Human Development: Critical Role of Sustainable Business Practices

Human Development: Critical Role of Sustainable Business Practices

Human development refers to the process or efforts of expanding and improving the freedoms and opportunities of human societies and their members and improving their wellbeing. It concerns society members’ acquisition of real freedom and opportunities to decide whom to become, the way to live, and ways to improve their dignity and social, economic, and physical wellbeing. Therefore, development, above all else, concerns the effort to ensure that all members of society overcome poverty, live with dignity and that their rights and needs are fulfilled. In this context, human development focuses on society members and their choices and opportunities. One topic that relates to human development, especially in modern society, is a sustainable business, and it describes the management of businesses in ways that take into consideration or are sensitive to impacts on local and global communities, societies, economies, and environments. Sustainable business concerns the effort in the management of businesses to meet the triple bottom line (TBL), which is essentially a framework in accounting that has three elements: environmental/ecological, social, and financial. It is a critical element of efforts to expand and improve the freedoms and opportunities of human societies and their members and improve their wellbeing.

The publicity and global pressure on business establishments and industries to recognize the impact that their choices, strategies, and activities have on the environment and the society at the local and global levels is growing and intensive. This pressure especially concerns the element of responsibility to run business in methods that pose minimal adverse impacts on the economy, society, and environment at the local and global levels. I perceive this pressure in terms of the global society’s linkage of this responsibility with human rights, founded on the idea that local economies and communities have rights to the quality and protection of environmental resources as a matter of their entitlements as society members. I also understand sustainable business in close terms with the principle of corporate social responsibility (CSR), whose successful performance has developed into a critical aspect of companies’ brands (impressions/images, attitudes, and perceptions of companies among customers in the market).

While economic growth has had some positive impacts, it has come with some costs. Mahajan and Bose (2018) and Oxfam (2012) note that economic growth, over recent years, has had a positive impact on many countries, lifting millions of society members out of poverty and improving the standards of living for the middle class. However, this development has included related costs, among them worsening youth employment and social inequality, men-women wage inequalities, and environmental degradation. Economies and societies worldwide have struggled with unique environmental, social, and economic challenges. These have included global warming, economic inequity, loss of biodiversity, social insecurities, and natural disasters. These hurdles are significant because they undermine the prosperity and wellbeing of societies and their members. As such, the progress and development that societies have achieved have not met the desired standards. Besides, the process of development has had some flaws, hence the need for measures to control the excesses and adverse impacts of uncontrolled development (Mahajan & Bose, 2018). The persistence of these problems in societies and economies across the world despite increasing economic growth indicates the need to achieve a balance among the economic, environmental, and social aspects of development.

In this context, Mahajan and Bose (2018) observe that sustainable business models represent an important way of achieving this control and addressing the flaws of uncontrolled development. Business organizations and their management constitute significant stakeholders contributing to the goals of sustainable development. In a report dated 2017, the Business and Sustainable Development Commission observed the potential of a focus on only 4 elements of the United Nations’ Sustainable Development Goals (SDGs) to open market opportunities worth $12t (Mahajan & Bose, 2018). These are health, cities/energy, agriculture/food, and materials. However, it is important to note that such focus would necessitate business decision-making to integrate sensitivity to aspects of sustainability. This assessment indicates the highly significant role that sustainable business would play in expanding and improving the freedoms and opportunities of human societies and their members, and in improving their wellbeing.

In another study, Kisel’akova et al. (2019) explored whether there is a significant economic impact of specified competitiveness within European Countries on human development, the business environment, and sustainable growth. The aim of the research was to detect the interrelations among assessments of the business environment, global competitiveness, and human development in the EU. The researchers focused on several measures, including the global competitiveness index and the human development index, to achieve the objective. The global competitiveness index integrates the business and macroeconomic aspects of competitiveness into one index, assessing the competencies and abilities of nations to offer a high level of prosperity to their citizens. This is an important index in terms of sustainable business because it is dependent on how productively a nation utilizes available resources. The human development index, on its part, is a tool to assess the overall achievement of a country from economic and social perspectives, based on the health of people, levels of educational attainment, and standards of living. The basis of this index is the human development approach, which considers the abilities of people in a society to become and do desirable things in their lives, such as being well-fed, engage in work, vote, acquire education, find shelter, and participate actively in community life (Stewart, Ranis, & Samman, 2018). In their study, Kisel’akova et al. (2019) found a direct linear relationship between the global competitiveness index and the human development index, thereby suggesting that productive utilization of available resources relates closely with the abilities of people in a society to be and do desirable things in their lives. This finding supports the role of sustainable business in improving the freedoms and opportunities of human societies and their members, and in improving their wellbeing.

Maccari (2014) observe the close relationship between environmental sustainability and human development. They note that the environment and its resources are important in supporting the capacities of societies and their members to meet their needs, hence promote their comfort, safety, health, and wellbeing. In this context, the relationship between human development and the environment is close. The implication is that human beings and societies cannot develop effectively and sustainably without adequate and effective care for the environment and its resources. In this context, sustainable business has an important role to play in enabling human society to develop effective and take care of its needs in the long term.

The sources cited above indicate the critical role that sustainable business play in facilitating human development in the long term, based on the capacities of human societies to utilize available resources in the environment and the society to meet their needs. The three resources are united in their support for the critical role of sustainable business in improving the freedoms and opportunities of human societies and their members, and in improving their wellbeing. The first article, by Mahajan and Bose (2018) indicates that uncontrolled development has featured associated costs and flaws that are important to address through the integration of sensitivity to aspects of sustainability in business decision-making. The second article, written by Kisel’akova et al. (2019), found a direct linear relationship between the global competitiveness and the human development indices, hence showing that productive utilization of available resources relates closely with the abilities of people in a society to be and do desirable things in their lives. In the third article, Maccari (2014) notes the close relationship between environmental sustainability and human development. Rather than contradicting one another, the three articles support the view that sustainable business is critical in the effort to improve the freedoms and opportunities of human societies and their members, and in improving their wellbeing.

The research and discussion above have established that sustainable business is important in promoting the abilities of human societies and their members to meet their needs in the long term, and hence support improvements in their opportunities, freedoms, and wellbeing. The environment has a close relationship with human development, such that human societies are unable to develop effectively and sustainably when environmental resources are inadequate and ineffective. In the context of this understanding, several further issues or questions are important to address or explore. The first question concerns the ways in which businesses could incorporate sustainable practices in their operations and decision-making models to ensure the effectiveness and productivity of these practices. The second issue is that of regulation of industries and businesses at the national and international levels to ensure the compliance of all businesses and industries across societies and communities in the world to sustainable business practices. This is an important issue of focus because of the potential problem of some industries or firms, or some communities, countries, and regions in the world, failing to cooperate or lagging behind in efforts to promote and enforce compliance with sustainable business practices. The failure of some industries, firms, and countries to comply with these practices would defeat the purpose of promoting human development at the international and global levels because the consequences are not limited to particular regions/parts/countries of the world, but are universal. In such a context, even societies and firms that comply with the practices would suffer the consequences of failures to comply with the practices of sustainable business in other areas/industries/countries. In this background, the next question that I would ask and insist on concerns the ability and effectiveness of regulatory activities and frameworks in different societies and at the international level to enforce compliance with sustainable business practices and models. The effectiveness of such regulation would ensure that sustainable business models are adequate to yield benefits for all societies and communities worldwide in terms of promoting the abilities of human societies to fulfill their needs in the long term and hence support improvements in their opportunities, freedoms, and wellbeing.

References

Kisel’akova, D., Sofrankova, B., Gombar, M., Cabinova, V., & Onuferova, E. (2019). Competitiveness and its impact on sustainability, business environment, and human development of EU (28) countries in terms of Global Multi-Criteria Indices. Sustainability 11: 1-25.

Maccari, N. (2014). Environmental sustainability and human development: A greening of Human Development Index. SSRN paper. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2426073

Mahajan, R., & Bose, M. (2018). Business sustainability: Exploring the meaning and significance. IMI Konnect 7(2): 8-13.

Oxfam (2012, January 19). Left behind by the G20? How inequality and environmental degradation threaten to exclude poor people from the benefits of economic growth. Oxfam Briefing Paper. Retrieved from: https://www-cdn.oxfam.org/s3fs-public/file_attachments/bp157-left-behind-by-the-g20-190112-en_4.pdf

Stewart, F., Ranis, G., & Samman, E. (2018). Advancing human development: Theory and practice. London, UK: Oxford University Press.