The role of business in sustainable development is a key element in the coming World Summit on Sustainable Development in Johannesburg. A report published today overturns conventional wisdom by showing that it does pay for businesses in emerging markets to pursue a wider role on environmental and social issues.
Developing Value: The Business Case for Sustainability in Emerging Markets
challenges the myth that sustainability is only for rich companies in developed nations, and does not apply to the private sector in the emerging markets. Based on more than 240 real-life examples in over 60 countries, the study analyzes the business case for sustainability in emerging markets the opportunity for businesses to achieve benefits such as higher sales, reduced costs, lower risks and enhanced reputation from better corporate governance, improved environmental practices, and investments in social and economic development.
Highlighting examples from businesses in Africa, Asia, Central & Eastern Europe, the Middle East and Latin America the report refutes the argument that the business case holds only in developed markets and pinpoints the many opportunities available to diverse businesses.
The case studies cover all types of companies, ranging from a small Latvian dairy to an eco-tourism outfit in Peru to an aluminium smelter in Mozambique.
Examining information across six business success factors and seven sustainability factors, the report finds the greatest evidence for business benefits in emerging markets in the areas of cost reductions, productivity, revenue growth and market access. On the sustainability side, environmental process improvements and human resource management represent some of the most significant opportunities for creating value.
Developing Value aims to help business people in emerging markets identify these opportunities to increase profits by making progress on sustainability particularly owners and managers who are relatively new to sustainability. The report finds that every kind of company can find benefits but the best opportunities will depend on the particular drivers, circumstances and priorities of a business. It also provides tools to help managers assess and construct their own case.
The report also calls on other stakeholders like government, NGOs, business customers and investors to strengthen the business case by putting pressure on companies with poor performance and rewarding those which make improvements in their sustainability activities.
www.sustainability.com/developing-value provides a searchable database of all the case studies analysed for the report and further information, including background details, best practice examples, sustainability tools and sources of expertise. As the business case is constantly evolving, reflecting changing societal expectations, Developing Value will continue to track these trends.
The report is the result of a unique collaboration between the International Finance Corporation (IFC), the private sector arm of the World Bank Group; the strategy consultancy SustainAbility; and the Ethos Institute in Brazil. According to Peter Woicke, executive vice president of IFC, The report makes clear that sustainability is not an all-or-nothing, one-size-fits-all proposition; that sustainability can increase all elements of the triple bottom line and contribute to the public goods realm rather than simply adding economic costs; and that sustainability is a pragmatic pursuit, not an ideological exercise. In short, this report makes the case that sustainability is about increasing opportunities, not limiting them.
Peter Zollinger, executive director of SustainAbility adds, "It is often said that the
sustainability debate lacks substance. Developing Value fills this gap, providing practical examples of how companies have benefited from good environmental and social practices."