tend to focus on one of the three
components of sustainable development: economic,
social or environmental, whereas the SDGs take
into account the relationships between these three
components.
In addition, a number of the Sustainable
Development Goals are new and relate to
implementing the sustainable development agenda.
Issues of implementation were largely overlooked
in, e.g., the Millennium Development agenda.
Examples of these new goals include: • Goal 8:
Promote inclusive and sustainable economic
growth, employment and decent work for all; and
•
Goal 9: Build resilient infrastructure, promote
sustainable industrialization and foster innovation.
Aside from the relationships between social,
economic, and environmental concerns, what
else does the Sustainable Development Agenda
spotlight?
The UN Summer Academy was action packed and
we were fortunate to hear from many speakers
covering a vast range of topics. I personally came
away with a few other insights that will shape my
work in this space:
• Since not all growth is
sustainable, countries and organizations should
consider the economic consequences of lower
growth targets as they balance these against
environmental and social considerations. • In
addition, economic growth in high income
countries has slowed. This might be because
younger generations (e.g., Millennials and
Generation Z) care less about consumption and
more about the planet than generations before
them. Therefore, not only do organizations need to
pay attention to the Sustainable Development
Goals, and the tradeoffs they require, but also
slower economic growth might well be the new
normal.
• While economic growth gives people and
organizations more choices, measures of economic
growth should be considered alongside peoplecentric measures such as human capital
development, inclusivity, happiness or well-being,
and environment-centric measures such as
reducing the carbon footprint. That is economic
growth should be repositioned as the means to the
end, rather than the end in and of itself.
•
Innovation has both positive and negative
consequences. For example, innovation can be
directed at productivity improvements, some of
which can deplete natural resources, or new
product development, some of which results in
over-consumption. Innovation also ensures
organizational and community sustainability.
Again, tradeoffs need to be made.
There is much work to be done to better
understand and implement the Sustainable
Development Goals but for now, the message is
clear: business as usual is not an option.
With the author's permission.
Jenny Darroch Innovation, Entrepreneurship, Strategy and
Growth. Drucker School of Management