This Business School Professor Explains How Environment and Business are Interdependent
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The environment has become increasingly important to businesses in the recent years for more reasons than one. This is mainly because it provides limitations on business activities due to a growing recognition of the correlation between the manufacturing of products and depletion of natural resources.
Environmental decline also tends to increase the operating costs of doing business, particularly in relation to depletions in resource availability and the need for protection against increasingly severe climatic events through regular rises in insurance cover. The increasing cost of implementing mitigation measures is another reason.
In this way, the environment can be viewed as both an opportunity and a challenge for many businesses.
How have businesses responded to this environmental challenge? According to Dr. Simon Evans, Principal Lecturer at Anglia Ruskin University and Director of International Partnerships in the Lord Ashcroft International Business School, the response has been in two major ways.
The first is particularly pertinent to India, as it entails enhanced investment in technological inputs to leverage enterprise and innovation solutions in developing environmental resources in a responsible and sustainable manner for future commercial use. “This task is a good fit for a country that has invested so heavily in the technology sectors as a driver of national economic growth,” he opined.
Secondly, businesses are increasingly adopting elements of CSR in order to showcase their emerging ‘green’ credentials and to increase the profile of their products and services.
“It is important to stress, however, that these two business actions need to be undertaken in conjunction in order to avoid instances of ‘greenwashing’, a situation in which unscrupulous businesses falsely claim to be pursuing environmental objectives in order to further their ‘green’ reputations,” warned Dr. Evans.
Sustainable Business Development and the Economy
There is an evident correlation between rapid economic growth and environmental decline. In most sectors, the pursuit of development is based upon the extraction and use of natural resources and, in a country like India, which is undergoing a process of rapid economic reform, the issue of sustainability is viewed as a priority action.
The urgency of this task can be illustrated by the fact that 13 of the world’s 20 most polluted cities are located in India and that it is estimated that environmental problems represent a cost of around $80 billion annually, around 5.7% of its overall economy. It also remains a country driven by structural inequalities, with a significant section of its population continuing to live in poverty.
As India embarks upon its latest efforts to build a robust and secure economy, the task of ensuring sustainability is crucial to the longevity of its global aspirations. Dr. Evans feels that the mantle of international leadership comes with significant responsibility in ensuring that the pursuit of constant economic growth does not harm the society or the environment.
Private Sector to Devise Innovative Responses to Address Growing Societal Concerns
In India, a country currently pursuing a rapid trajectory of economic growth, the needs of development have placed considerable pressure on its environment as its natural resources have been exploited in order to fuel its development aspirations. As the government grapples with the challenge of balancing economic development with the protection of natural environments and society, the role of the private sector in devising innovative responses to growing societal concerns is viewed as paramount.
According to its critics, tourism development in India has proceeded in an increasingly haphazard and unregulated manner, becoming a threat rather than a positive conservation measure. Rapid growth in tourism has had a perverse effect on local communities, contributing to a growing alienation in their relationship with wildlife authorities, undermining support for tiger conservation.
In order to stimulate local communities to engage more favourably with conservation objectives, it is imperative that they are allowed to access the tourism market to provide them with an opportunity to devise and develop goods and services that will enhance the tourist experience and provide alternative sources of income to increasingly marginalised local societies.
“The best way to achieve this is through a reorientation of business commitment to the principles of eco-preneurship by supporting local endeavours to sustain the tourism sector rather than exclude them from the potential of emerging economic opportunities,” suggested Dr. Evans, whose research surrounds the environmental contribution of the business sector including corporate social responsibility.
Businesses Should Take Steps to Enhance Environmental Portfolios
In a country like India where the human population is projected to overtake that of China in the near future and the political leadership, managing impressive levels of annual GDP growth, are aspiring towards a position of global economic leadership, pressures on its environment are intensifying.
Businesses that recognize this and take steps to enhance their environmental portfolios are ideally placed to head the list of successful companies as the economy continues to grow, lifting millions more of its people out of poverty and increasing its consumer base.