Can we have a green economy in a capitalist one?

'Businesses are now seen as agents of socio-economic change.”


Our Correspondent June 21, 2012

KARACHI:


A push towards a “green economy” in Pakistan is still far from realisation. But the good news is that Pakistani corporations are stepping forward to be more responsible in their practices and realising the advantages it can have for business.


The Association of Chartered Certified Accountants (ACCA) and the World Wide Fund for Nature Pakistan (WWF-P) organised a green-economy forum at Marriott on Thursday. The issues related to moving towards a green economy were talked about with a heavy capitalist slant.

The director-general of WWF-P, Ali Hassan Habib, laid out one of the glaring contradictions of the idea of a green economy. He paraphrased Jorgen Randers - the two root causes of environmental degradation and short-term profit driven planning are capitalism and democracy.

“In spite of the standards set in your professions, you are making a personal effort to change the banditry of profit,” Habib told the panel of accountants and finance specialists. “But that doesn’t mean that nothing positive is coming out Pakistan.”

Arif Masud Mirza, the head of the ACCA in Pakistan, said that businesses in the country have to start realising the potential for a green economy. “Businesses are now seen as agents of socio-economic change,” he reasoned. “There is under-investment in ecosystem services and there is a preference for short term gains over sustainability. But there is also a growing demand for responsible products.”

Mirza said that about 10 years ago, only around five companies used to submit their sustainability or ‘integrated reports’- which include social and environmental costs in the company’s annual corporate reports. Now, 78 companies submit their sustainability reports. The reports in Pakistan were even better than the ones Mirza had seen in the rest of South Asia.

“Frankly speaking, at the moment, the focus is not so much on sustainability. It is driven by business, not by sustainability,” Asad Ali Shah, partner at M Yousuf Adil Saleem & Co (Deloitte). “Sustainability has to be seen from a new angle. It doesn’t refer only to environmental or social sustainability but also sustainable profitability.”

At the moment the regulations in place to oblige businesses to have more responsible practices are virtually non-existent.

Habib of the WWF-P suggested that at least the top five per cent publicly listed businesses should be forced to apply certain standards. In case they do not, they should be de-listed.

However, the CEO of Capital Institute Market, Syed Javed Hassan, didn’t agree with this solution. “I find that encouragement and a rewards system works better than penalties,” he said. “Don’t discriminate. It is better to get everyone to work within the framework in a broad manner.”

Published in The Express Tribune, June 22nd, 2012.

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