Better governance for sustainable business*

Sustainable development is not against business interests. In fact, business can profit from it. 

Ten years ago at the Rio Summit, 50 business leaders pledged a commitment to sustainable development. That was the start of the World Business Council for Sustainable Development (WBCSD). Since then, we have trebled in size and hugely amplified the voice of business in widespread dialogue.

Business is good for sustainable development, and sustainable development is good for business. It should be at the heart of business thinking and government policymaking.

What does that mean? Well, it means tough choices and new thinking. For instance, you choose to work by a set of declared principles and to stick to them whatever the circumstances.

You say “no bribery of any kind”. You make sure it’s clear to everyone that you mean it and if anyone goes against it you ask them to leave. If you can’t win business without bribes you go without. If necessary you leave the country or you get out of joint ventures – even if there are short-term financial hits.

You set environmental standards and keep to them. If you have an important project that is likely to fail those standards, you tell your people “no go” unless they find ways to get the environmental element in line. You’ll be amazed at the innovation a challenge like that can unleash. If they can’t do it, you leave it.

You put people and communities in the frame. If you are working in a developing country and your staff take it for granted they will use the usual international contractors, tell them to think again. Make it the norm to find local firms, build local capacities.

I can hear you thinking “that’s the best way to lose business, to lose out to competition, that I’ve heard in a long time.” Not so, in the long run. Once people know you won’t bribe, once you make eco-efficiency standard practice, once you have developed local, more cost-effective, contractors, your competitive edge will be enhanced.

Care for the environment and social justice should be an integral part of the economic development that funds progress. Demonstrating this in action helps us meet societies’ expectations, and that is an increasingly important part of our commercial challenge. Being seen to share societies’ concerns attracts and motivates people to join and stay with a company. Equally, it boosts that company’s reputation with a range of interested parties who will often be opinion leaders.

In my view there is no doubt that economic, social and environmental improvement is best nurtured in open, competitive international markets where governments set stable and pragmatic frameworks for business investment. However, the benefits of markets must be extended further towards the world’s poor.

Briefly, one of the keys to sustainable progress in developing countries is foreign direct investment (FDI). But only about 5% of FDI goes to the 40 least developed countries. If that investment is to increase, especially in Africa, there must be an emphasis on establishing good governance, stable regulatory systems, pragmatic economic policies and accountability mechanisms.

But investment alone is not the answer. Linked to it is the challenge of developing Africa’s human and natural resources to the African peoples’ advantage with minimum adverse impact. We need partnerships for progress between business, governments and civil society here, and we need them urgently. For me, it’s just as urgent for business to take on board the essentials for pursuing sustainable development. Let me highlight a few of them.

We have to learn to change. We need to stimulate innovation that allows us to create wealth in ways that reflect changing concerns and deep-seated values. We should be taking on eco-efficiency as a management strategy – seeing how we can create more value with less impact in terms of energy and material. And we should be informing consumers about the environmental and social effects of the choices we offer them.

We have to demonstrate action to remain credible. That’s why the WBCSD is developing initiatives on sustainable mobility and sustainable livelihoods. And why we are partners in a project to make this summit “climate-neutral”.

Sustainable development isn’t an easy option. We need to support each other, to share problems, experiences and ideas. That’s the aim of two recent publications.

The first sets out the WBCSD’s blueprint for action. It’s called “Walking the Talk” and it illustrates the argument with 64 case studies. Ten years after Rio we know we are on a tough journey of continuous learning. WBCSD members see action to build a sustainable future as part of their commercial responsibilities. But we can pursue that most effectively in partnership with governments, political leaders, NGOs and international bodies.

The second comes from Shell and it’s a collection of sustainable development case studies from around the world – from working for biodiversity in Gabon to pioneering cleaner fuel in Thailand, from community development in Nigeria to reducing gas flaring in operations there. It is called “There is no Alternative”.

We need more initiatives like the partnership in China with the United Nations Development Programme (UNDP) on the West-East gas project. This project will be built by a joint venture with Chinese and international involvement.

The UNDP has carried out a survey to better understand the likely social impacts on people who live along the route of the pipeline. It will be part of the decision-making process. That kind of independent consultation gives invaluable input and helps avoid future, often costly, problems.

* This is an extract from a speech given during the Business Day at the World Summit on Sustainable Development in Johannesburg, 1 September 2002. Mr Watts has also participated in the OECD Round Table on Sustainable Development. More by Mr Watts can be found at www.shell.com

©OECD Observer No. 234, October 2002




Economic data

GDP growth: +0.6% Q4 2017 year-on-year
Consumer price inflation: 2.6% May 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.4% Mar 2018
Last update: 06 Jul 2018

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • International co-operation, inclusive growth and digitalisation lead the themes of the 2018 OECD Forum in Paris on 29-30 May, under the banner of What brings us together www.oecd.org/forum. It is held alongside the annual OECD Ministerial Council Meeting on 30-31 May, chaired this year by France with a focus on multilateralism www.oecd.org/mcm.
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • Ambassador Aleksander Surdej, Permanent Representative of Poland to the OECD, was a guest on France 24’s English-language show “The Debate”, where he discussed French President Emmanuel Macron’s speech at the World Economic Forum in Davos.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Papers show “past coming back to haunt us”: OECD Secretary-General Angel Gurria tells Sky News that the so-called "Paradise Papers" show a past coming back to haunt us, but one which is now being dismantled. Please watch the video.
  • When someone asks me to describe an ideal girl, in my head, she is a person who is physically and mentally independent, brave to speak her mind, treated with respect just like she treats others, and inspiring to herself and others. But I know that the reality is still so much different. By Alda, 18, on International Day of the Girl. Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018