The Long Road to Sustainable Development

PRINDONESIA.CO | Monday, June 08, 2020
Inti dari keberlanjutan adalah adanya keseimbangan kinerja ekonomi, sosial, dan lingkungan hidup
Dok. Istimewa

Today, the term sustainability has become a part of the everyday conversation so we don't think about the long road that has passed.

JAKARTA, PRINDONESIA.CO – In the 1970s, there was a lot of never-ending debate between supporters of economic development against those who wanted environmental preservation. Finally, the debate was pursed into one of the resolutions taken at the United Nations General Assembly on December 19, 1983. The United Nations inaugurated the formation of the World Commission on Environment and Development (WCED) with Gro Harlem Brundtland who was former Norwegian Prime Minister, as the Chairperson and Mansour Khalid from Sudan as the Vice-Chairperson. There were 21 other commission members, including Dr. Emil Salim from Indonesia.

The official name of this commission was rarely used, people know it better as the "Brundtland Commission", in accordance with the name of the Norwegian woman who became its chairperson. Nearly four years after it was formed, the commission completed its work in the form of a report entitled "Our Common Future" also known as the Brundtland Report. The point was advocating a new approach to balance economic development with environmental protection through a concept called Sustainable Development.

The formulation of Sustainable Development in the Brundtland Report which has become the global reference until today is the "Development that meets the needs of the present without affecting the ability of future generations to meet their needs".

The Brundtland report was followed up in 1992 with the United Nations Conference on Environment and Development (UNCED). Again, this official name was rarely used and this conference was better known as the Earth Summit or the Rio Conference. The follow-up meetings were also known informally as "Rio + 10" in 2002 in Johannesburg and "Rio + 20" in 2012 which were again held in Rio de Janeiro, Brazil.

Triple Bottom Line

In 1994, a businessman who was also an intellectual and environmental activist in the United Kingdom named John Elkington translated sustainable development into a triple bottom line. The bottom line is an informal term in accounting that refers to the last number on the income statement that can be plus (profit) or minus (loss). So, the bottom line might be translated as a positive performance in Indonesian. This term is also known as economic or financial bottom line (financial or economic results).

John Elkington argued that not only must companies produce economically positive results, but also socially and environmentally. Because of that, he called it the triple bottom line. Then, some made the slogan from the triple bottom line to 3P: People, Planet, Profit which is now better known than the original term triple bottom line.

So, the essence of sustainability is a balance between economic, social, and environmental performance. If there is one element that dominates, then there is no balance anymore which results in the sustainability of a threatened business. For example, the company is very concerned about environmental and social issues, but it is not run economically so that the loss is prolonged so the business is not sustainable. Likewise, companies that merely pursue positive economic performance but forget environmental and social sustainability, this business is also not sustainable.

By considering the things above and interesting to the Indonesian context, the emphasis on the "CSR Funds" which are often found by definition alone violates the principle of sustainability, because it emphasizes just one element, while there should be a balance between the three elements already explained above.

Sustainability as a principle is rather difficult to describe operationally if there are no standard guidelines. There are two global efforts that have become guidelines for businesses who want to support sustainable development by running socially responsible businesses. First, the United Nations Global Compact was inaugurated by Kofi Annan, the Secretary-General of the United Nations in 1999/2000 which covered four major areas, namely Human Rights, Labor Standards, the Environment, and Anti-Corruption.

Companies or organizations that agree to implement it must make a written commitment, and in many countries including Indonesia, there is a network of supporting companies called the United Nations Global Compact Network. Martha Tilaar is one of around 60 entrepreneurs from all over the world who began their commitment to the Global Compact.

Furthermore, there is an international standard called ISO 26000 on Social Responsibility that has been adopted and ratified by most countries in the world. In Indonesia, the National Standardization Agency (BSN) has included it in the Indonesian National Standard (SNI) with the ISO 26000: 2013 SNI code. Specifically, for public companies (Tbk) and SOEs, this standard must be a reference in developing CSR programs aimed at achieving sustainable development. ISO 26000 covers six areas, namely Human Rights, Labor Practices, Environment, Fair Operating Practices, Consumer Issues, and Community Development towards the goal of Sustainable Development.

Deep understanding

Performance measurement based on the triple bottom line principle is made possible by using reporting standards issued by the Global Reporting Initiative, which has also become a reference for public companies in Indonesia in preparing their annual reports, which not only include financial reports but also include performance reports in the field of the living environment and social environment.

Thus, it is clear that the momentum created by the Brundtland Report in decades has been successfully operationalized. In addition to individual organizational or company commitments to support the achievement of sustainable development through CSR programs, there are also commitments by countries initiated by the MDGs (Millennium Development Goals) which since 2015 have been replaced by SDGs (Sustainable Development Goals). Both in ISO 26000 and GRI reporting standards, the emphasis is on stakeholder engagement, namely interactions with stakeholders, because they are the ones most affected by and impacting on sustainable development efforts by each company.

It is often found that in sustainability reports, companies mention efforts in supporting the achievement of SDGs of a certain number among the 17 targets agreed upon by all UN member states.

Studies on sustainable development and the efforts of individual companies through CSR programs and then in relation to community activities, all includes in the area of public affairs. Thus, consulting companies engaged in public affairs must have a deep understanding of the whole complex, including stakeholder engagement and communicating commitments about CSR.