Sustainability - road to a better future

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Sustainability - road to a better future

Saturday, 14 May 2022 | Sanjeev Singhal

Sustainability - road to a better future

Sustainability emphasizes the need for society to conserve resources, protect natural ecosystems, minimize pollution and promote social equity

Mankind is facing the greatest threat of climate emergency which is being termed as “Code red for humanity”.  Industrialization, urbanization and increasing population has led to unprecedented crisis catalysed by over exploitation of natural resources, and their contamination with toxic chemicals and pollutants.  There are far-reaching impacts of ever-increasing greenhouse gases on our planet. According to estimates of various agencies like, Organization for Economic Cooperation and Development (OECD) this will result in rise of earth temperature by 02 °C by 2050.

Global warming is giving rise to natural calamities like, flood, drought, melting of glaciers, etc. As per a United Nations report the human-caused rate of extinction of species of both plants and animals at present is hundreds of times higher than the natural rate in the past and as the situation is turning out it can be thousands of times higher in near future. Across the world, people are facing challenge of availability of potable water, pure air to breathe and also ever an alarming problem of land degradation.

“The Global Risks Report 2022” issued by World Economic Forum states that over a 10-year horizon, the health of the planet dominates concerns: environmental risks are perceived to be the five most critical long-term threats to the world as well as the most potentially damaging to people and planet, with “climate action failure”, “extreme weather”, and “biodiversity loss” ranking as the top three most severe risks. Human-induced climate change is causing dangerous and widespread disruption in nature and affecting the lives of billions of people around the world, despite efforts to reduce the risks. People and ecosystems least able to cope are being hardest hit.Non-degradable wastes being generated is increasing every minute and are the cause of contamination of natural resources and also causing harm to the humans. As per a recent report, a mass of plastic waste named as “Great Pacific Garbage Patch” approximately 1.6 million km in size, twice the size of Texas, is floating on the surface of Pacific Ocean.

This alarming situation is the major attention area and it is the need of the hour that Governments and non-government organizations involving individuals, communities, countries, and the globe as whole, aligns themselves with the basic principles of ‘sustainability’. Human society and economy are thriving on nature, and only harmonious existence will allow Homo sapiens to persist and thrive on

this planet. 

Sustainability emphasizes the need for society to conserve resources, protect natural ecosystems, minimize pollution and promote social equity. In 1987 the World Commission on Environment and Development, also popularly known as the Brundtland Report, defined development as ‘sustainable’ when it ‘meets the needs of the present without compromising the ability of future generations to meet their own needs’. There are three pillars of sustainability - environment, society and economy. Environmental sustainability is the most familiar concept which emphasizes on not overusing natural resources and focus on their sustainable management. Global actions are required to protect natural ecosystems and biodiversity, for ensuring clean water and air. Social sustainability has the objective to ensure that everyone has access to basic necessities like, clean, water, adequate food, healthcare, shelter, and human rights. It also means setting policies to encourage fair policies at workplace so that there is no exploitation and discrimination. Economic sustainability has been defined as practices that support long-term economic growth without negatively impacting social, environmental and cultural aspects of the community. Multi-level collaboration is required to achieve sustainability and address interconnected problems by balancing the needs of economic growth and resource conservation equally. We all should all take steps to incorporate sustainability into every aspect of our life. Our willingness to think and act differently by putting economic development and environment on equal footing as central parts of the same equation will help us resolve glaring problems like, air pollution, food shortage and food scarcity.

Entities can have positive impact on society and the economy by improving their sustainability performance. Sustainability Reporting is gaining momentum year on year due to stakeholder’s ever-rising demands for more transparent and better communication regarding their sustainability practices, initiatives and performance. Much like their global counterparts, Indian corporates too are leaning towards the reporting frameworks to demonstrate their ability to create, preserve and grow value for a diverse stakeholder base.  

The Institute of Chartered Accountants of India (ICAI) has a strong tradition of service to the country towards sustainable as well as economic development. ICAI through Sustainability Reporting Standards Board (SRSB), has taken several initiatives in the sustainability domain and is working to strengthen the sustainability reporting ecosystem in the country.With a view to strengthen sustainability reporting ecosystem in the country, important publications like, Background Material on Business Responsibility and Sustainability Reporting (BRSR) and Standard on Assurance Engagements (SAE) 3410 “Assurance Engagements on Greenhouse Gas Statements” have been released. Sustainability Reporting Maturity Model (SRMM) Version 1.0, a comprehensive scoring tool, has been developedto measure their sustainability performance in terms of four levels of maturity of sustainability reporting namely Level 1 to Level 4. Publication on “Sustainable Development Goals (SDGs) - Accountants Creating Sustainable World - Part 1, 2 and 3” has been developed to encourage all stakeholders to contribute towards the attainment of SDGs. ICAI Sustainability Reporting Awards 2020-21 and ICAI Sustainability Reporting Awards 2020-21 are being conducted to recognize, reward and encourage Excellence of Businesses in Sustainability Reporting and bring to light their outstanding contribution to the 2030 Agenda for Sustainable Development. Capacity building of the chartered accountants in this emerging area is being done by conducting online Certificate   on Business Responsibility and Sustainability Reporting. Awareness initiatives like, Carbon Footprint Challenge, ICAI Sustainability Literacy Drive, Corporate film on Simple Steps to make our Planet Sustainable, Champions of SDGs and SDG Videos have also been undertaken.Contributing to the initiatives of SEBI to create an ecosystem via Social Stock Exchanges, ICAI is in the process of developing Social Audit Standards and working on Certification Course for Social Auditors.

ICAI is partnering with stakeholders, government, regulators, and others to help maximize contribution to SDGs and also collaborating with international bodies in advancing sustainability agenda. ICAI also welcomes the announcement of formation of new International Sustainability Standards Board (ISSB) by the IFRS Foundation (IFRSF) and extends full support towards convergence to a single set of sustainability reporting standards. New initiatives have been planned in the area of Sustainable Finance, Green Bonds, ESG rating and Climate related Financial Disclosures. ESG Talk show, sustainability awareness quiz, training program for board members on ESG, tree plantation drive are other initiatives in pipeline. All these initiatives are focused towards promoting sustainable organizations that create long-term value for investors and society.

A sustainable future requires that homo sapiens live within planetary boundaries in harmony with nature. Governments and policymakers should work together to enhance national implementation and strengthen institutions to achieve the Sustainable Development Goals by the target date of 2030, leaving no one behind. As individuals, we all should contribute in addressing this global crisis by changing our mindset and habits and adopting sustainable choices in our day-to-day life. A healthy planet will thrive and nurture happy and safe survival for present and future generations.

(The writer is a C.A. and Chairman, Sustainability Reporting Standards Board. The views expressed are personal.)