The current global financial crisis reinforces the need for transparency in business.
The short-term financial gains achieved by some through the sub-prime mortgage system have had catastrophic consequences for many. This scandal has now proven that policies allowing banks and corporations to behave in this way are not socially or economically sustainable. Moreover, almost daily now the media relates stories of how environmental commitments in business will be put on hold during these times of economic gloom.
So, can we afford to be concerned with sustainability during these worrying times?
If it's any indication, it has been said in the past that inaction on climate change could lead to a loss of up to 20% of global Gross Domestic Product (GDP). That figure is much higher than that which mobilized the world into unprecedented action over the past few weeks. This is a fact that brings home that now is not the time to undo what has been achieved for sustainability over the past 10 years.
Another concern surrounding these extreme actions – i.e. governments deciding to bail out banks with billions of dollars - is that they are happening so fast, not allowing decision makers or society at large time to really consider what social consequences they could have further down the track.
Now is the time to build a culture of decision-making that is conducive to long-term economic, environmental and social well-being in the world. Sustainability reporting is a tool that can help to achieve this goal as it facilitates transparency and accountability, enables like-for-like comparison between organizations’ sustainability performance, and through the process of gathering data and information, it creates optimal conditions for new sustainability systems to be established within organizations.
Using this crisis as an excuse to move sustainability and corporate responsibility off the agenda is the wrong approach. In fact it highlights the need for policy making based on sustainable development principles is even more urgent now than ever before.
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