For
those of us who measure time by watches and calendars,
and not by today¹s exotic principles of the
relativities of time, one would hope that social
and environmental concerns would progress at roughly
the same rate as political and economic activity.
One would be disappointed.
Consider
what a difference a decade can make. Over the past
10 to 12 years, political and economic events have
evolved at breathtaking speed:
- It has only been 12 1/2 years since the fall
of the Berlin Wall and the collapse of Communist
regimes in Europe. After 40 years of cold war dominated
political and economic thinking, our focus has
shifted from the nuclear winter scenarios of the
cold war to the strategic nuclear fear of rogue
states, while national and business leaders search
for a new paradigm of understanding to replace
the clearly defined dynamics of the cold war.
- The Asian financial crisis came--apparently without
warning to those who had embraced faith in the
Asian miracle. And it has largely passed as a blip
on the economic charts rather than the cataclysm
some had expected.
- Similarly,
Long-Term Capital Management collapsed. But
Long-Term Capital
Management is also
a distant memory rather than the cause of a
meltdown in the
world¹s financial systems.
- Within
the decade, companies have been created,
havew blossomed and withered
at a pace previously
inconceivable. Enron may be the poster-child
of this phenomenon, but the landscape is filled
with
energy and telecom companies whose profiles
are only slightly less dramatic than Enron¹s
rise to the top 10 enterprises in market capitalization
and its even more rapid implosion.
- The
blossom-and-bust phenomenon is not limited
to companies. Whole industries
and forms
of doing business have come and largely gone
over the past
decade. Electronic commerce and the Internet
facilitation businesses spawned by it were
not even on most
futurists¹ charts 10 years ago, but
they moved to dominate the economic scene
with massive debt
and equity infusions. Most of the specific
enterprises are now extinct and the industry
is in hibernation.
The period since 1990 has truly seen commerce
and geopolitics moving at warp speed. But
the ticking
clock of progress has moved at a dramatically
slower pace for the human sciences.
- The AIDS epidemic has nowhere been cured and
rages unchecked in large portions of the world.
- Famine remains a tragic factor in too many lives
and a trigger of social unrest in too many places.
- Despite
years of effort there is more human slaughter
than peace in the
Middle East despite
the Oslo
and Camp David Accords, while "the troubles" of
Northern Ireland continue, fortunately with
a reduced human toll, several years after
the Good Friday
Agreement.
And
as we approach the Johannesburg Summit, we must
contemplate the pace of progress since the Earth
Summit was convened in Rio de Janeiro amidst great
hopes 10 years ago. The Rio summit succeeded in
putting issues of social and environmental sustainability
on the global agenda, but the record of real achievement
is sparse. Why are these two clocks running at
such a different pace? Is it as simple and ugly
a truth as many suspect--that those with the power
to cause and implement change donıt really care? I think not. I suggest that the clock of human affairs will move more swiftly when three prerequisites are in place--the three Mıs: materiality, measurability and momentum.
Materiality. Human and social conditions must matter to those with the political and economic authority to make a difference. I suggested in the May issue of Earth Times that there is a growing convergence between the Rio perspectives on sustainability and the business imperatives of sustainable enterprise performance. I will return to this theme from time to time, but merely note for now that social and environmental sustainability will receive appropriate understanding and attention as soon as it is recognized that they are vital ingredients in securing stable growth and profitability for enterprises and economies.
Measurability. Investment is the lifeblood of any undertaking, commercial or social. Those at the controls of investment decisions have become dependent--perhaps overly dependent--on systems of measurement that allow results of those decisions to be evaluated and reported. Concepts of reward and accountability infuse the investment profiles of both the private and public sector in respect of financial commitments. Financial reporting conventions are the most obvious, but other forms of comparative performance evaluation surround the commercial investment process. But social and environmental initiatives have, until very recently, lacked any recognized tools of measurement. That is changing rapidly. New and credible tools are beginning to emerge, which will be the subject of future commentaries. Momentum. In the political economy, as in nature, the seeds of visible events take longer to germinate than to blossom. The Iron Curtain collapsed with striking suddenness in 1989 and 1990, but the causes of that collapse had been germinating for decades.
The potential for progress based on a faith in the efficacy of the three Mıs could merely be wishful thinking. But there are early-season blossoms that offer encouragement. I close with one example: the just published Annual Report for 2001 of Swiss Re, a $170 billion global insurance and financial services organization that has assembled an impressively multicultural management and an enlightened view of its responsibilities. The information just published includes an "environmental and social report" along with the more traditional "business report and financial statements." The three Mıs are prominent throughout. As an insurer, it has become a leader in environmental liability underwriting. As an innovator in financial services, it is "developing products and offering services aimed at managing environmental and societal risks." And as an investor--a formidable one at its size--the company has created a modest but growing "eco-portfolio." And
as a corporate citizen, Swiss Re organized and hosted a major conference last
year on greenhouse gas emissions.
Perhaps most meaningfully, the Swiss Re report undertakes to measure its sustainability
commitments, reporting the number and proportion of employees involved in those
activities and the extent to which its property and casualty insurance portfolio
conforms to its environmental and social mission statement.
As Johannesburg approaches, there are more causes for concern than celebration.
It may be stretching a bit to suggest that the Rio summit will be to the sustainability
movement what the Prague Spring of 1968 was to the fall of the Iron Curtain.
But the prospects for speeding up the social and environmental clock should not
be underestimated.
Richard H. Murray is general counsel of Deloitte Touche Tohmatsu.
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