Sustainable economy, even before a proper definition is made, people tend to relate it to just the physical environment in a way that brings about the inclusion of a green earth and usage of renewable energy. Sustainable economy is also deemed as the fostering of real climate change actions amidst other environmental-wise terminologies. While this is to an extent correct, it does not suffice in totality. This error of reference is made because in reality there is no way that the economy will be sustainable without paying attention to the physical environment. By this, we mean in terms of waste management, plastic pollution and energy conservation. For this reason, the need to explain a sustainable economy and its horizon beyond green environment becomes pronounced.
A sustainable economy is a resilient one which encompass the utilisation of the least number of resources while ensuring that little to no harm is caused to the environment. In this context, the social environment is covered- with the inclusion of the corporate environment in order to bring about the achievement of the people’s well-being and create a more livable future. To Fritjof Capra, it is best to structure the society in a sustainable fashion than invent sustainable human communities because there are already existing models to be followed. In lieu of this, several practices are towards the sustainability of the economy (and affirmed by even the United Nations) like the diversion of economies. Also, the improvement in the industries mode of operation and finance, the removal of inequalities of system and the proper governance of the functioning institutions. The last bit of this brings the practice of corporate governance into limelight.
WHAT THEN IS CORPORATE GOVERNANCE?
To put it simply, corporate governance is the system through which companies and business are controlled by a board of directors. These directors try to incorporate the governmental structure into the business operation and management to allow for accountability, transparency, risk management, responsibility and overall development. However, the term has now covered beyond the walls of the corporate sector. It now refers to the processes involved in setting a long-term effective goal that is value-oriented in the business operations. These goals are aimed at keeping the business sustainable over all the changes that may arise in the future with respect to the systems of doing things, the personnel in charge of these functions and the strategy in place to ensure the achievement of the set goals.
In line with the propagation of a sustainable economy, there is the need for the environmental, social and financial impacts to be considered during the decision-making processes in businesses. To achieve this, emphasis has to be laid on value creation and subsequent growth to ensure an increase in equity. Value creation in both the general objectives of the business and how it affects the economy at large in order to yield a futuristic approach to the particular sector. This can be implemented by including an efficient non-financial reporting of the key operations of the organization as this will allow for a proper monitoring of the growth and development of the institution.
In order to efficiently achieve this, the sustainability must be infused in the financial area. This area involves pulling and attracting investors to put funds in business ideas that will exist to inevitably promote the green earth stance, the utmost utilisation of the available resources without endangering them in any way.
Corporate governance has to be paid attention to primarily because, in the clamor for just a green environment, there is the irreplaceable role of the economy on such related plans. These roles include finance and proper utilization both of which will be adversely affected were businesses to keep closing for the fall in the current market trend. This incorporation, from this light, is very essential to the growth of the economy’s labour market and even the real market which will further the practice of the then more influential green environment; environmental sustainability.
FATHIA ABOLORE YUSUF