The world is changing before our eyes and whether one actively participates in that or is a bystander, the changes affect all of us. This is true in the business world as well where resource crunch, power outages and labor unrest means that companies have to take extra precautions to survive the present times. When one looks at the worldwide scenario, it is full of economic gloom and forecasts of things getting worse. In this scenario, it is no longer the case that sustainability and corporate responsibility are just catchphrases or things that the companies can do at their leisure. Instead, they have become paradigms in their own right which must be followed if the companies and the environment that sustains them have to transition to a new paradigm.
The point here is that corporate behavior must change with the changing times and hence excessive exploitation of resources along with causing environmental damage would be severely punished. In this context, it is worth noting that companies around the world have adopted corporate responsibility into their business strategies.
Further, the United Nations has made several corporations around the world signatories to their Global Compact. This Global Compact is a set of principles that bind companies to social responsibility and encourage them to adopt sustainable business practices. With the Global Compact and the Millennium Development Goals set by the UN, corporates around the world have incentives to participate in creating a better world.
The ongoing global economic crisis has made sustainability a key parameter as the excesses of the capitalist era precipitated the crisis and catalyzed the movement towards sustainability. Hence, the WTO (World Trade Organization) as well as the IMF and World Bank have incorporated sustainability into their mandates and are actively encouraging and goading the corporations around the world to adopt corporate social responsibility. In China and India, the severe power shortages and labor unrest has forced many companies to address social responsibility which along with the cost to the environment because of pollution has led to severe penalties from the regulators.
Taking all these factors into account, there is now a widespread acceptance of the fact that corporate social responsibility is no longer an extra business practice but a necessity. The winds of change are sweeping across the world and it is high time the corporations realized the inevitability of change and transition to a new paradigm. Unless companies learn to do with less and do not cause damage to the environment, there is no way in which humanity is going to survive. This message must be sent loud and clear by bodies like the UN, WTO, IMF and World Bank and it is only when there is a realization of this aspect that effective and deep actions can be taken. We have to realize that change takes time and so there must be patience with the change process.
Finally, this is a time for visionary leadership and sagacious wisdom from the top CEOâ€™s and management of corporations. Without the mandate coming from the top, it is difficult to actualize change and create an environment where the future generations have something to look forward to instead of being pessimistic. This is the central challenge of our times and it needs to be seen how far the present leadership of major corporations follows the Global Compact and the Sustainability Principles set out by the UN.