The term sustainable development was coined almost 15 years ago by the United Nations Conference on Environment and Development to challenge society to make its businesses sustainable. The concept was formally introduced in a 1987 report entitled Our Common Future by the World Commission on Environment and Development of the United Nations. This report has been referred to as "the Brundtland Report" in honor of its Chairperson, Dr. Gro Harlem Brundtland, the then Prime Minister of Norway.

The Commission defined sustainable development as: "...development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

For most of us, development means progress or change for the better. Development involves maximizing the efficiency of resource allocation to meet needs - which is the dominant paradigm of economics at the present time. Thus, essentially sustainable development is an economic concept.

The Commission integrated sustainable development into the world’s economy as follows: Sustainable development is "... a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development ... institutional change and the ability of the biosphere to absorb the effects of human activities are consistent with future as well as present needs."

Sustainable development holds humans responsible for the current state of environment and challenges them to accept responsibility for initiating the changes necessary to attain sustainability. This challenge was reinforced at the United Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro in 1992. The conference’s principal product, endorsed by more than 100 heads of state and close to 10,000 delegates, was an agenda for change, called Agenda 21, a description of perceived needs and proposed actions to bring humankind into harmony with the finite resources of the earth by the middle of the twenty-first century.

There has been little progress since then on the ground that the resources required by the developing countries to implement Agenda 21, estimated at $ 600 billion, have not been forthcoming. Indeed the gap between rich and poor has only widened. According to Mahbub-ul-Haq of Human Development Centre, during the globalization phase about half-a-billion people in South Asia have experienced a decline in their incomes. The income ratio between 20% of the world’s poorest and 20% richest was 1:30 in 1960. It increased to 1:61 in 1997. In 1999 it was 1:74 . As for the environment damage there could not be a more convincing evidence of global warming than the recent shattering of a huge ice shelf, Larsen B, weighing 500 million billion tonnes in Antarctica.

In the ten intervening years since Rio there have been several policy statements on sustainable development at various international fora. In October 1994 a group of 16 scientists, economists, policy makers and business leaders met at Carnoules in France and published a declaration, which is known as the "Carnoules Declaration". The declaration called for radical increase in resource productivity and expressed the hope that within our generation, nations can achieve a ten fold increase in the efficiency with which they use energy, natural resources and other materials. While the group which called itself the "Factor Ten Club" had made only basic commonsensical recommendations for satisfying human needs without unduly damaging environment, the implementation has faced monumental resistance. Some of the European countries such as Netherlands, Norway and Austria have adopted a watered down version of factor 4 improvements (75% reduction in use of resources). Most countries are continuing to spend hundreds of billion of dollars of tax payers money each year on subsidies for mining, oil, coal, fishing and forest industries that promote inefficient and unproductive use of resources.

The problem with the implementation of Sustainable Development agenda as with other issues such as globalization, poverty and inequality is that they are always dealt within isolation and not as a part of a cohesive, integrated approach. Also there is little effort in involving the business and allaying its fears that sustainable development will curtail its profit potential. Little has been done to educate businesses that sustainability strategy can open vast untapped markets and help us serve the unarticulated customers.

For initiatives on sustainable development to succeed business must be involved as the driver of sustainability agenda. Business can be made to realize that the pollution and waste are nothing more than business inefficiencies, process inadequacies and there is money to be spent in their elimination. Business has a lot to gain from sustainable development. Private sector is the key to initiate an overarching strategy for a sustainable future for mankind. With the current rate of obsolescence, 90% of the products that we use today will disappear by year 2010. Business has a great opportunity in changing the production processes and steering the customer demand towards eco-friendly life styles.

An important prerequisite to sustainable development is adoption of good governance practices based on transparency, accountability, equity, integrity and responsibility. My belief is that there are enough good people in the world and strong public opinion to generate money to seed sustainable development strategies in developing countries. The biggest stumbling block to improving environment is poor governance. It is estimated that of the $ 33 billion of international aid for environment and welfare only 18% reaches the right people. In India itself, the government spends as much as Rs. 30,000 crore a year on rural development and poverty alleviation but only a small proportion of the same reaches those who need it.

Our governance systems are also responsible for wasteful subsidies, which damage the environment without helping the economic well being. Subsidies kill competition and help only the inefficient. A recent study by the International Institute for Sustainable Development estimates that global society spends almost $ 1500 billion a year to subsidize activities that cause significant environmental damage. These subsidies foster in-efficiency through perpetuation of lock-in of old technologies and prevent innovation.

Subsidies also rob poor countries of markets. Worst subsidies are to rich European farmers which amount to $ 350 billion a year and are 10 times the total amount of foreign aid received by the entire developing world comprising some 5 billion people. These subsidies constitute a heavy burden even for the citizens of these countries.

Corruption is another serious impediment for Sustainable Development. Tens of billions of dollars exchange hands in graft and kickbacks worldwide. This results in production of wrong goods and services and increasing the existing burden of the poor who are at the receiving end in all such cases. Good governance practices can ensure better market framework conditions by encouraging freedom of competition. The public policy should focus on the targets, the desired end results rather than specifying the means of achieving the result. This cripples collectivity and inhibits businesses to use their innovative ability to reach the target in a most cost-effective manner. Governance structures should be such that they support the entrepreneurial action, and risk-taking or innovation.

Asking businesses to be transparent is a very tall order specially in the context of a raft of scams that have hit the headlines recently. These corporate collapses have threatened the very basics of market mechanism as a means to achieve human aspirations of wealth creation let alone promoting sustainable development. Quite clearly the dominant culture in corporations is not of total transparency but translucence and stealth. It seems that corporates only believe in Richard Nixon’s maxim that they can forget each one of the ten commandants as long as they follow the 11th commandant: "Thou shalt not be found out" .

Eight years after the Cadbury Report it is being increasingly realized that good governance can not be brought simply through codes and statutes alone. Good governance requires transparency and transparency requires courage. We have to change society paradigms if we want to be transparent. We have to start from Schools. There are currently no marks for courage in School syllabus. We forget that no change can take place unless it starts from ourselves. This means I must be convinced that I need to get better. If I think that I am perfect and what I do is the best all the talk about good governance is meaningless. We have to recognize that we are far from perfect but "everyday in every way I am getting better and better". This will bring the humility required to accept our imperfect behavior and bring out the courage to admit it. The problem with our society is that we value material success so much that individuals and organizations are prepared to go any length to manipulate situations to somehow present themselves successful.

The tremendous destruction in shareholder values in ENRON and MARCONI did not come because the companies made wrong business decisions but because they did not share their setbacks to shareholders or even board of directors.

Society has to do something to cultivate a sense of ownership of mistakes and instill pride in admission of failures because no success has come without failure. This is particularly true in the knowledge economy, where we are constantly developing need models and aiming at targets which themselves are revolving. We are bound to have wrong shots before hitting the bull’s eyes. The motto of the Silicon Valley, an area that has contributed maximum wealth is "failure is the badge of honor". The soul of the knowledge economy is innovation. No innovation succeeds in the first attempt. Failures are only milestones in our journey to success. We need to change our reward structure to ensure it prizes not success but good tries. Success can be a fluke. Rewarding "good tries" means you are taking care of the process. Success will follow automatically.

It is an irony that the grueling and mind-numbing poverty that we face in this world exists alongside extreme affluence and abundance. Indeed, when we look at the amount of money we waste it would seem that the world has no shortage of financial resources. United States, which prides itself as the richest country in the world itself, is a classic example of waste. It has been estimated that of the $9 trillion spent every year in the United States, at least $ 2 trillion annually is wasted. What is meant by "waste" in this context? Simply stated, it represents money spent where the buyer gets no value. An example of waste familiar to everyone is sitting in a traffic jam on a congested freeway. Nearly $200 billion a year in energy costs is wasted because we do not employ the same efficiency practices as Japan in businesses, homes, and transportation. In health care, $65 billion is spent annually on nonessential or even fraudulent tests and procedures, $250 billion of inflated and unnecessary medical overhead is generated by the current insurance system. We spend $50 billion a year in health costs because of our dietary choices, and as much as $100 billion on obesity, $274 billion on heart disease and stokes, and $52 billion on substance abuse. Paul Hawken, author of National Capitalism - the Next. Industrial Revolution estimates that as much as one-half of the entire US GDP is attributable to some form of waste. This does not take into account the colossal waste on wars.

Problem of governance is, therefore, not restricted to the emerging economies. The litany of governance woes which has appeared in the press recently indicates that transparency, accountability, integrity, equity and responsibility are rare virtues even in US and UK where both corporate and governments are influenced by ephemeral and short term successes agenda to make it happen. Having suffered the terrorist attacks on 9/11 how can otherwise US resist UN’s call for increasing its international aid to developing countries to achieve the goals of Agenda 21 specially when this increase will amount to only a small proportion of the expenditure on the war on Al Qaida and global terrorism?

Responsible governance can find several ways to bring down the world poverty and inequality than giving handouts. Dramatic results can be achieved if the governments decide they will no longer be taxing income but environmental impact or provide incentives for increasing the productivity of resources. Fostering innovation is another area which can be a great equalizer. It is a tragedy that even after a century of fossil fuel based automobile centered, wasteful economy, we have little of substance to boast about our record for change to renewable. Think how the whole world’s economy can change once we are able to use photo voltaic cells on a massive scale for heating our homes and powering our cars. While the fossil fuel may not last beyond the current century, the solar power is synchronous with human life and therefore infinite. Think how the world economic balance will change once solar power becomes the dominant energy paradigm. It will finish, western hegemony and put Asian and African economies with the abundance of solar energy in the forefront.

In essence there is only one way to transform this world and ensure sustainable development. This is through innovation. But unless you have participatory, transparent, equitable and responsible governance systems, innovation is unlikely to foster. There are so many vested interests who use all kind of tactics to frustrate the innovator. In this connection one only has to read Jim Utterback’s book "Mastering the Dynamics of Innovation". He describes how time after time business’s response to change is by polishing yesterday’s apple. When electric entrepreneurs arrived on the scene in 1880s with the technology so much superior than gas, the gas lighting monopolies strove to make gas lighting more efficient. This resulted in the surge of productivity and for a while it took the old technology to unheard of heights. But in the end the inevitable happened. These improvements simply delayed the impending death of the old technology.

Human ingenuity has no limit. This is our only hope for better environment, a better world, a sustainable world. But to let this ingenuity flourish in a productive way, we must break the current moulds and transcend self-inflicted field barriers. We must educate our children to be more courageous and transparent than we have been ourselves. We must celebrate failure and not fear it. We must value diversity as we value capital. We must build trust, sense of sharing and equity. The upside is that the world is on our side. In a millennium survey of 23000 people in 25 countries and 6 continents last year 34% said that the brand equity of the company depended on management practices, 40% said it was because of quality and an overwhelming, 56% said it depended on the way the company