Everyone, almost everyone knows what is Gold. It is what it is: a rare and precious metal with particular qualities that make it an effective medium of exchange. Let’s agree on the fact : if there was no “trust” , even the concept of valuing gold won’t have existed. Trust about people honouring the market driven value of gold. Trust about liquidity demands of the gold value being met. Trust that all stakeholders would continue accepting gold as a precious commodity !
The Gold Standard was a system under which nearly all countries fixed the value of their currencies in terms of a specified amount of gold, or linked their currency to that of a country which did so. Domestic currencies were freely convertible into gold at the fixed price and there was no restriction on the import or export of gold. Gold coins circulated as domestic currency alongside coins of other metals and notes, with the composition varying by country. As each currency was fixed in terms of gold, exchange rates between participating currencies were also fixed.
A crucial factor which helped in maintaining the standard was the strong cooperation between central banks of various nations. Just like any other system, gold standard did have its disadvantages too. There is no utopian philosophy in life in general; especially around economies, politics and the investing world.
Sustainability
Sustainability means meeting our own needs without compromising the ability of future generations to meet theirown needs. Sustainability as a concept recognises that the environment is an exhaustible resource. Sustainability is a holistic approach that considers ecological, social and economic dimensions, recognising that all must be considered together to find lasting prosperity.
In 1983, the United Nations invited former Norwegian prime minister Gro Harlem Brundtland to run ‘The World Commission on Environment and Development’. It found that after decades of effort to raise living standards through industrialisation, many countries were suffering from extreme poverty. It seemed that the economic development at the cost of ecological health and social equity did not lead to prosperity.
The “Brundtland Commission” released its report - “Our Common Future”, where it defined sustainable development as:development that meets the needs of thepresent without compromising the abilityof future generations to meet their own needs.
Pillars of sustainability
Human sustainability
Human sustainability aims to maintain and improve human capital in society. Investments in the health and education systems, access to services, nutrition, knowledge and skills are all programs under the umbrella of human sustainability. Natural resources available are limited and there is a need to balance continual growth with improvements to health and achieving economic wellbeing for everyone.
Environmental Sustainability
Ecological integrity is maintained, all of earth’s environmental systems are kept in balance while natural resources within them are consumed by humans at a rate where they are able to replenish themselves.
Economic Sustainability
Human communities must be able to maintain their independence and have access to the resources that they require to meet their needs. Economic framework should offer stability and have to be available to everyone, like stable sources of livelihood.
Social Sustainability
Universal human rights and basic necessities are attainable by all people, who have access to enough resources in order to keep their families and communities healthy and secure. Stable communities have just leaders who ensure personal, labour and cultural rights are respected and all people are protected from discrimination.
Is sustainability actually sustainable?
In the corporate world, sustainability is associated with an organisation’s holistic approach, taking into account everything, from manufacturing to supply chain to customer service. Going green and sustainable maximises the benefits from an environmental focus in the long-term, and adds economic & reputational value to the firm.
In short, playing the role of a ‘Karta’ or ‘Trustee’ for the next-generation would make us think long-term. That would mean that while we don’t shy away from consumption of good and services in general, our role would heed to the quality of “responsible consumption”.
The concept of sustainability has evolved over the years. It started of, as being just an operational issue where the companies wanted to reduce or cut waste and assess its environmental footprint. Then it evolved to chasing innovation across the entire value chain to be cautious about the firm’s dealing with the natural resources.
The global awareness and stakeholders’ ask around this topic of sustainability & business has changed the tide.These two questions are no more seen as ‘versus’ :“How can we reduce our environmental impact ?” & “How do I generate profits from my operations ?”. These questions are now part of the same goals - they co-exist like two sides of the same coin.
With the global awareness and more importantly business intent towards sustainability increasing, it would be how business would be done. There are sufficient economic modeling techniques and financial metrics which can track the externalities involved in sustainability of businesses as well as the business of sustainability.
There is a traction in investors’ activism around expectations of positive sustainability efforts of firms. This has started moving to the mainstream investing world. There are indices available to rate a firm’s sustainability and even ESG at large. Some of these indices and techniques are improving rapidly that with the usage of digital tools, neutrality of the ratings as well as the veracity of data governance would be uncompromisable. With this, we can expect global standards of reporting and frameworks that will drive all stakeholders to embrace the Sustainability-as-core-of-existence thinking.
Like the nations had agreement on a concept like “gold standard” for economic reasons, it’s time that we learn from its success and failures. If we can treat sustainability as the new and improved gold (standard), the factors we would measure global development would be far and beyond just economics ! And far more than the conferences and seminars on sustainability. And more importantly, way of living, irrespective of any chasms and -isms.
The author is corporate Advisor & Independent markets commentator
Columnist
Strategic counsel for over 27 years, with leading corporates across diverse sectors. Independent Director across multiple sectors. Advises organisations on the intersection of finance, digital, consumption economy, GEMZ (Gig Economy, Millennials, gen Z) & ESG. Coaches & mentors senior leaders. Active engagement across industry-growth policy conversations & public policy issues. Visiting faculty at various management schools and with regulatory learning centres. Prolific media columnist across topics he works with. He is also the Editor and co-author of ‘Time for Bharat’ (book on public governance). Visiting Fellow at the Observer Research Foundation. Posts all published work at https://srinath.blog