In this lesson, I would like to discuss two subjects. First, why do we increasingly talk about the need for a sustainable development? Second, I would also like to discuss the large shift in how companies approach environmental and sustainability demands. Let me begin with a concept as such. In the early 1980s, the member countries of the United Nations saw a need for defining what would be a sustainable development for humankind. This concept was based on a need or this perceived need for an economic development that improve the living standards of the global poor. On the other hand, a need for a more environmental protection or stronger environment protection as the world economy grew. Their arguments for this were detailed in the report, Our Common Future, published in 1987, and that was later used in the preparations for the United Nations Conference on Environment and Development, also known as the Earth Summit, held in Rio de Janeiro in 1992. The report defines sustainable development as balancing the three perspectives, economic, social, and environmental development. Companies have traditionally focused on these three aspects in this very order. First, let's make a profit while obeying formal laws and regulations. Second, let us fulfill informal societal expectations, and finally, third, let's safeguard the ecosystems and the natural resources that we use. However, in the broader discussion in society and especially in the United Nations, the focus has always been on the societal aspects and mainly improving living conditions in low and middle-income countries. Later that's been argued also that the initial focused on just balancing the three aspects of development need to be replaced by a model where the fundamental importance of ecosystem services and natural resources is recognized. This view is based on an idea that nature in itself sets a limit to the amount to environmental impact that can be caused by human societies over time, in order for these societies to be sustainable. This means that the world economy and the use of natural resources, as well as the generation of waste and pollution, need to fit safely within the natural ecosystem processes as they are fundamental for sustaining all life on earth. Now, over to the second part of this lesson, as I mentioned in the beginning, the way companies have viewed and managed environmental and social issues have changed a lot. The term sustainability was actually first used in 1713 by , Hanns Carl von Carlowitz, a German tax accountant and mining administrator. In its origin, it referred to the Sustainable Forest Management, meaning that no more wood should be harvested than what is regrown. Despite this early recognition by some companies, it was still true in the early 1980s that most companies handled environmental issues by just reluctantly accepting the regulatory demands put on industrial operations, often as part of a permit for a specific factory. However, in the 1990, many large companies shifted their attitude from being reluctant, focusing on compliance and risk management, to being more open to the long-term need for a sustainable development. An indication of this shift was the formation by many large companies of the World Business Council for Sustainable Development in 1995. If we look at what is the role of business, the role of businesses to deliver goods and services to people at prices that they can afford and with minimum impact on society and the environment. What we are looking at is that that role, that overriding role for industry, is still there. What we need to really take more serious from business is to make sure that we don't destroy the environment and other issues in our surrounding as companies. Then we start shooting ourselves in the foot. Eco-efficiency became a popular concept and it had been brought forward by industry representatives already in the earth, at the Earth Summit in 1992. The idea was to measure the relative amount of resources used and pollution created per unit of value produced. These companies argued that the environmental impacts could be reduced with the use of new, more efficient technologies and more effective ways of working. In other words, to share and promote the best available technologies and best practices was said to be critical for a more ecologically sustainable development. Many companies also found at this time that they had to respond to financial actors demand for proof that the company not only complied with the local environmental, and social legislation, but they had their internal processes to manage their businesses in an ethical and risk-reducing way. These demands are often referred to as the ESG demands and relate to the management of environmental, social, and government aspects of accompanies operation. Since the 1990s, there has been a series of UN summits and initiatives to define and agree on common sustainability goals. A number of companies have supported these processes, especially the Paris Agreement on Climate Change signed in 2015. In Paris, CEOs from industries as far-reaching as cement, transportation, energy, and consumer goods announced their own climate commitments to decrease their carbon and footprints. In the years following the number of companies that have made climate commitments and other types of sustainability-related commitments have increased. One part of industry that have kept growing during this time, and others also strongly been endorsing the sustainability agenda is to information and communication technologies sector. Many agree that digitalization is crucial to fulfill the Paris Agreement and to positively impact the sustainability development goals launched in 2015. It is interesting to note that the carbon emissions from the ICT sector corresponds to approximately 1.4 percent of the overall global emissions. While at the potential of this industry has to reduce other sectors emissions is up to 20 percent. Many other industries are also making progress regarding SDGs. This means that all forward-looking companies will need to decide for themselves how to manage sustainability issues and how to do so from a strategic business perspective. When this started, when we came to Johannesburg in 1992, then government stood up and they talked about a bipolar world. The world consisted of governments and NGOs. That was the way they describe the world. Business did not exist, and we said from business, what is this? We have to really be an integrated part in this. When we came to Rio Plus 5 in 1997 and government stood up then they started to talk about the tripolar world, governments, business and civil society. This has continued. Business has gone from not being seen as really someone that should deal with these issues to being someone that really is absolutely crucial. Governments cannot solve the issues around climate change, around a number of these other environmental issues, if they don't have a committed business community.
