Sustainability is good business

Sustainability, the triple bottom line of economic profitability, respect for the environment and social responsibility: these are the new buzzwords of many a corporate annual report. Global companies everywhere are falling over themselves to declare their adherence to the principles of sustainable

development. Is this a new moral crusade on the part of big business, or simply the result of pressure from demonstrators like those in Seattle and Genoa? For some, either of these arguments may be true, but on the whole, sustainability is largely a question of good business. In fact, there is no fundamental contradiction between concern for the environment or social responsibility and the profit motive that has largely created the developed world as we know it today. In short, greed is still good for you.

Not that unrestrained market forces will deliver sustainability. There is clearly a role for government in setting the right framework for markets to deliver those broader based outcomes we all want for our planet. On the environment side, there are externalities - costs not borne by the polluter - that are excluded from influencing the market at present. This has occurred for various reasons, but mainly because resources, like fresh air and clean water, were simply treated as costless until recently Historically, we have seen examples of such externalities being successfully internalised - the bringing of common grazing lands into private ownership, thereby creating the incentive to conserve, is one case - though not without conflict.