5. “BANK OF AMERICA MERRILL LYNCH RECENTLY PUT OUT A GIANT REPORT ON
THE FUTURE OF AGRICULTURE AND WATER . AMONG THE TAKEAWAYS: WATER
SCARCITY, AND THE RESULTING AGRICULTURAL CONSTRAINTS, IS THE BIG-
GEST GLOBAL PROBLEM OF THE 21ST CENTURY (FERRO, 2015).
When considering sustainability as a core component in strategic planning,
there are many complex issues that need to be examined to inform strategy
construction, not the least of which is a lack of consistency as to how the term
“sustainability” is defined. In the nearly thirty years since the Brundtland
Report and the coining of the term “sustainable development”, the meaning
of sustainability has been interpreted in countless ways. Therefore while
some companies have embedded sustainability into their strategic planning
processes and have created comprehensive Corporate Social Responsibility
(CSR) programs that are aligned with their respective business interests and
customer expectations, there remains countless instances where a gap exists
between a given company’s CSR program and the company’s consumers’
expectations of what that CSR program should entail.
But in addition to a need for understanding what exactly sustainability
means in order to incorporate sustainability in strategic planning, there is
also a lack of integration in CSR efforts of economic, social and sustainable
efforts. These three aspects of CSR often conflict. Lacking a holistic approach,
sustainability efforts are often subsumed by financial and social priorities.
To examine the need for sustainability as a core component in strategic
planning, this paper is divided into three major sections. In Section I,
sustainability and CSR are placed within the context of climatic change,
the planet’s agricultural capacity and ability to provide fresh water to its
inhabitants, which are examined in detail. In Section II the case for an
ethical framework consisting of an obligation to future generations as part
of a core component of sustainability strategic planning is discussed and
justified. Finally, in Section III, the need for sustainability to be integrated
in a holistic approach to strategy, and how to accomplish integration, is
discussed in detail.
Executive Summary
The world is running out of water.
New NASA satellite data shows that
a majority of the world’s largest
underground aquifers — the
predominant source of our drinking
water — are being depleted faster
than they can be refilled. From its
recent 2003 to 2013 study, NASA
concluded that 21 of the 37 largest
aquifers (underground reservoirs
that store groundwater from rain
and snow) are running out too fast
to be replenished. An additional 13
are declining at a rate that puts them
in a category NASA calls the “most
troubled” (Speiser, 2015).
This map shows the world’s 37 largest aquifers and their state of depletion. Red indicates aquifers that are being depleted
faster than they can be replenished (in millimeters). Cream indicates aquifers that have remained relatively stable, and blue
aquifers are in good shape at present (Speiser, 2015).
98 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
7. 1312 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
“THIS WE KNOW: THE EARTH DOES NOT BELONG TO MAN: MAN BELONGS TO
THE EARTH…. WHATEVER BEFALLS THE EARTH, BEFALLS THE SONS OF THE
EARTH. MAN DID NOT WEAVE THE WEB OF LIFE: HE IS MERELY A STRAND IN
IT. WHATEVER HE DOES TO THE WEB, HE DOES TO HIMSELF”–CHIEF SEATTLE,
1855 (GUNDLING, 1990, P. 198).
Few would doubt the truth in the widely quoted words of Native American
Chief Seattle to President Franklin Pierce expressing the Native American
environmental ethic, however when considering obligations to future gen-
erations concerning the environmental health of the planet we live on and
its diversity of life that sustains us all, the issue is not so easily expressed
or straightforward. As a species, human beings are not focused on the
future nor the ecosystem on a planetary scale, but rather the immediate
and near-term circumstances of individual lives in individual localities.
Often these immediate and near-term circumstances involve the daily grind:
getting up in the morning, feeding the family, getting the kids to school,
going to work. At work the focus is on finishing the next report, attending
a staff meeting, learning of the latest product, trend, and business theory
that will drive new sales, transform the workplace and increase profit-
ability—which results in a stellar quarterly report, bonuses all-around,
an increased stock price and shareholder satisfaction. After such a hectic
day when corporate goals have been met, a night out in celebration might
follow, asking the spouse and kids how their day went, a great dinner,
maybe a dessert, some television or a movie before bed; and sleep before
the alarm clock announces the next turn of the cycle. Maybe a reference
to sea-level rise, Miami Beach’s struggles to hold back the sea, melting ice
over Greenland or another California drought update or monthly report
showing the hottest August on record popped up in a Facebook newsfeed;
but upon seeing these updates, most people dismiss them as something
too big to control, something outside one’s own control or recognize that
the event is something that is serious but won’t be a problem for some time.
After all, what do such events have to do with our daily 24-hour routines?
Introduction
Why a Narrative Synthesis
As a species, human beings are
not focused on the future nor the
ecosystem on a planetary scale, but
rather the immediate and near-term
circumstances of individual lives in
individual localities.
When considering sustainability as a core
component in strategic planning, both from
a business and an ecosystem perspective, it
is necessary to consider an ethical frame-
work that will ensure a habitable world for
future generations. It is necessary because
the world of today is at a nexus where the
global stability that has allowed human
beings to thrive is entering a period of a
“new normal” in terms of greater dispari-
ties between the haves and the have-nots,
major climatic change and geopolitical and
environmental instability brought about by
a rapidly increasing population, increasing
resource use along with degradation and
depletion, and subsequent anthropocentric
climate change.
Mastering strategy is part art and science
because it involves creativity. “According
to [renowned Professor of Strategy Henry]
Mintzberg, understanding how strategy can
be viewed as a plan, as a ploy, as a position,
as a pattern, and as a perspective is impor-
tant. Each of these five ways of thinking
about strategy is necessary for understand-
ing what strategy is, but none of them alone
is sufficient to master the concept” (Ketchen
and Short, 2013, p. 6). However, sometimes
it becomes necessary to throw the old mod-
els out when models become broken, and
just when one believes one has mastered
the art of strategic thinking through study
and practice of existing theory; events occur
that change the rules of the game and defy
understanding.
The world witnessed this phenomenon in
politics May 4, 2016 when Donald Trump
became the Republican Party’s presump-
tive nominee heading into the United States
Republican National Convention. What had
seemed unthinkable only a year before,
when Trump announced his campaign, has
become reality. Climate change is the ulti-
mate unthinkable in global disruption. Not
a single industry will be left unchanged by
the global climatic and geo-political impacts
poised to occur in timeframes as little as
the next ten or fifteen to thirty-five years.
Remaining focused then on short term
profitability, quarterly or annual reports is a
strategy for business failure when it is now
necessary to design and plan for long-term
sustainable business strategies.
While many of the challenges of climate
change can be predicted, many cannot.
Climate change will also present new op-
portunities, some of which are known, but
most are not. Therefore strategic sustain-
able planning must encompass anticipa-
tion of emergent and adaptive strategies to
a rapidly changing external environment.
“Having a well-formulated vision employees
embrace can therefore give an organization
an edge over its rivals (Ketchen and Short,
2013, p. 30). Such a vision will demand cre-
ativity, not just from a CEO who historically
has been the key architect of any given com-
pany’s strategic planning, but also from the
entire executive team, department heads,
mid-level managers and employees.
To examine the need for sustainability as a
core component in strategic planning, this
white paper is divided into three major sec-
tions:
In Section I, climatic change is examined in
detail in terms of increasing water depletion
and scarcity in environmental, business and
geopolitical contexts. Water is the major
prerequisite for life, and water is also a
necessary prerequisite for agriculture and
business. Coming to terms with water sup-
ply and demand and ensuring a sustainable
supply is a critical strategic concern every
business and governmental entity must ad-
dress.
In Section II the case for an ethical frame-
work consisting of an obligation to future
generations as part of a core component of
sustainability strategic planning is dis-
cussed and justified.
Finally, in Section III, the need for Strategic
Sustainability is discussed in detail, includ-
ing the considerable challenges involved
with implementing it on a long-term basis—
not just for short term business competitive
advantages, but for long-term business and
human survival. Achieving strategic sustain-
ability may well represent the ultimate in
coopetition; and upon which, global society
as we know it depends.
Climate change is the ultimate
unthinkable in global disruption.
Not a single industry will be left
unchanged by the global climatic and
geo-political impacts poised to occur
in timeframes as little as the nest ten
or fiftenn to thirty-five years.
8. 1514 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
Climate Change,
Water Depletion
& Scarcity
Section I
9. 1716 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
ISMAIL SERAGELDIN, FORMER VICE PRESIDENT FOR SPECIAL PROGRAMS OF
THE WORLD BANK WARNED IN 1995: “IF THE WARS OF THIS CENTURY WERE
FOUGHT OVER OIL, THE WARS OF THE NEXT CENTURY WILL BE FOUGHT OVER
WATER.”
In truth, “the challenge of freshwater scarcity and ecosystem depletion is
rapidly emerging as one of the defining fulcrums of world politics and hu-
man civilization. A century of unprecedented freshwater abundance is being
eclipsed by a new age characterized by acute disparities in water wealth,
chronic insufficiencies, and deteriorating environmental sustainability across
many of the most heavily populated parts of the planet.
Just as oil conflicts played a central role in defining the history of the 1900s,
the struggle to command increasingly scarce, usable water resources is
set to shape the destinies of societies and the world order of the twenty
first century. Water is overtaking oil as the world’s scarcest critical natural
resource. But water is more than the new oil. Oil, in the end, is substitut-
able; but water’s uses are pervasive, irreplaceable by any other substance,
and utterly indispensable” (Solomon, 2010, p. 367).
Climate Change,
Water Depletion & Scarcity
Section I
“Water is more than the new oil. Oil,
in the end, is substitutable; but water’s
uses are pervasive, irreplaceble
byany other substance, and utterly
indispensible” (Solomon, 2010, p.
367).
Proponents of the realist theory of political
science would argue that Serageldin is correct,
and that in light of increasing water scarcity,
conflict over water is inevitable. However, since
Serageldin’s pronouncement more than twenty
years ago, while there has been conflict, not
one water war has ensued and international
cooperation over water issues has been the
norm. According to neoliberal institutionalist
thinking water scarcity provides a motive for
cooperation since water interests transcend
national boundaries and nation states stand
to gain from cooperative efforts addressing
water supply issues (Dinar, 2009).
Constructivists would argue that cooperative
efforts would be expected so long as states
can gain from those efforts. Should the status
quo become upset, constructivist thinking
would indicate states would reevaluate their
position(s) and pursue courses of action in
reaction to the changing situation (Viotti and
Kauppi, 2009). So which school of political
science thinking is correct and which outcome
is most likely? Water wars or water peace? As
Allan (2009), Bierman and Boas (2010), Solomon
(2010) and others illustrate, the state of world
peace and the future of human civilization is
balanced on the delicate fulcrum of each na-
tion state’s supply and access to freshwater.
While the world’s leaders may choose dif-
fering courses of action in response to water
scarcity according to the political school
of thought they either subscribe to or the
various national circumstances that force
their hands, ultimately they will all share
the same cause of action: global climatic
change that affects the water cycle and
global precipitation distribution combined
with accelerating population growth. Hu-
manity is at a critical nexus. As the water
cycle, and climatic change affecting the
water cycle, is the lynchpin that determines
each nation’s water supply, business access
to water for agriculture and manufactur-
ing, and individual access to water for basic
human needs; it is necessary to understand
what the water cycle is and how it is af-
fected to understand the growing magnitude
of global water scarcity issues.
Simply put, the water cycle is the circula-
tion of freshwater on the planet. The water
cycle begins with evaporation from the
world’s oceans. Each day, solar heating
causes water to evaporate from the surface
of the oceans and enter the atmosphere,
where the water is cooled, condenses into
clouds, and eventually falls as rain or snow.
When water falls on mountain tops dur-
ing cold weather, it builds snowpacks and
increases glaciation. The snowpack stores
water for release into rivers when tempera-
tures warm, thus ensuring a steady supply
of water in high latitudes and mountain-
ous regions well into summer and fall as
the snow and ice melt. When water falls in
warmer climes, water infiltrates the soil to
be captured and used by plant life and then
released back into the atmosphere through
plant transpiration, percolates into ground-
water, or most commonly, runs off in rivers
to the sea where the process of evaporation
begins again. In this way, water is spread
to every area of the planet and provides
for the sustainability of all life, unless it is
intercepted and held in lake basins or oth-
erwise diverted from its natural flow by the
activities of man.
“The same, finite net, 4/1,000th of 1 percent
of Earth’s total water that recycles endlessly
and falls over land in the process of evap-
oration-transpiration and precipitation has
sustained every civilization from the start
of history to the present. Man’s practical
access to this renewable freshwater supply
remains limited to a maximum of one-third,
since about two-thirds quickly disappears in
floods and into the ground, recharging
11. 2120 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
groundwater reserve on the planet, but not
only is it situated beneath Libya, it extends
beneath Egypt, Chad and the Sudan as well
and these countries object to Libya’s plans
to exploit the Nubian Sandstone Aquifer’s
resources. While the Nubian Sandstone
Aquifer may provide water for some time, it
shares the same characteristics as the Ogal-
lala and the Saudi aquifers—the water they
contain is fossil water. Over the eons, water
slowly percolated into the ground until
it couldn’t percolate any further because
it was trapped by impermeable layers of
rock. While it took nature tens of thousands
of years to fill these aquifers, it has taken
man only the better part of one century to
mostly deplete them. Once depleted, these
aquifers cannot be recharged and the agri-
cultural industries that depend on them will
disappear (Solomon, 2010).
The altering of the planetary water cycle,
the inequitable redistribution of available
water from changing climatic conditions,
the growing earth’s population and increas-
ing demands on available water, and the
depletion of fossil groundwater that has
allowed civilizations to grow unsustainably
are all potential pathways to conflict, and at
the same time, potential pathways to peace.
“While it is true that water disputes have
taken a military turn on at least seventeen
occasions during the period 1900–2001, the
last all-out war over water took place 4,500
years ago—between the city-states of La-
gash and Umma. In comparison, thousands
of water agreements have been concluded,
the oldest dating back to 3100 BCE. Conse-
quently, as Wolf and Hamner have noted,
‘the more valuable lesson of international
water is as a resource whose characteristics
tend to induce cooperation, and incite vio-
ience only in the exception’” (Dinar, 2009, p.
109). However, in the past, it was relatively
easy to conclude water agreements when
there was enough water to go around. How
will these agreements be concluded when
there isn’t any water left to share? Increas-
ing water scarcity presents paths to both
peace and conflict.
“While violent conflicts over transboundary
water may be rare, political disputes and
‘conflicts of interest’ over shared freshwater
are not. This is the case in regions currently
known for relative peace among the regional
actors (such as Europe and North America)
and regions known for relative political
volatility among neighboring states (such as
the Middle East and Central Asia). Conse-
quently, the literatures on environment,
security, and hydropolitics have turned to
explaining why disputes have taken place
in such regions. Similarly, studies have
invested much effort in understanding how
cooperation ensues or fails in international
river basins” (Dinar, 2009, pp. 109-110).
Dinar goes on to explain that the relation-
ship between water scarcity and coopera-
tion is non-linear. Referencing John Rawls
and Elinor Ostrom, Dinar articulates what
we term as a “Just Right” Goldilocks window
of opportunity for cooperation. “Rawls has
conjectured that when natural and other re-
sources are abundant, schemes of coopera-
tion become superfluous. Conversely, when
conditions are particularly harsh, fruitful
ventures break down. A situation of moder-
ate (or relative) scarcity, therefore, provides
a suitable impetus for action between par-
ties. Similarly, Ostrom has argued that for
cooperation to occur, ‘resource conditions
must not have deteriorated to such an ex-
tent that the resource is useless, nor can the
resource be so little used that few advan-
tages result from organizing.’ By extension,
if water were abundant, a treaty dividing the
waters may be unnecessary. Conversely, in-
stances of very high scarcity would also dis-
courage cooperation. If water were extreme-
ly scant, the parties would have very little
to divide amongst themselves, nor could
they share any of the benefits that could be
thereby derived” (Dinar, 2009, p. 119).
Perhaps our term, the “Goldilocks Zone
of Cooperation,” in terms of water scar-
city represents a unique period in human
history and global civilization evolution
when practical considerations, that may be
representative of constructivist thought, will
allow the transformation of society into a
truly global civilization capable of finding
solutions to the most pressing of global
issues before it is too late and a perpetual
Hobbesian state of war ensues. The water
situations and interdependencies on the
Tigris and Euphrates Rivers in Turkey, Syria,
and Iraq (Dinar, 2009); along with the endur-
ing Indus Water Treaty (IWT) between India
and Pakistan that persists despite serious
disputes over territory in Kashmir strongly
illustrate this idea (Sahni, 2006).
That India and Pakistan continue to honor
and abide by the IWT is impressive, but
perhaps it pales in comparison to water
cooperation in the Middle East. Contrary to
realist theory that would predict water wars,
water cooperation in the Middle East is the
norm. Allan explains that the “Middle East
is the most water-challenged region in the
world, with little freshwater and negligible
soil water. Water is therefore a key strategic
natural resource, and realist theory, as well
12. 2322 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
ive groundwater pumping for their respec-
tive soda bottling operations.
If virtual water supplies dry up in the Middle
East, for whatever reasons, what happens
then? Currently Israel is pursuing advanced
desalination technology to guarantee its
supply of freshwater, yet capacities of
desalination plants are inadequate to meet
national need (Dinar, 2009). Yet the aug-
mentation to the Israeli water supply will
certainly prolong the window of cooperation
and perhaps greater technological innova-
tion, as Malthus noted (Viotti and Kauppi,
2009), will postpone the inevitable war over
water that the realists are predicting.
However, all roads do not lead to war, and
perhaps the liberal institutionalist perspec-
tive will win the day. As Solomon articu-
lates: “while the risk of water war in this
thirstiest and most politically combustible
of regions is high, it is by no means inevi-
table. The existential threat posed by water
scarcity is so palpable that it generates
opposing cooperative instincts for mutual
survival as well. At the worst moments
of the second Palestinian intifada, while
Israel’s hegemony over West Bank water was
being vehemently decried by angry stone
throwers, Palestinian and Israeli officials
continued to meet quietly and agreed not
to damage each other’s waterworks. As a
religion of the desert, Islam accords water a
special esteem that also favors cooperation.
All inhabitants in the starkly arid land share
an intuitive appreciation of the Turkish
Proverb: ‘When one man drinks while an-
other can only watch, doomsday follows.’ In
what might be considered a corollary of the
mutually assured destruction doctrine that
helped avert direct military conflict in the
postwar nuclear age, it is possible that with
rare statesmanship and sufficient despera-
tion, a Middle Eastern water famine might
lead inexorably not to devastating warfare
but to a cooperative model of water détente
that helps forge regional peace. It would
be ironic, but not impossible, if salvation
from the worsening regional water crisis
came about through a resurrection of the
faded dream of a marriage between state
of the art Israeli agricultural know-how and
Arab oil investment” (Solomon, 2010, p. 412).
While water scarcity issues are certain to
intensify, the jury is still out regarding which
of the differing philosophical perspectives
has the best insight into ultimate outcomes.
But certainly as long as cooperation over
water resources prevails and the Goldi-
locks window remains open, international
government and business efforts to address
the water scarcity issue provide possible
pathways to the evolution of a global civil
society. Two such pathways stem from ad-
dressing environmental issues, especially
those concerning environmental refugees;
and the emerging understanding and recog-
nition of a human right to water.
The first pathway, spurred mostly from
increasing water scarcity, desertification,
deforestation and climate change concerns
the rapidly increasing number of climate
refugees. “Drought and water scarcity is the
third main climate change impact that may
significantly contribute to climate-related
migration. A temperature increase of 2–3
degrees centigrade could cause around
800 million-1.8 billion people to suffer from
water shortage, assuming low population
growth. In the worst-case scenario, the
additional number of people experienc-
ing hunger due to climate change could be
around 200 million by the 2050s. Moreover,
the supply of fresh water will decrease due
to glacier retreat. More than one-sixth of the
world population currently depends on
water supplied by glacier melt, which will
further decline in the next decades” (Bier-
man and Boas, 2010, p. 69). While these
statistics are at once both overwhelming
and alarming, Bierman and Boas go on to
argue that
as popular intuition, has it that the scarcity
of water in the region will lead to water
wars. Despite growing water demand, the
Middle East has shown no signs of a water
war since some minor military events in the
northern Jordan Valley in the early 1960s.
On the contrary, there is much evidence of
cooperation over scarce water resources in
the region, especially in the Jordan River
Basin, where freshwater is scarcest” (Allan,
2002, pp. 255-256).
This state of cooperation in the Middle
East, however, is likely to be affected by
increasing water scarcity elsewhere in
the world. Currently, Israel, Jordan, Syria,
Lebanon and Palestinians in Gaza and the
West Bank have compensated for their lack
of water resources by importing “virtual
water” through the world grain market.
Rather than growing their own grain, which
is an extremely water intensive agricultural
activity, the Middle Eastern nations simply
import it, and by doing so, obviate their
need to supply their own water—which, of
course, they don’t have. Not needing huge
supplies of water to grow grain and other
food commodities allows cooperation over
the resources of the Jordan River and the
aquifers in the Golan Heights and southern
Lebanon, the West Bank and the coastal
plain (Allan, 2002).Cooperation over Middle
Eastern water resources will become more
and more important, however, as impacts
on the grain market due to climate change
and growing population ensues. “China and
India, together with America, produce half
the world’s grain—their combined influence
on international food markets is like that of
OPEC on oil. The looming prospect of India
and China becoming major grain importers
therefore threatens to dramatically push up
global food prices, crowd out the poorest
and most water-famished nations, and help
trigger humanitarian tragedies and politi-
cal upheavals around the world” (Solomon,
2010, p. 418). Therefore, increasing popula-
tion in India and China represent the big-
gest threat to water security and coopera-
tion in the Middle East, but it’s certainly not
the only threat.
As already explained, the Saudi aquifer
which supports the wheat crop in Saudi
Arabia is seventy percent depleted; and with
changing climate patterns that are predicted
to affect the grain belts of North America, it
is unclear how long the Ogallala Aquifer will
be able to sustain Midwestern grain produc-
tion. Farms are already being abandoned
because of depleted wells (Parker, 2016).
Even more critically, “India relies on ground-
water mining for more than half its irrigation
water. No other nation in the world pumps
nearly as great a volume of groundwater. By
some estimates, water is being mined twice
as fast as natural recharge. Food produced
from depleting groundwater is tantamount
to an unsustainable food bubble—it will
burst when the waters tap out. One warning
occurred in 2006 when, for the first time in
many years, India was forced to import large
quantities of wheat for its grain stockpile.
As the water tables hit bottom, clashes were
breaking out between food producers and
industrial and domestic users. In 2003,
both Coca-Cola and Pepsi bottling plants in
southern India were scapegoated and had
their licenses revoked on unproven accu-
sations that they were responsible for the
region’s exhausted groundwater reserves”
(Solomon, 2010, pp. 423-424) from excess-
“The Indus Waters Treaty set a
precedent of cooperation between
India and Pakistan that has survived
three wars and other hostilities
between the two nations... As Stephen
P. Cohen has observed, ‘The Indus
Waters Treaty is a model for future
regional cooperation, especially on
energy, environmental concerns, and
even the management of the region’s
imimpressive water resources’”
(Sahni, 2006, p. 154).
13. 2524 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
In the past, United States promulgation
of human rights has been seen by other
nations as sovereign intrusion (Viotti and
Kauppi, 2009). The “lack of intellectual
agreement among social-contract theorists,
utilitarians, Kantians, and others who think
about values in universal terms is part of
the global confusion on such matters. This
lack of consensus on human rights—how
we are to understand rights and values and
what we are to do about them—underlies
the global debate on what commitments
and obligations we have to fellow human
beings throughout the world. Disagreement
on what and whose human rights ought to
be recognized hinders the construction of a
just world society” (Viotti and Kauppi, 2009,
p. 441). The emergent right to water in con-
junction with other international declara-
tions on the rights of women and children,
the emergence of new networks of activists
and NGOs dedicated to the establishment
of these rights, such as the water justice
movement’s demand for change in inter-
national law to eliminate the commodifica-
tion of water and instead universally assign
governments to hold water in the public
trust (Barlow, 2007) and Kaldor’s assessment
that humanitarian concerns are taking pre-
cedence over sovereign issues may indicate
those barriers to the construction of a just
world society are evaporating.
One final key in determining which path
the world will follow in dealing with water
scarcity is the role played by multinational
corporations (MNCs). While scapegoated in
India, the role of MNCs in the commodifica-
tion of water is a serious issue with many
advantages and disadvantages. In addition
to the aforementioned groundwater deple-
tion issue which exacerbates global water
scarcity impacts, one of the major advan-
tages of MNCs in the water business has
been in the increase of water productivity
and conservation. “While cities are learning
to use their existing water more efficiently,
industry has been the largest single contrib-
utor to the unprecedented surge in water
productivity. Across the industrial spec-
trum, water is a major input in production.
Alone, five giant global food and beverage
corporations—Nestle, Danone, Unilever,
Anheuser-Busch, and Coca-Cola—consume
enough water to meet the daily domes-
tic needs of every person on the planet….
American companies began to treat water as
an economic good with both a market price
for acquisition and a cost of cleanup before
discharge in response to federal pollution
control legislation in the 1970s. With char-
acteristic business responsiveness wherever
operating rules were clear and predictable,
they sought ways to do more with the water
they had and to innovate in their industrial
processes so that they needed to use less
overall. The results were startlingly instruc-
tive of the enormous, untapped productive
potential in conservation” (Solomon, 2010,
p. 469).
Unfortunately MNC’s may not have yet
figured out that they need to be part of
the global solution by initiating impor-
tant conversations and accepting leader-
ship roles in water conservation. “A set of
cables released last month describes a 2009
visit between U.S. government officials and
Nestlé executives at the company’s global
headquarters in Vevey, Switzerland. It con-
firms what was already largely confirmed by
science, government and business leaders:
the global economy is on a collision course
with water scarcity. Nestlé’s frank discus-
sion about the world’s ongoing water crisis
several years ago hardly portrays the com-
pany as a model corporate citizen. Nestlé
has long engendered its fair share of con-
troversy, from its role in the baby formula
scandal in Africa in the 1970s to its American
“dealing with the resettlement of millions
of climate refugees over the course of the
century will require not only a new legal
regime, but also one or several international
agencies to deal with this task.” Addition-
ally, they note that these issues are already
being addressed from a security standpoint
by military and defense planners. In truth,
in terms of any nation’s national security,
it is in the best interests of all to plan for
waves of climate refugees to mitigate the
impact of potentially hundreds of millions
of human beings moving across the planet
in mass migrations.
Therefore, “In light of the most recent
scientific findings, which indicate possibly
accelerating climatic change, there is an
urgent need for a new academic research
program on what we propose to call ‘global
adaptation governance.’ Global adaptation
governance will affect most areas of world
politics, including many core institutions
and organizations of current global gover-
nance. The need to adapt to climate change
will influence, for example, the structure of
global food regimes and the work of the UN
Food and Agriculture Organization (FAO);
global health governance and the agenda
of the World Health Organization (WHO);
global trade in goods whose production will
be harmed or helped by climate change; the
world economic system and the ability of
the International Monetary Fund to address
climate-related shocks to national and
regional economies; and many other sec-
tors from tourism to transportation or even
international security” (Bierman and Boas,
2010, pp. 60-61).
While Bierman and Boas do not suggest the
formation of a world government, whether
it be in the form of a federation of existing
nation states or some other organizational
structure, certainly by calling for research
into how to govern issues from a global
perspective, specifically the issue of climate
refugees, suggests a transformation to a
true global civil society. And so does the
emergent human right to water, which can
be construed as a basic right: “Gleick’s
interpretation leads to a construal within
later international documents of a spe-
cific right to water that seems to qualify as
what Henry Shue terms a ‘basic right.’ The
Convention on the Elimination of All Forms
of Discrimination Against Women (CEDAW)
and the Convention on the Rights of the
Child (CRC) both explicitly name the human
right to water, the first as part of the right
to development and the latter as part of a
general right to health. In Shue’s well known
formulation, basic rights guarantee things
‘essential to a normal . . . life’ and are es-
sential to protect ‘against a standard threat
to rights generally. This is precisely why
basic rights are basic. That to which they
are rights is needed for the fulfillment of all
other rights’” (Hiskes, 2010, p. 330).
Recognition and institution of global
adaptation governance programs in concert
with the recognition of the emerging human
right to water would certainly add to the
gains that are being made in regional state
cooperation over the management of
dwindling water resources. Another piece in
the puzzle is the emergence of transnational
networks of activists creating what Kaldor
calls an emerging humanitarian regime.
“During the 1990s, a new phenomenon of
great importance was the emergence of
transnational networks of activists who
came together on particular issues: land-
mines, human rights, climate change, dams,
AIDS/HIV, and corporate responsibility. I
believe they had a significant impact on
strengthening
processes of
global gover-
nance, espe-
cially in the
humanitarian
field. Notions of
humanitarian norms that override sover-
eignty, the establishment of the Interna-
tional Criminal Court, the strengthening of
human rights awareness—all these factors
were very important in the construction of a
new set of multilateral rules: what we might
call a humanitarian regime…a new respon-
siveness to global civil society offers the
possibility of a system of global institutions
which act on the basis of deliberation,
rather than, as in the past, on the basis of
consent for American hegemony” (Kaldor,
2003, p. 588).
If the world’s
militaries con-
sider Climate
Change impacts
a threat to na-
tional and inter-
national security,
why are business-
es not acting ur-
gently to embed
sustainability?
“The global economy
is on a collision course
with water scarcity”
(Kaye, 2016).
14. 2726 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
operations’ dubious agreements to source
groundwater for its lucrative bottled water
brands. The company, to blunt such criti-
cism, will point to progress it has made on
the sustainability front, from its cage-free
egg-sourcing commitments to improve-
ments in animal welfare. And some of
those commitments could be traced to this
particular report released by WikiLeaks. But
what reads at first as a long-term economic
analysis during the 2008-2009 global finan-
cial crisis morphs into a gloomy assessment
of the water economy: ‘A calorie of meat
requires 10 times as much water to produce
as a calorie of food crops,’ a Nestlé analyst
suggested, ‘As the world’s growing middle
classes eat more meat, the earth’s water
resources will be dangerously squeezed.’
The report then continues to give a damning
assessment of the American diet. Claiming
that the average U.S. daily consumption of
3,600 calories per person is largely derived
from meat products, Herbert Oberhaensli,
Nestlé’s then-vice president of economics
and international relations said global water
supplies would be “exhausted” if the world’s
population reached 6 billion people — a
number reached in 2000. Many of these
threats related to water depletion, Ober-
haensli went on, stem from subsidies that
allow for the growing of crops in arid re-
gions like California and the “mis-pricing” of
water. But the gargantuan American diet was
not solely to blame. The push to develop
biofuels, then a central part of the European
Union’s drive to shift toward clean-energy
technologies, also contributed to the world’s
growing water shortages. Nestlé estimated
that 1,000 liters (264 gallons) of water were
needed to produce 1.5 liters (0.4 gallons) of
ethanol. As a result of the growing middle
class’s demands for more meat, Oberhaensli
believed the world would confront a 30 per-
cent shortfall of grain production by 2025.
The company, therefore, suggested a four-
pronged approach toward combatting this
emerging water crisis: a virtual market of
water that would allow for this precious re-
source to be sold across borders; the elimi-
nation of subsides for biofuels; the accep-
tance of genetically modified crops (GMOs)
into the global food industry’s supply chain;
and the liberalization of agricultural trade.
With that, Nestlé execs told U.S. government
officials that the company wanted to ‘play
a useful public role in the global debate
on the environment.’ But there was one
caveat: ‘The company management be-
lieves that the current under-pricing of that
scarce commodity (water) will lead to huge
problems. It fears that subsidies for biofuels
will potentially push the price of food out of
reach for the poor in some developing na-
tions. It is strongly opposed to water price
subsidies and a strong proponent of market
practices. However, the firm scrupulously
avoids confrontation and polemics, prefer-
ring to influence its audience discretely by
example.’
Whether Nestlé leads by example is open
to debate. While the company does procure
some meat for its portfolio of brands, which
includes Hot Pockets, Stouffer’s, Gerber,
Maggi and, of course, its pet food products,
Nestlé does not directly purchase livestock
from suppliers — most of the meat it buys is
already processed. It is easy for the com-
pany to express dismay about the potential
impact of the global meat industry when
such food is not the core of its business.
And as for overall water consumption, the
company is rather vague when it comes to
what, in corporate-speak, is often called
“water stewardship” policies. It is not fair
to single out Nestlé, or ravenous Americans,
for the world’s emerging water crisis. Many
of the issues are structural, such as out-
dated laws on water allotments in places
like California, or the fact that water is still
underpriced. And to Nestlé’s point, most of
the world’s water goes toward farming, not
industry or residential use.
But what this leaked WikiLeaks document
reveals is that Nestlé had the opportu-
nity to get ahead of the curve and start a
global conversation on water consumption.
Instead, the company confused “non-
confrontation” with leadership” (Kaye, 2016,
paras 1-13).
Perhaps realist, liberal institutionalist, and
constructivist theories are about to be
replaced by economic structuralist views. In
his review of Robert Glennon’s Water Follies,
Steinberg explains that “our nation’s demo-
cratic system is on life support, that
the Constitution and the liberties it ensures
remain in operation, but in terms of the
people’s ability to participate in impor-
tant governmental and political decisions
regarding social and environmental issues,
democracy in America is, if not exactly dead,
then in a severely compromised state. This
state of affairs is mainly the result of the
increasing power and influence of multi-
national corporations” (Steinberg, 2004, p.
620).
While MNCs increasingly operate out-
side political boundaries and exploit the
resources and employment bases of the
countries they operate in, MNCs are also
hastening the depletion of the groundwater
supply, and thus threatening all the abilities
of all nations to maintain or increase agri-
cultural capabilities and supply worldwide
populations with accessible potable water.
As bad as this sounds, it also presents the
intriguing possibility of an emerging global
economic structuralist regime in which
MNCs become the new world government.
Already operating alongside of or outside of
or independent of official state governments
in many ways—and certainly outside of
democratic electoral structures in the Unit-
ed States especially since Citizens United
exponentially expanded corporate political
influence— MNCs are in a unique posi-
tion to take on global leadership or even
governmental roles. If five major food and
beverage companies consume enough water
to meet the demand of every human being
on the planet, the prospect that they could
supply water to the world through their dis-
tribution capabilities and provide water to
the 1.1 billion that lack access to safe water
and the 2.6 billion without basic sanitation
(Spoth, 2009), is worthy of consideration.
Certainly a government of the “Coca-Cola
Nation” could be formed with the consent
of the 1.1 billion human recipients at the
end of the Dasani pipeline. In terms of the
“global adaptation governance” of Bierman
and Boas, MNCs are uniquely positioned to
play an effective role since they alone really
participate in and interact with a complex
array of world governments on a daily basis.
And what better entity exists to deal with
global food and water supply issues than
a global food and beverage company? The
question that begs to be asked, however, is
could an MNC transform itself into an effec-
tive governmental entity that would protect
the interests of its citizenry—its customers—
over that of its shareholders? Therein lies
intriguing possibilities and possibly creative
emergent sustainable strategies. However,
MNC corporate cultures would need to be
transformed across the board, incorporating
strategic sustainability priorities into core
strategies and even corporate mission state-
ments. The recognition of their collective
obligation to society has to occur. Obliga-
tions to shareholders must be balanced
with obligations to humanity and to future
generations, and the planet.
Obligations to
shareholders must
be balanced with
obligations to hu-
manity and to future
generations, and
the planet.
15. 2928 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
Business
& the Obligation to
Future Generations
Section II
16. “MAINSTREAM CUSTOMERS ACROSS AN ARRAY OF MARKETS AND GEO-
GRAPHIC AREAS ARE INCREASINGLY EXPECTING SOCIAL AND ENVIRONMEN-
TAL PERFORMANCE FROM THE BRANDS, COMPANIES, AND PRODUCTS THEY
CHOOSE. MORE IMPORTANTLY, THEY WANT IT WITHOUT ANY GREEN OR
SOCIAL PREMIUM. MAINSTREAM CONSUMERS WANT PRODUCTS THAT ARE
MORE AFFORDABLE, BETTER-PERFORMING, HEALTHIER, LONGER-LASTING,
WITH ADDED APPEAL—IN OTHER WORDS, IT IS‘SMARTER’RATHER THAN
GREENER OR MORE RESPONSIBLE THAT THEY ARE AFTER”(LASZLOW AND
ZHEXEMBAYEVA, 2011, P. 15).
The ethical implications of increasing water scarcity were briefly discussed
in the previous section, especially as they pertain to the emerging rec-
ognition of a human right to water. One major dispute over the issue is
concerned with where the obligation to future generations originates. Is
the obligation a moral one (D’Amato, 1990) or a legal human right? And if
a legal human right, should the rights be viewed in terms of generational
rights rather than individual rights (Weis, 1990)? Further, some contend
that framing the issue in terms of rights is a distraction and that the focus
of the debate should be on the concrete and practical nature of the obliga-
tion that combines both a moral duty and the duty of law (Gundling, 1990).
But to the extent that many issues in ethics involve politics (Mosser, 2010),
especially environmental ones, a legal framework is necessary if an obli-
gation of any kind to future generations is to be identified, agreed upon,
and enforced by international law. However, the question remains as to
how to construct the framework. We would argue that the international
recognition of emergent environmental rights can provide that framework
and establish the obligation to preserve the environmental health of the
planet for future generations.
In terms of morality, an obligation to future generations is very difficult
to justify because moral philosophy provides inconsistent guidance as
“any moral principle can be construed to justify moral or immoral action”
(D’Amato, 1990, p. 197). This is illustrated in utilitarianism, deontology, virtue
ethics, ethical egoism and moral relativism (Mosser, 2010). In utilitarianism,
it would seem that if human beings are concerned with calculations based
on the principle of the greatest good for the greatest number of people
on Earth right now they would be concerned with their own survival and
improving their own situation through resource exploitation. Those living
in poverty in China, India, Africa and the developing world have immediate
needs that resource exploitation can improve, while any obligation to a
future generation would seem abstract and not immediate at best, even if
every person on the planet was concerned with the survival of the species.
If this regard, concerns of obligation would not be a concern to the majority
Business & the Obligation to
Future Generations
Section II
of the world’s deontologists if the act of
resource exploitation resulted in improved
living conditions for those living in squa-
lor, how could resource exploitation be
wrong? If the will of those taking action is
to improve living conditions for all human
inhabitants currently alive on earth then
potentially negative consequences for fu-
ture generations do not matter to a deon-
tologist. Similarly, a virtuous person may be
inclined to do everything possible to relieve
hunger and starvation of human beings cur-
rently living in extreme poverty. Even if this
means clearing all the land in the Amazon
Rainforest to graze enough cattle to feed
the planet such an action would be accept-
able under virtue ethics if the people doing
the clearing were virtuous and had noble
goals. This will be true, however, only until
the tipping point is reached and the people
currently living are immediately threatened
with death by environmental destruction. An
ethical egoist may or may not be concerned
with any obligation to a future generation.
However if an ethical egoist thought that
leaving the earth in a better or worse shape
for his or her children was okay to satisfy
his or her own needs, then ethical egoism
along with moral relativism, which would ar-
gue that if a society thought that it was right
to exploit the planet now and worry about
it later, would not be of much assistance in
determining an appropriate outcome.
Because moral philosophy fails to ad-
equately guide us in considering obligations
to future generations, it is necessary to look
at a framework of human rights. But before
this discussion can begin, it is necessary to
note that any framework that deals with an
obligation to future human generations is
species chauvinistic and does not consider
a larger global picture (D’Amato, 1990).
Further, a complex philosophical argument,
Parfit’s Paradox, demonstrates that there is
no moral obligation to future generations
because an obligation assumes a respon-
sibility to specific individuals that do not
exist. The argument, utilizing chaos theory,
explains that just as the flapping of a but-
terfly’s wings over North America may result
in a hurricane bearing down on Australia,
any action that is taken today to protect
or restore the world’s environment for the
benefit of future individuals would change
the conditions for any individual at the
time of conception just enough that when
compounded over time, these actions would
actually cause the future individuals that
would be conceived not to be conceived
and allow others to be conceived in their
stead. Therefore, it is impossible to owe
specific future individuals any obligation
whatsoever because acting in their interests
results in their non-existence (D’Amato,
1990). Perhaps, but it can be equally argued
that people are required to make the best
decision possible, realizing that there will
be a set of individuals that exist in the
future, even if that set of specific individuals
is undefined. Accepting Parfit’s Paradox and
following it to its logical conclusion, there
would be no basis for making any decisions
based on ethics because we can never know
a specific outcome for certain.
However, Parfit’s Paradox only deconstructs
the idea of an obligation to future genera-
tions and not environmental obligations
in general. This is why Weis (1990) argues
that in determining an obligation to protect,
preserve and restore the environment for
future generations, one has to look at the
responsibility to the generation itself and
not to specific individuals (Weis, 1990). Still,
using human rights to justify an obligation
to future generations is problematic as well
because rights legally accrue benefits to in-
dividuals (Gundling, 1990), and not to groups
of people.
What is Moral?
What is Ethical?
How can an
International Standard
be Recognized and
Agreed Upon?
Moral Philosophies
Fail in Providing
Guidance for Busi-
ness Decisions.
Therefore a Frame-
work of Human
Rights is Required.
3130 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
17. To help those in China, India, Africa and
other Third World nations rise from their
condition, it would be necessary to help
them exploit their own resources to the full-
est extent possible to increase their wealth,
overcome their second class status, and join
the rest of the modern developed world.
Such an effort to help our own generation
in this manner would have serious environ-
mental consequences and jeopardize our
ability to pass on a world to the next gen-
eration in a condition at least comparable
to the world we inherited from the previous
generation (Weis, 1990). Interestingly, if the
modern world decided to act in this way for
the benefit of the inhabitants of the Third
World nations, none of the moral philoso-
phies already discussed would take issue
with this action, even if this action would
seriously impact the world’s environment
in a negative way and depleted most of its
resources and caused widespread species
extinction.
Therefore, Gundling (1990) suggests that a
legal framework in the form of an interna-
tional treaty is necessary to establish the
basic principles for acting in the interest of
future generations. Unfortunately, he also
suggests the most difficult task of significant
reform or change to the global economic
structure. “The objective of true preven-
tive environmental protection will only be
achieved if we change, fundamentally and
on a global level, our way of running the
economy. This, in turn, will be achieved only
if we change our basic system of values.
Economic growth is not per se an indica-
tor of progress, nor is wealth necessarily
an indicator of prosperity” (Gundling, 1990,
p. 211). Perhaps because no individual or
organization can tackle the issue of reform-
ing the global economy, Gundling concludes
with an assignment of the responsibility to
the state, and thus absolving individuals of
the need to take action. “Responsibility to
future generations should entail not only
moral duties but also duties of law. The
threat to future generations is too seri-
ous and the task of warding off this threat
too complex, to be left to the informal and
often uncertain domain of morals. Laws
should provide for the fundamental duty to
preserve the environment for the benefit
of future generations, and it should also
provide the basic principles that states must
observe in fulfilling this duty. The funda-
mental duty and basic principles should
be part of both national and international
law; without doubt, the responsibility to
future generations is the common task of all
states” (Gundling, 1990, p. 212).
But if the responsibility to future gen-
erations is the common task of all states,
whose responsibility is it to initiate action?
In the past, United States promulgation
of human rights has been seen by other
nations as sovereign intrusion (Viotti and
Kauppi, 2009). And the “lack of intellectual
agreement among social-contract theorists,
utilitarians, Kantians, and others who think
about values in universal terms is part of
the global confusion on such matters. This
lack of consensus on human rights—how
we are to understand rights and values and
what we are to do about them—underlies
the global debate on what commitments
and obligations we have to fellow human
beings throughout the world. Disagreement
on what and whose human rights ought to
be recognized hinders the construction of a
just world society” (Viotti and Kauppi, 2009,
p. 441).
The emergent right to water in conjunction
with other international declarations on the
rights of women and children, the emer-
gence of new networks of activists and NGOs
dedicated to the establishment of these
rights, such as the water justice movement’s
demand for change in international law to
eliminate the commodification of water and
instead universally assign governments to
hold water in the public trust (Barlow, 2007)
and Kaldor’s assessment that humanitar-
ian concerns are taking precedence over
sovereign issues (Kaldor, 2003) may indicate
those barriers to the construction of a just
world society are evaporating. But while the
nations of the world grapple with construct-
ing a just world society for the current gen-
eration in our own time, the obligation to
future generations remains clouded at best.
While Gundling assigns responsibility of the
question of environmental obligations to
future generations to the world’s nations, he
also illustrates the need for interaction be-
tween the disciplines of philosophy, science,
sociology, economics and political science.
Philosophical discourse cannot answer
this question alone. But philosophy does
identify the central dispute to be settled so
that the legal framework for establishing an
environmental obligation to future genera-
tions can be constructed. We believe all the
pieces exist and that they just need to be
assembled. To us, it is clear that there are
many obligations owed to the current gen-
eration of humans living on the planet. It is
also clear that there are a number of emer-
gent rights that should be considered as ba-
sic human rights—among them are a right to
water and a number of environmental rights
that are conditions for basic existence and
survival of individuals—not just for humans,
but for all life on the planet. This is why we
find the argument that fulfilling obligations
to future generations fulfills obligations to
the current generation to be the most com-
pelling (Hiskes, 2005).
While “arguments for justice across genera-
tions have been difficult to maintain ever
since David Hume ridiculed the idea of the
social contract for presuming that the recip-
rocal ‘conditions of justice’ could be met in
a relationship between one living genera-
tion and another that did not yet exist”
(Hiskes, 2005, p. 1347), David Hume did not
live in a world of widespread environmen-
tal destruction, massive deforestation and
accelerating species extinction that threat-
ens the existence of the web of life on this
planet that every living thing depends upon
for survival. These effects are “emergent ef-
fects” (Hiskes, 2005, p. 1355) of man’s actions
that are resulting in the emergence of the
3332 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
Many societies
believe obliga-
tions are to the
group and not
the individual),
and as Weis
notes, “rights
are always con-
nected to obli-
gations” (Weis,
1990). Equally
important as
intergenerational
rights are inter-
generational rights.
As the developing
world is living in
great poverty,
before we can
address the ob-
ligation to future
generations it
would be neces-
sary to address
the needs of our
own generation
living in poverty.
18. tant—and considering that life has existed
for approximately three billion years and
that this condition probably establishes
the importance that life should continue to
exist to some degree of reasonability— then
we believe an obligation exists to pass on
the planet in at least its current life-sus-
taining condition to future generations.
Additionally, Rawls’ theory of justice, if ap-
plied in an intergenerational manner, would
also support an environmental obligation
to future generations. Under the veil of
ignorance, a society would be constructed
fairly for all if those doing the construct-
ing had no knowledge of whether they be
in a majority and favored or in a minority
and were discriminated against (Mosser,
2010). If this concept is applied intergen-
erationally, and one could choose at what
time to exist—in a world where pollution
was minimal, the air and water were clean,
the land was not despoiled and there was
unlimited water and other resources or a
world with widespread environmental deg-
radation with polluted air, scarce water and
poor soils that did not support agriculture
and increasing resource scarcity, we believe
most would choose to live in a time where
the world’s environment was not degraded
and resources were plentiful. We believe
this strengthens the argument for at least
an environmental obligation to future gen-
erations and further helps explain why such
an obligation to future generations not only
exists, but also why it is superior to argu-
ments to the contrary.
Chief Seattle was correct: whatever man
does to the web of life on the earth he does
to himself. Taking care of the earth is there-
fore in man’s self-interest, not only for the
current generation, but so that future gen-
erations can also survive and flourish. Our
collective self-interest, then, is where the
obligation to future generations originates.
If we care for our children and our grand-
children and great-grandchildren out of our
personal needs to perpetuate ourselves,
and if we are at least a little bit concerned
that a society continues for our personal
descendants to live in and to be a part of,
then we have an obligation to ensure that
the planet’s environment is healthy enough
to allow for our descendants’ survival and
to support the society they will live in. Such
an obligation is reciprocal in that by taking
action to protect the environment for our
descendants we preserve it for ourselves.
Therefore the international recognition of
emergent environmental rights can provide
the legal framework for intergenerational
justice and to establish the obligation to
preserve the environmental health of the
planet for future generations.
new class of environmental rights that are
distinct from traditional human rights that
have been widely examined and considered
by philosophy and governments. Therefore,
while it has been impossible to owe an ob-
ligation to a specific individual in the past,
in terms of the environment and the health
of the planet, a new reciprocal relationship
between generations is being understood
(Hiskes, 2005). Hiske explains:
“In brief, the unique relationship with the
future invoked by emergent environmental
rights makes it necessary to ascribe rights
to future generations as well. As Donnelly
notes, all claims of rights are future-orient-
ed to some extent, since ‘their principal aim
is to challenge or change existing institu-
tions, practices, or norms, especially legal
institutions.’ Similarly, all declarations
of rights presume that individuals in the
future are guaranteed them as well. But
environmental rights go further in seeking
to guarantee through their operation that
the environment will be preserved for the
future; therefore they make it possible in
practice for future generations also to pos-
sess the same rights—in fact, the guarantee
is a presumption of such rights’ existence.
Therefore, although it would be too much
to say that emergent environmental rights
guarantee or logically presume that fu-
ture generations also have such rights, in
a pragmatic sense it is clear that the point
of environmental rights is precisely such
a guarantee. Furthermore, arguing for
the rights of future generations to a safe
environment necessarily also strengthens
the same rights for the living, because the
health of the environment inherited by our
successors depends upon actions taken by
the living respecting the same rights that
they hold. That is, defending the rights of
the future makes the case for present rights
even stronger by necessitating that ac-
tion be taken now to enhance those rights;
such action will also obviously enhance the
environmental rights of present generations
as well. Interestingly then, emergent envi-
ronmental rights offer at least a pragmatic
solution to the dilemma of noncompossibil-
ity of the rights of future generations. That
is, environmental rights might offer a new
approach to the entire issue of intergenera-
tional justice by reconfiguring the nature of
reciprocity between generations. Arguing
for the rights of future generations to a safe
environment in return makes the argument
for one’s right to the same thing even stron-
ger” (Hiskes, 2005, p. 1355).
Hiskes’ position, like all positions, is not
without detractors, however. Weston (2012)
addresses the fallacy of the self-interest
argument for reciprocity as made by Hiske
(2005): “nevertheless, to be convincing, pro-
ponents of intergenerational ecological jus-
tice must ground their argument on a theory
of human rights that avoids fundamental
controversy; and to this end is ventured
the idea of necessity driven by enlightened
self-interest. A just society, whether operat-
ing across space or time or both, requires
rights as a matter of necessity to guarantee
its possibility. And to ensure its probabil-
ity, it must be defined by values freely and
equally chosen by its members in rational
contemplation of the self-interest—their
self-interest—that inheres in mutually toler-
ant and reciprocally forbearing attitudes
and behaviors” (Weston, 2012, p. 263).
We would have to agree with Weston that
taking action to protect the environment
for ourselves and for our successors is in
the self-interest of the current generation
and future generations. However, we would
also have to ask Weston: “What is wrong
with self-interest?” Every living thing on
planet Earth acts in its own self-interest to
survive and to improve its living conditions.
Plants extend roots to find richer sources
of food and water. Animals migrate to find
richer pastures and better conditions to
raise their offspring. Humans take jobs or
obtain education to improve opportunities
for themselves and their families. Whether
conscious or unconscious, self-interest has
driven evolution and behavior since the
dawn of life on Earth. Perhaps taking steps
to restore the health of the world’s ecosys-
tem and to slow species extinction is in the
self-interest of the current generation and
the future generation, but in this case such
self-interest is in terms of the fundamental
survival of life on Earth. If survival of hu-
man beings, or for that matter, the survival
of any species of life on the planet is impor-
3534 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
20. “AS NATURE, AS A WHOLE, IS MORE POWERFUL
THAN HUMAN SOCIETY, IT MAKES EMINENT
SENSE FOR COMPANIES, AND INDIVIDUALS, TO
LEARN HOW THEY CAN WORK WITH NATURE
RATHER THAN AGAINST IT, IF THEY WISH TO
BENEFIT LONG TERM”(BORLAND, 2009, P. 560).
The key ethical issues of our time all stem
from our obligations to future genera-
tions, and are all environmental in nature:
climate change, water scarcity, resource
depletion, deforestation, population growth,
food scarcity and species extinction. All are
interrelated complex issues that threaten
the web of life referred to by Chief Seattle.
How we utilize our resources and how
businesses exploit them for profit or adopt
sustainable strategies and processes that
will ensure their renewability is critical to
maintaining the standard of living that has
been achieved by the Western world and the
hopes of developing countries to improve
their standard of living. Global efforts to
achieve sustainable use of the world’s re-
sources is critical if we are to fulfill any type
of obligation to the future generations that
come after us. Water scarcity is especially
troubling since nearly a third of the world’s
seven billion people do not have access to
enough water to meet their daily needs for
drinking, hygiene or public sanitation (Solo-
mon, 2010; Barlow, 2007; Kaldor, 2003).
Water scarcity requires nothing less than
a comprehensive reevaluation of water’s
vital importance as the new oil—a pre-
cious resource that has to be consciously
conserved, efficiently used, and properly
accounted for on the balance sheets across
the breadth of human activity, great and
mundane: from public health, food and en-
ergy production to national security, foreign
policy and the environmental sustainability
of human civilization (Solomon, 2010, p.
383).
Ethical environmental issues persist be-
cause the effects of global environmental
issues are extremely hard to detect as they
slowly manifest themselves (D’Amato, 1990).
Additionally, because of the tragedy of the
commons in which no contributor to global
environmental issues views their own small
scale activity as significant in the context of
the enormity of the whole, it is difficult to
pinpoint and prove causation. Therefore,
causation is still debated as harmful effects
accrue and no action is taken to address
environmental issues (Shaw, 2014). It is be-
cause of these two issues that environmen-
tal problems remain externalities instead of
being subject to market factors and acted
upon in substantial ways by the world’s
corporations instead of being shuffled
under a corporate social responsibility (CSR)
umbrella (Borland, 2009).
Adam Smith described how the market’s
unseen “invisible hand” caused individuals’
self-interested competitive pursuit of profit
to simultaneously, as a wholesome byprod-
uct, maximize wealth creation for the entire
society. Yet the market has glaringly failed
to evolve any corresponding invisible green
hand to automatically reflect the cost of
depleting natural resources and sustaining
the total environmental health upon which
an orderly, prosperous society depends
(Solomon, 2010, p. 381).
Strategic Sustainability Planning:
A Narrative Synthesis
Section III
The stakes cannot be higher: even looking
at every area of carbon footprint impact
in an given company’s entire supply chain
is still a fragmented approach because
companies seemingly almost never take ac-
tion in other areas of sustainability beyond
taking steps to reduce greenhouse gas
emissions. Unfortunately, mitigation and
reduction of greenhouse gases is no longer
enough action, nor is it sustainable because
the time horizon for climate change impacts
is now. We have surpassed the planetary
boundary for greenhouse gas emissions that
have triggered climate change (Rockstrom et
al, 2009). Global temperatures are expected
to rise two to three degrees centigrade by
2050 even if we reduce individual carbon
footprints in every major business opera-
tion and supply chain worldwide. This is
because of increased aggregate greenhouse
gas emissions and resource depletion due
to rising population. Even if we take steps
to become fully sustainable today in every
business and logistics operation, population
increase to nine billion and the impact of
increased resource use from an increased
population will outpace carbon reduction
efforts and put enormous pressure on the
world’s capacity to sustain life, let alone its
energy and supply chain systems. How-
ever, that does not mean we should bury
our heads in the sand and do nothing. “In
the new narrative, the gloom and doom of
declining resources is also the foundation
for opportunity, an emerging paradigm of
business that can be more sustainable and
more profitable” (Laszlo and Zhexembayeva,
2011, p. 9). For example, faced with tough-
ened drinking water standards in the 1980s
that threatened the need to spend six to
eight billion dollar for filtering and water
treatment facilities, the State of New York
and New York City helped restore developed
areas around the sources of the city’s water
supplies to their natural states by planting
trees to improve the upstate forests and
soils and the land’s ability to retain water
and filter out pollutants. The result was the
cost savings from the expenditure of only
one billion dollars to enhance the natural
watershed, and a vast improvement in water
quality as well as a new partnership be-
tween city and state officials, environmen-
talists and rural community representatives
in a project fueled by cooperation of all
stakeholders (Solomon, 2010). This demon-
strates how “embedding sustainability [in
corporate strategy] creates blue oceans”
(Laszlo and Zhexembayeva, 2011, p. 114), or
new business opportunities in environmen-
tally friendly ways. CEOs must seize the
opportunities for competitive advantages
sustainable practices afford when formulat-
ing corporate strategy. Currently, all that is
needed is vision and a strong moral center
for business leaders to embed sustainability
into their corporate strategy and culture.
The need to balance fiscal and corporate
social responsibilities has been recognized
by more than 1600 companies, which rated
economics as the primary reason for such
programs (Crawford and Scaletta, 2005).
However, most of those 1600 companies are
using CSR as a marketing or public relations
tool instead of institutionalizing the prac-
tices as a core value within their respective
companies. This is because of great confu-
sion as to what CSR is, means, or entails as
there is no universally agreed upon defini-
tion or interpretation of CSR.
When considering sustainability as a core
component in strategic planning, it is im-
portant to possess a clear understanding of
the stakes involved, and an understanding
of all the factors that influence and con-
tribute to a successful implementation of
the strategy. More importantly, emergent
strategies will be necessary to cope with
the potential for major disruptive events
that are increasingly likely to occur from
the real potential for geopolitical turmoil
and climatic upheavals as described in the
first section of this white paper. To better
understand all of the interrelated aspects of
what would constitute successful sustain-
ability strategic planning, it is first necessary
to examine the key elements that factor into
effective and ineffective strategies. In doing
so a better understanding of the difficulties
corporations face in becoming sustainable
should emerge, allowing for insight into how
to move forward in meeting the substantial
challenges all businesses, and the people of
the world, now face.
3938 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
21. The single major challenge corporations face with sustainability and CSR,
or Corporate Sustainability and Social Responsibility (CSSR) is that CSSR
is such a broad category that there is no consistent understanding or
approach to strategy. This accounts for the gap between surveys where
companies and executives believe CSR or CSSR is important, yet few have
implemented comprehensive strategies addressing these issues (Searcy,
2016; Peterlin, Pearse, and Dimovski, 2015; Galpin, Whittington and Bell,
2015; Bratt, Hallstedt, Robert, Broman and Oldmark, 2015; Klettner, Clarke
and Boersma, 2014; Montiel and Delgado-Ceballos, 2014; Hahn, 2013; Kiron
et al, 2013; Soteriou and Coccossis, 2010; Borland, 2009; Pohle and Hittner,
2008). When companies talk about CSR, they tend to talk about it in terms
of philanthropy or marketing. CEOs and corporations do not yet have a clear
strategic view of CSR as a platform for growth. The lack of understanding
of what CSR entails is also why 76% of business leaders surveyed admitted
they don’t understand their customers’ CSR expectations well (Pohle and
Hittner, 2008). And how could they? If CSSR is not clearly defined and CEOs
do not understand what CSSR entails, it would follow that consumers also
have many different ideas and expectations of CSSR.
The idea of sustainable development first was articulated in the Brundtland
report from the World Commission for Environmental Development in 1987,
which stated that “businesses are said to have a crucial role in managing
impacts of population in ecosystems, ecosystem resources, food security
and sustainable economies in order to decrease the pressure society places
on the environment” (Montiel and Delgado-Ceballos, 2014, p. 113). Clearly,
such a statement leaves much for interpretation. Since the articulation
of the term “sustainable development,” Corporate Sustainability has been
conceptualized in countless ways using three different approaches: 1)
Stakeholder Theory, 2) Institutional Theory, and 3) a Resource Based View.
Additionally, new constructs such as sustaincentrism, which is a term defined
as “the process of achieving human development in an inclusive, connected,
equitable, prudent, and secure manner” (Montiel and Delgado-Ceballos,
2014, p. 126) have also arisen with questionable value as such terms only
add confusion to the umbrella concept of CSR.
Because of all of these definitions, interpretations, constructs, approaches
and variations on the themes, it shouldn’t be surprising that there is no
consistent way to measure or report CSR activities, and so companies lack
a strategic approach to CSR. To address the inconsistencies, in 2010 the
International Organization for Standardization published ISO 26000 “to
provide guidance on ways to integrate socially responsible behavior into the
organization and thereby help maximize an organization’s contribution to
sustainable development. The standard outlines content and approaches to
social responsibility and underlines that social responsibility should be an
The Problems and Challenges with
Corporate Social Responsibility
30 years after
the Brundtland
Report, we still
have a long way to
go!
integral part of core organizational strategy”
(Hahn 2013, p. 443). Certainly formal stra-
tegic planning could improve operational
efficiency and CSSR needs to be integrated
into a company’s core operations. How-
ever, ISO 26000 is still too broad to be a
useful management tool. The standard is
more concerned with symbolic value rather
than generating actual results in helping
companies follow a strategic approach to
CSSR. ISO 26000 is more useful in the stra-
tegic planning processes because it gives
corporate strategists lacking expertise in
CSR a baseline that can provide guidance in
program implementation (Hahn, 2013). But
ISO 26000 does not help companies with
their own specific planning, developing an
action plan, or promulgating CSSR activi-
ties through an entire corporate organi-
zation nor does it provide guidelines on
how to communicate CSSR strategies to all
stakeholders, including boards of directors,
shareholders and the public.
What ISO 26000 achieves is that it offers a
“starting point for analyzing the internal
and external environment of an organiza-
tion, covering the most likely impact of
an organization on all three sustainability
dimensions of economic, environmental
and social….ISO 26000 states in clause 7.4
that an organization could include CSSR in
its vision or mission statement to make it
an integral part of the company’s policies.
The standard itself, however, offers little
guidance on how to achieve this. This is not
surprising given the highly context-specific
nature of any mission and vision, which is
inevitably bound to the purpose and envi-
ronmental settings of the particular com-
pany” (Hahn, 2013, p. 447). Finally, ISO 26000
gives little guidance for companies in gener-
ating CSSR strategies. “This is not surprising
when looking at the highly context-depen-
dent nature of any CSSR strategy. However,
despite the many good practice examples of
exemplary measures and business conduct
that are included throughout ISO 26000,
the standard gives only a few examples and
concrete references to possible overarching
strategies. The only exception is environ-
mental management where ISO 26000
refers to pollution prevention, sustainable
resource use, climate change mitigation and
adaptation, protection, and restoration of
the natural environment as sub issues that
can be identified as exemplary strategic
moves for achieving ecological sustainabil-
ity” (Hahn, 2013, p. 447). These sub issues,
though are critical given the urgency of cli-
mate change and the current time horizon
http://climate.nasa.gov/
vital-signs/carbon-dioxide/
4140 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
22. by effective regu latory and enforcement mech-
anism to defend sustainable development.
4. The free market system has resulted in gross
imbalances in the distribution of wealth and in
the domination of profit by the few. There is
a high correlation between natural resources
and civil war. (The Syrian refugee crisis was
prompted by Syrian governmental crackdowns
on the civilian population over increasing
water shortages.) In many instances, there
have been wars to capture and ensure access
to the natural resources of other countries.
5. A free trade agenda is being advocated by
the WTO, however commercial and trade rights
trump basic human rights under these regimes.
Further, the WTO has not been supportive of
sustainable development pertaining to various
trade issues like insufficient market access
to the products of developing countries and
barriers to the free movement of labor. These
approaches result in environmental harms and
hinder sustainable development.
6. Reconciliation of the personal ethical codes
of employees with corporate ethics encourages
businesses to maximize profits by reducing
costs. This leads to unethical and unsustain-
able business practices (agency issues), such
as the exploitation of labor and excessive pol-
lution. The responsibility of the corporation to
conduct business operations in a responsible
manner is ignored. Further, non-compliance
with voluntary initiatives towards sustainable
practices, actual and perceived greenwashing,
and the violation of national and international
laws by corporations results in the loss of trust
between the public and corporations.
6. Reconciliation of the personal ethical codes
of employees with corporate ethics encourages
businesses to maximize profits by reducing
costs. This leads to unethical and unsustain-
for increasing impacts. What corporations
need to figure out is how to integrate these
“sub issues” into their strategy and embed
sustainability into their operations now.
Yet, globally, challenges and obstacles to
doing so are substantial, as Ahmad, Sos-
kolne and Ahmed (2012) enumerate:
1. Ethics and values, such as justice, equity
and protection of the environment, have al-
ready been incorporated in many existing
national constitutions and international laws.
The challenge lies in their implementation by
governments under existing social conditions
and in the light of the newly emerging threats.
2. Natural resource degradation undermines
every society’s productive capacity. Extensive
water logging, salinity, nutrient depletion,
deforestation and erosion are worsening.
South Asian countries are losing at least $10
billion US annually due to land degradation,
which is equivalent to 2% of the region’s GDP.
Water shortage is considered as one of the
most challenging environmental issues this
century. Water is unevenly distributed across
regions, countries and seasons. Worsening lo-
cal, regional, national and international water
scarcities will depress agricultural production,
exacerbate water-related health problems
and precipitate water conflicts between users
within a country and also between countries.
Further, the efficiency of water use is generally
poor, and in some countries, it is close to 35%.
3. The international community has no effective
supranational framework capable of handling
global environments and social responsibilities.
The United Nations and the World Trade Or-
ganization are strongly influenced by national
interests and their undemocratic functioning.
An effective global framework, such as the
Global Adaptive Governance Scheme advocated
by Bierman and Boas (2010), is needed for
the translation of ethical principles and WTO
measures into meaningful laws accompanied
http://www.nasa.gov/
topics/earth/features/
warming-links.html
https://www.nodc.noaa.gov/
OC5/3M_HEAT_CONTENT/
4342 Embedding Sustainability in Strategic Planning
STRATEGIC OBJECTIVE: SUSTAINABILITYMBA LEAGUE
23. able business practices (agency issues),
such as the exploitation of labor and exces-
sive pollution. The responsibility of the
corporation to conduct business operations
in a responsible manner is ignored. Further,
non-compliance with voluntary initiatives
towards sustainable practices, actual and
perceived greenwashing, and the violation
of national and international laws by corpo-
rations results in the loss of trust between
the public and corporations.
7. Rich countries that should lead in global
dialogue about sustainable development of-
ten exercise a double standard. They often
advocate the selective application of ethical
principles depending on their own interests.
There is a lack of awareness among politicians
or an inability for them to consider sustainable
development issues.
8. The transition to sustainable development is
difficult where power and wealth are concen-
trated in the hands of few people. This elite
group exploits people as they have little inter-
est in abiding by national and international
norms. This holds true particularly for devel-
oping countries where a few families control
the political arena and have a monopoly on
a major part of the wealth.
9. World religions have shown little interest
in sustainable development. Religious insti-
tutions could strengthen the core values of
sustainable development, offer alternatives to
materialism and provide direction to sustain-
ability. These institutions could take a leading
role through collective decision-making by
encouraging moral norms. However, religions
remain isolated from one another and from
other institutions.
10. Many MNCs, media and government ac-
tions have promoted northern (rich countries)
interests and thus have contributed to the
acceptance of an unsustainable northern-
oriented development paradigm.
11. Lack of education and awareness about the
principle of sustainability among consumers
and decision-makers have resulted in the
inadequate adoption of sustainable develop-
ment policies.
12. Sustainable development cannot be
achieved in global societies under a situation
of severe instability and insecurity. Moreover,
efforts for sustainable development will always
be trumped by international security concerns.
13. Science and technology results in the con-
tinuous generation of new knowledge. New
knowledge alters the way in which people
perceive the world. As new knowledge chal-
lenges old paradigms and existing narratives,
institutions that were created under the old
paradigm may be threatened with change or
obsolescence.
(Ahmad, Soskolne, Ahmed, 2012).
In addition to the challenges to sustain-
ability enumerated by Ahmad, Soskolne,
and Ahmed, agency issues in the executive
suite are also formidable obstacles that
discourage a focus on sustainability issues
as they normally negatively impact short
term profitability. Profit measures (e.g.,
operating income and EPS) remain the most
common metrics that trigger CEO compen-
sation packages. Many metrics are industry
specific, and some are unique to individual
companies. Most companies reward bonus
packages, stock options, or other forms of
compensation based upon profit mea-
sures. While such metrics seem logical and
rational, these triggers can create agency
issues, other ethics issues such as what
transpired at Enron and World.com, and a
short term focus and reliance on quarterly
and annual reports rather than a broader
focus on a corporate long-term strategy.
McClure, 2016 explains: “But options are
far from perfect. In fact, with options, risk
can get badly skewed. When shares go up
in value, executives can make a fortune
from options - but when they fall, investors
lose out while executives are no worse off
than before. Indeed, some companies let
executives swap old option shares for new,
lower-priced shares when the company’s
shares fall in value. Worse still, the incentive
to keep the share price motoring upward so
that options will stay in-the-money encour-
ages executives to focus exclusively on the
next quarter and ignore shareholders’ lon-
ger term interests. Options can even prompt
top managers to manipulate the numbers
to make sure the short-term targets are
met. That hardly reinforces the link between
CEOs and shareholders” (McClure, 2016,
paras 9-10).
A short-term focus, a focus on stock price,
a focus on earnings per share and other
metrics not only interfere with long-term
strategy, but it provides a very strong dis-
incentive to ignore substantive long-term
corporate sustainability and social respon-
sibility strategic decisions that may move
the company in a green direction. CEOs get
stuck in a never-ending destructive circle
that reinforces the need to meet financial
goals to maximize compensation rather
than spending time to create virtuous cycles
that would benefit all stakeholders—people,
planet, shareholders and CEOs along with
other corporate executives.
Further complicating the issue is the frag-
mented implementation of CSR in various
corporations already taking place, and an
emerging understanding that sustainability
issues and responsibility for them extend
http://climate.nasa.gov/
system/resources/de-
tail_files/125_3-sea-level-
rise-infographic-full.jpg
4544 Embedding Sustainability in Strategic Planning
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