Sustainable development:
Economy and the environment

Stephan Schmidheiny

Stephan Schmidheiny
Honorary Chairman, World Business Council for Sustainable Development

An entrepreneur who diversified his family's business in the early part of his career, in 1984 Stephan Schmidheiny created FUNDES to support the development of small and medium-sized enterprises in several Latin American countries. In 1990 he was appointed chief advisor for business and industry to the secretary general of the United Nations Conference on Environment and Development (UNCED), better known as the 1992 Rio Earth Summit. To help in this work, he created a forum of business leaders from around the world. This later became the WBCSD. He coined the term eco-efficiency for the business approach to sustainable development and was lead author for the influential 1992 book, Changing Course: A Global Business Perspective on Development and the Environment, which has been translated into more than 15 languages.

Societies and development

Learning from experience

Creating eco-efficient partnerships among business, government and civil society requires authorities to offer an enabling environment.

My contribution to this booklet is somewhat different from those of my colleagues. Elsewhere you'll read mainly of the Geneva region's successful alliances, partnerships and initiatives for sustainable development. As a contrast, I have been asked to focus on the obstacles we have faced - and the lessons we can learn from those difficulties.

From the vantage point of 2007 it may be difficult to comprehend the suspicions that were widespread only 15 years ago to the idea that business would support or aid sustainable development. Those suspicions came from inside industry as much as from outside it. Though the business leaders who originally joined what became the WBCSD all declared their commitment to sustainable development, during its first decade the Council had to work mainly to convince industrialists of the importance of the concept and demonstrate the relationship between business and sustainable development.

Environmental critics looked at members' activities for signs of «greenwash», environmentally tinted programs used to mask the perceived destructiveness of business. Their criticisms have not always been fair. Many of the companies that have made a serious effort to become more eco-efficient and sustainable have suffered heavy attacks from environmentalists because their solutions were only 80% perfect, while many companies who could not bother and did nothing got away without such a bashing.

But I think skepticism is healthy. To keep credibility with business, the WBCSD has to show that eco-efficiency keeps its eye on the bottom line. But development has to make environmental as well economic sense. Our «enemies», as some have characterized themselves, have played a significant part, along with our partners, in bringing about the shift since 1992 toward sustainable attitudes, business practices and government policies.

We still have a long way to go in building the partnerships that will achieve sustainable development. It requires education, more efficient use of resources, more open forms of democracy, as well as society's participation in decision making.

The foundation of our work for sustainable development is the realization that business cannot succeed in societies that fail. Business must work closely with governments and NGOs so that the legal and regulatory framework and the atmosphere within which it has to operate helps business play its crucial role of providing resources for sustainable development. This is the background to the WBCSD's decision to move more actively into advocacy.

One initiative has been to look at ways to bring the poor into the development process. This has resulted in a field guide that gives practical advice to companies, NGOs and government interested in working with those at «the bottom of the economic pyramid».

Several companies have already learned how to overcome the conventional obstacles. GrupoNueva has learned how to distribute products more directly into poor markets, and held a contest to produce other pro-poor business ideas. Suez found new partners to help it deliver water to poor neighborhoods in Brazil. Procter & Gamble has committed itself to creating consumer products that meet the needs of the poorest. Vodafone has developed a novel method of franchising telephone services among remote villages. Big oil and mineral companies such as Shell, BP, and Rio Tinto are also bringing business opportunities to low-income countries and communities.