Importance Of Sustainable Development In Business

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Realization of Sustainable Development Approach in Business
The role of business is becoming critical for sustainable development because it has become a major player in generating wealth and in integrating global markets. In the post-liberalization scenario, the role of government to a large extent has reduced to that of a facilitator than that of a regulator in enforcing socio-environmental objectives in the business sector. The business sector now has to undertake voluntary and non-regulatory initiatives to meet the goals of sustainable development. This has given rise to a concept of corporate social responsibility, which now assumes greater significance to realize the goals of sustainable and balanced growth.

The late 1990s and early
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There is considerable evidence that sustainable development contributes to shareholder value in a variety of ways – not only through “tangible” contribution such as risk reduction and profitability improvements, but also through “intangibles” such as brand equity, human capital and strategy execution. In the words of Gary M.Pfeiffer, Senior Vice President and Chief Finance Officer of DuPont “every corporation is under intense pressure to create ever-increasing shareholder value. Enhancing environmental and social performance are enormous business opportunities to do just that”.
The investment community increasingly recognized the importance of intangibles in the shareholder value equation. Leadership, strategy execution, brand, human capital, environment and health performance are all currencies in today’s market place. A report on the Intangibles Economy to the European Commission noted that “Intangibles such as research & development, proprietary know-how, intellectual property and work force skills, world-class supply network and brands are now the key drivers of wealth production while physical and financial assets are increasingly regarded as
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There is mounting evidence of financial risks associated not only with corporate environmental liabilities, but of global problems such as climate change. The stock market analysts are gradually becoming aware of the importance of measurement and disclosure of non-financial elements of a business. For example, upto 86% of oil and gas industry analysts surveyed recently in the United States confirmed that company performance in regulatory compliance, employee health and safety, community service, and law suits do indeed impact the value of a firm. The financial executive Linda Descano of Citigroup noted “these issues are no longer environmental and social issues but are now recognized as strategic business
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