IN MANY aspects, the private and public sector and not for profit organisations vary on objectives and style of business but all agree on sustainability matters. The only hindrance is the measure of the degree to which institutions are pursuing the matter. All agree on wise use and economic management of natural resources and respect for humans and other living creatures. The failure to measure achieved sustainability erodes the effort to do more on the critical matter.
PURCHASING & SUPPLY BY NYASHA CHIZU
Traditionally, the accounting framework considered sustainable businesses as those that were profitable, with a high return on investment. The triple bottom line added to financial sustainability matters that increase shareholder value to include environmental and social dimensions.
Sustainability and sustainable development cover the elements of wise use of resources and respect for all forms of life. These would lead to institutions being corporate socially responsible by balancing environmental and economic variables of the business and society in general.
The focus is therefore on the comprehensive investment results that assure business performance that take into account the interrelated dimensions of profits, people and the planet. The triple bottom line framework incorporates three dimensions of social, environmental and financial performance. The difference with traditional accounting reporting frameworks is the inclusion of ecological and social measures that in their own right are difficult to measure.
The challenge with triple bottom line is not on the definition but on how it is measured. Economic issues of profitability are measured in currency of a country. The measure for social and ecological health of a company or nation does not have a common measure. The scope of social and ecological issues is difficult to give a value. If there was going to be an agreement on placing a value on such issues for example, on ecological issues, what would be the appropriate value for a preserved wetland, preserved endangered species? What shall be the basis of such value and from what angle is it defined for aspects such as wetlands and endangered species?
Land can get a value from an economic perspective that considers location, purpose and scarcity of the resource that take into account demand and supply. Wetlands in that regard have low value for commercial purpose. This is contrary to ecological value from a sustainability perspective. The value is derived from consideration of the ecosystem where even State land in the middle of a rural area has significance though it cannot be compared to prime land in the central business district.
In that regard, triple bottom line needs to be looked at from an internal and external aspect of sustainability. From the economic angle, responsibility and respect is from wise use of economic resources. This achieves economic success internally within an organisation and impacts the society externally by achieving economic prosperity of that society.
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Environmental matters have two dimensions on the elements of responsibility and respect. The first element relates to wise use of natural resources that culminate into responsibility and respect. A company would have achieved responsibility and respect by ensuring that their exploitation of resources is capable to meet today’s needs with the future in mind. This includes consideration of future resource requirements for the organisation and the populace at large as a means to achieve societal aspects of respect and responsibility.
The other dimension of environmental matters is the respect for life incorporating humans and animals as well as fauna and flora. The internal processes need to respect animal and human rights. This achieves the protection of the ecosystems so that living things can survive in the environment. It further entails the internal processes to control pollution within the organisation that will inevitably benefit society and the environment at large. The social elements focus on respect for people. Internally, the organisation needs to respect the people inside and its staff respects society. Sustainability matters need to consider issues of the environment and people and more effort need to be put on strategies for control in addition to advocacy.
Nyasha Chizu is a Fellow of the Chartered Institute of Purchasing and Supply writing in his personal capacity. Feedback: [email protected] Skype: nyasha.chizu
