72194 Sustainable Development and New Zealand
Sustainable development: a revolution or business as usual?
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1.1 The many faces of sustainable development
The concept of sustainable development ﬁrst appeared in 1980 in the IUCN World Conserva-
tion Strategy (cf Hopwood, Mellor, & O’Brien, The term was famously deﬁned seven
years later by the World Commission on Environment and Development in their report Our
(also known as the Brundtland report) as
“development that meets the needs of the present without compromising the abil-ity of future generations to meet their own needs” (WCED,
Although the Brundtland deﬁnition of sustainable development has been widely cited—asearch on turns up more than 8000 published papers—the term, its properdeﬁnition and policy implications have been the subject of continuing debate (Costanza &Patten, to such an extent that Pearce felt compelled to refer to the collectingof diﬀerent and incompatible deﬁnitions of sustainable development as “a popular pastime”.
This comes as no surprise, as the term sustainable development is widely open to interpre-tation that may depend on the ideological mindset of the listener (Lélé, What may beinterpreted as a call for fundamental change towards “a world of environmental stability andsocial justice” by some (Wackernagel & Rees, has also been interpreted as an unfortu-nate label for the somewhat oxymoronic term ‘sustainable growth’ (cf Holliday, Schmidheiny,Watts, & World Business Council for Sustainable Development, p.15).
In the following I shall discuss diﬀerent deﬁnitions of sustainable development and their
underlying assumptions. Furthermore, I shall take a look at what inﬂuence the adoption ofsustainable development has on business practises.
2.1 Towards clarity
As Parris and Kates note, most deﬁnitions of sustainable development describe a re-
lationship between economy, environment, equity, and society, yet proponents of sustainable
development diﬀer in their responses to the three systemic questions that Costanza and Pat-
ten proposed as a way to derive practical implications and indicators from any given
approach to sustainable development, namely (a)
what system (or property thereof) should
be sustained; (b)
for how long; and (c)
when to assess whether the system has persisted.
Without this systemic approach to sustainable development and methods to evaluate a
given system, deﬁnition of the term is a meaningless pursuit. To avoid adding to the set ofincompatible deﬁnitions I shall consider sustainable development, for the purposes of this
discussion, to be a set of frameworks designed to address a range of diﬀerently weightedenvironmental and socio-economic concerns; associated with every such framework are a setof goals and indicators to measure the performance of a system that is subject to the actionsspeciﬁed in the framework.
2.2 Sustainability as capital transfer
The plethora of conﬂicting deﬁnitions of sustainable development reﬂects the multitude of
ideas about what is to be subject to development and what should be sustained (Hediger,
In general, sustainable development requires that some measure of human well-being
persists over a given interval (Pearce, This means that any action that likely degrades
human well-being in the future must be compensated for. According to Pearce the
literature on sustainable development identiﬁes the passing on of capital as the mechanism by
which future generations are compensated. Just as ﬁnancial capital enables an entrepreneur
to invest and derive interest as a way to generate proﬁt, “the transfer of capital bequests” to
future generations is tantamount to a transfer of capabilities suﬃcient to generate well-being
(Pearce, This abstract concept of a capital stock includes manufactured capital, e.g.
infrastructure, machinery, etc., as well ‘natural’ capital, such as ecosystem integrity, biodi-
versity, the stock of natural resources, and so on.
2.3 What is to be sustained?
Proponents of sustainable development diﬀer in what they consider a part of the capital that
may not diminish as it is passed from one generation to the next (Pearce, The diﬀerent
viewpoints on what must be sustained usually lie within the spectrum from what has been
termed ‘weak sustainability’ to ‘strong sustainability’ (Hediger,
Weak sustainability, according to Pearce is “indiﬀerent to the form in which we
pass on the capital stock”. This implies that a reduction of natural capital can be oﬀset byman-made capital and vice versa. From the point of view of weak sustainability, the focusis on the maintenance of the aggregate stock of total capital, both natural and man-made(Hediger, The assumptions of weak sustainability are especially apparent in the en-ergy industry that faces depletion of non-renewable fuel resources. In an attempt to balancethe reduction of natural resource stocks (natural capital), the industry invests in technology(man-made capital) to improve the eﬃciency of resource extraction, as well as new technol-ogy that depends on renewable forms of energy (substitution of one type of natural capitalfor another) (Pearce, Hediger,
Strong sustainability on the other hand does not make the assumption that every form of
1To ensure that total capital is an accurate representation of potential human well-being, it must of course
be normalised over the total population size.
capital can be substituted by another. Instead, some functions provided by natural capital(called ‘critical natural capital’) are deemed irreplaceable (Gutés, This is an obviousconsequence of the multi-functionality of what is usually considered a mere resource in aneconomic context. Dyllick and Hockerts mention forests as an example to illustratethat natural capital not only represents a resource base, but also provides other functions thatcan be lost as resource depletion progresses even if a substitute for the resource could befound. A minimum requirement under the model of strong sustainability is hence, that thestock of critical natural capital be protected in addition to ensuring that the total stock ofcapital persists (Pearce,
The minimum requirements of neither weak nor strong sustainability are suﬃcient for
achieving the goal of sustainable development, however, as that necessitates the satisfactionof basic human needs, including but not limited to adequate food and water supply, education,and health care (Hediger,
2.4 Corporate sustainability
In the context of corporate sustainability, three types of capital are to be maintained: eco-
nomic, natural, and social capital (Dyllick & Hockerts, The meaning of economic
capital is rather self-evident; natural and social capital in this context, however, deserve a
little more explanation.
Ayres considered the industrial system’s consumption of resources and produc-
tion of both desirable and undesirable outputs as an ‘industrial metabolism’. An industry’soperations are considered ecologically sustainable
if the rate of consumption is equal or be-low the rate of natural reproduction, and if undesirable outputs are emitted below the rateof absorption by natural ecosystems (Dyllick & Hockerts, Social capital
consists ofhuman capital (including employee skills and strength of business relations) and societal cap-ital (the relations between businesses and communities) (Dyllick & Hockerts, Sociallysustainable companies, according to Dyllick and Hockerts
“add value to the communities within which they operate by increasing the humancapital of individual partners as well as furthering the societal capital of thesecommunities.”
It rarely makes sense to treat these three forms of capital as separate entities, as can be
seen in the example of eco-tourism. The business of Elm Wildlife Tours, an eco-tourism busi-ness operating on New Zealand’s Otago Peninsula, for example, depends on the successfulmaintenance of natural capital, i.e. the continuing survival of threatened species such as theYellow-eyed penguin and the New Zealand sea lion. Their ﬁnancial interests are inextricablylinked to species conservation, i.e. maintenance of natural capital, even as far as motivatingactive conservation eﬀorts (Green Globe, This in turn, in addition to oﬀering educa-
tional tours, ‘adds value’ to the local community and thus increases the community’s socialcapital.
While these connections between the three types of capital may not be as obvious in other
sectors, the complementarity between manufactured and natural capital is well-established inthe literature (cf Daly,
2.5 ‘Sustainable growth’ or: The business case for sustainability
The deﬁnitional ﬂexibility of the term “sustainable development” has been a factor in its
adoption by businesses. DeSimone and Popoﬀ see the concept of eco-eﬃciency—
the idea that negative environmental impact of business practises is ineﬃcient and inher-
ently wasteful—at the heart of sustainable development. Within the context of continuous
growth, a notion that survives in the term “sustainable growth” (cf Holliday et al., eco-eﬃciency is an extension of quality control. While the goal of quality control is ‘zero
defects’, eco-eﬃciency is directed towards ‘zero emissions’ (DeSimone & Popoﬀ, Al-
though advocates of eco-eﬃciency, such as DeSimone and Popoﬀ often point out the
advantages of this management philosophy for both the ﬁnancial bottom line and the envi-
ronment (and justly so), eco-eﬃciency does not imply sustainable development, although the
opposite is certainly true (Dyllick & Hockerts, As Dyllick and Hockerts argue,
sustainability (without the untenable assumption that all types of capital can be substituted
for one another) not only requires relative improvements—something that can undoubtedly
be attained through eco-eﬃciency—but also demands any activity to stay within the absolute
limits of ecosystem carrying capacities. A business whose operational improvement rate due
to increased eco-eﬃciency is lower than its rate of growth will inevitably fail to be environ-
mentally sustainable (Dyllick & Hockerts,
2.6 Measuring sustainability
As a consequence, it is necessary to measure and report sustainability performance. Re-
viewing a decade of environmental reporting, Kolk notes a trend towards increased
reporting of environmental and social performance along with ﬁnancial reports. Although
this so-called triple bottom line reporting is a step in the right direction, it is not actually
what is required to accurately gauge a company’s performance with respect to sustainability
(Gray & Milne, As Gray and Milne put it,
“the triple bottom line is not a triple bottom line at all but a ﬁnancial bottom linewith a little bit of social and environmental added.”
Kolk concurs in his review, stating that full sustainability or environmental perfor-
mance reports are still rare. He also criticises that a lack of universally agreed performance
indicators makes it diﬃcult to “distinguish ‘greenwash’ from ‘realistic’ reporting”, even whenreports are externally audited.
As I hope to have demonstrated, the term sustainable development is vulnerable to wide
interpretation, some of which allow for potentially unsustainable business practises that are
in compliance with ‘weaker’ interpretations, but violate one or more of the constraints of
strong sustainability. While all interpretations are concerned with the maintenance of capital
over time, deﬁnitions of sustainable development based on the concept of weak sustainability
make the untenable assumption that the degradation of one type of capital can be made up
for by increasing another and hence conservation of the total aggregate capital is suﬃcient.
Although on average more businesses than in previous decades are now including so-
cial and environmental performance indicators in what is called triple bottom line reports,the reporting quality is relatively poor, biased towards the ﬁnancial bottom line, and gener-ally insuﬃcient to evaluate a company’s performance with respect to sustainable develop-ment (Gray & Milne, This situation could be improved if a universally accepted set ofscience-based sustainability indicators were adopted (Parris & Kates, and legislationwere passed that required environmental reporting to be in compliance with said indicators(Gray & Milne,
Finally, to remove barriers that keep the general public from identifying with sustainable
development, communities must be strengthened, thereby promoting individual agency ina climate of general mistrust in governments and businesses as agents of change towards asustainable society (Macnaghten & Jacobs,
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