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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 people-centric 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





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