Sustainability has moved rapidly up the public policy agenda and is having significant impact on corporate governance in both public and private sectors.
Professor Jan Bebbington is a New Zealand-born and trained accountant who has specialised in triple bottom line approaches to corporate reporting and the development of sustainability strategy. She spoke at a Victoria University of Wellington seminar in July titled: Triple Bottom Line: a Fad or Essential for Good Governance?
Bebbington is a professor of accounting and sustainable development at the University of Aberdeen in the Centre for Social and Environmental Accounting Research within the School of Management. She is a member of the Scottish Cabinet sub-committee for Sustainable Scotland.
Sustainability currently informs (in name at least) a great deal of what is done in UK government (both at Westminster and in the devolved assemblies). At the same time the corporate governance debate remains centre-stage, as the fallout from the high-profile corporate collapses in the US continues. Bebbington discussed how corporate governance is being affected by the sustainability agenda.
Her focus was on trends within Europe and she used examples of UK businesses that are proactive in considering how the pursuit of sustainable development would affect their operations. Although she concentrated on the corporate form, the points she made could apply to any type of entity--public, private or third sector (not-for-profit).
'Sustainable development' (SD) is a term that is widely used in Europe, whereas 'triple bottom line' (TBL) seems to be preferred in New Zealand, Bebbington noted.
Various forms of government in the UK use the phrase 'SD' when the interplay between economic, social and environmental goals are being considered.
"Indeed, the concept of SD is hardwired or mainstreamed into a number of political processes."
Bebbington outlined four examples of how SD thinking is infusing policy and politics.
1. The UK has a Sustainable Development Commission that acts as an adviser to the Westminster Government (and is appointed by and reports directly to Tony Blair). The Commission is not as powerful nor as independent as the Parliamentary Commissioner for the Environment, but the two institutions play similar roles. The watchdog evaluates UK government action on the basis of SD principles.
2. An SD strategy was initially formulated in 1992 and is currently being reviewed. It is expected that a new strategic document will be developed taking into account trends that have emerged in the past 12 years. The strategy guides policy and is supported by a large series of indicators which attempt to measure progress towards SD.
3. The Scottish Parliament (which is a devolved parliament governing most areas of Scottish life) has two elements focusing on SD. First, within its standing orders there is a requirement for all pieces of legislation to be tested by reference to the principles of SD. Second, is a cabinet subcommittee on Sustainable Scotland, chaired by the first minister (the equivalent of the prime minister) and including powerful portfolios such as finance. The sub-committee focuses on fostering policies, actions and partnerships which will lead both to a sustainable Scotland and a smart, successful Scotland.
4. Finally, the most recently devolved government--The Welsh Assembly--has, as its primary overarching objective, to seek SD for Wales.
In addition to the common use of the term 'SD', there are other related elements. Most commonly, companies will talk about their corporate social responsibility and they often relate their responsibility to the elements of SD that they can contribute to. What companies feel responsible for will depend on the accountability relationships they have with stakeholders--which vary according to the organisation and the activities it undertakes. …