World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it.
This was the idea behind the formation of the European Union which was initially formed by the ‘Inner Six’ countries like France, West Germany, Italy, Netherlands, Belgium, and Luxembourg. The origins of the European Union sees its history of 70 years of war and unrest between France and Germany which led to the formation of ECSC(European Coal and Steel Community) under the SchumanPlan of pooling the coal and the steel of France and Germany. The European Union grew out of the aim to build a common political entity to undo the adverse effects of wars and to build up for an ‘internal single market’ with common laws and systems. It was culminated on 7th February 1992 under the Maastricht Treaty.
The Eurozone Crisis began in the year 2008 with a rise in debt of countries like Greece and Ireland. In 2009, Greece had a budgetdeficit of 12.9% of the GDP. That was more than 4 times of the limit suggested by the European Union which is 3%. The investors were discouraged. As a result, the investors sold the bonds of these countries to purchase the bonds of more credible countries like Germany and France. The uncertainty of the European Central Bank to act in such a situation led to a liquidity crisis and an erosion of the credibility of the European Union. Eurozone Crisis also demonstrated that it was the delayed collective action by the European Union that strengthened the ulterior motives of the Financial markets to make profits out of the difference in the bond prices of the different member states. The economic conditions in the year 2010 exposed the loopholes in the European Union’s foundation. There can be numerous reasons for this. They are as follows: –
Lack of a single currency – A single currency means a union or a political union but that is a distant dream as member states think that it would jeopardize their sovereignty.
No Federal European Government– Because of a no common governing body, there is no mechanism to set a central tax or budget policy. All member states under it are sovereign having their own political complexities in their respective countries.
No common Euro Bonds– Due to the lack of a common budgetary policies, well to do countries like Germany have rejected to subscribe to a common euro bond. They withdrew to underwrite Europe wide bond issues.
The United States Link-What happens in a country doesn’t stay in a country in the interconnected financial system of the world. The European Debt crisis was not just limited to Greece, but it had connection with the spending of the US government budget. US contributes approximately forty percent to the International Monetary Fund’s Capital. Waiving off the debts of Greece means adding additional burden to the Taxpayers in US.
Not just economic, Even Political Issues involved in emerging the Crisis. They are as follows: –
Austerity led to Protests: – The countries who were adversely affected by the Eurozone crisis switched to austerity. (Austerity is a set of political and economic policies which intends to reduce the government deficits either by increasing taxes or cuttingdown expenditure). Austerity leads to decline in the consumption and the employment rate of a country. A lot of protests occurred in Spain and Greece against the government because of the increased unemployment. Austerity measures even led to the removal of party in power in countries like Italy and Portugal.
Financially sound countries vs High Debt countries: – European Union saw a strain in the relationship between fiscally sound nations like Germany and the nations under high debt like Greece. Germany was not ready to ratify to a region wide solution rather pushed such countries to make changes in their budget policy. These situations might have led any of the member state to leave the Euro. There was a high possibility of the weakening of Euro against the other currencies in the global market. This crisis, indeed,witnessed the periodic weakness of the Euro.Slovakia andLithuania refused to bear the burden of Greece’s debt. Even these two countries resorted to austerity measures but without any aid from the EU.
Greece had manipulated its balance sheet to conceal its debts and it was also the result of long years of tax evasion, fiscal mismanagement and authorities misleading the reports.
The European Financial Stability Facility paid a bailout of 190 billion euros in the year 2011. It was only in the year 2014, that Greek economy was able to recover a bit and grew by 0.7% and successfully balanced the budget by selling its bonds. The crisis was not just limited to Greece.
Even Ireland’s banks borrowed loans from the housing market in the year 2008 which led to a huge debt crisis by 2010. $112 billion EU- IMF package was given to Ireland in exchange of following Austerity measures. This was again a severe Eurozone crisis with the Irish economy’s decline in output by 10% and Unemployment rising to 13% in the year 2010.
Portugal also received an aid of $116 billion in the year 2011 from the EU as it fell into recession as the deficit grew for about more than 10% of the GDP in the year 2009. Not just this, the deficit shifted to large countries like Italy and Spain too leading to an overall Eurozone crisis.
WHY DID GERMANY REFUSE TO ADJUST IN THE EUROZONE CRISIS?
Germany had the world’s largest current account surplus of almost 8% in the year 2017 (IMF 2018). And Regional Imbalances have led to the Balance of Payment crises (Schularick and Taylor 2012). Consequently, there had been a resentment against Germany in the international arena. But the following reasons can be the attributed why Germany didn’t behave accordingly: –
- Current account Surplus may not be always interpreted as beneficial to the economy. It indicates that investments in public and private sector has not been enough. (Bach et al. 2013, Sudekaum and Felbmayr 2017).
- With an intention to balance against Germany by reducing its current account surplus may not work. It may lead to their improved infrastructure, higher wages, higher inflation and also a higher consumption.
- With the rise in inflation, the debt burdendeclined, and the wages of the workers in the Non- Tradable Section rose. The High Export dependence of Germany on the foreign nations tarnished its image. Also, the current account surpluses are also related with net capital outflow.
The solution here was not to punish Germany but coming to terms with the fact that Internal Adjustment too, may not have positive consequences all the time. Moreover, A current account surplus was needed for an ageing country like Germany.
GREECE- LEARNING FROM THE MISTAKES OF THE EUROZONE CRISIS
Greece, which were the odd ones out in the Eurozone crisis and had its credibility crippled in the past ten years seemed to have learnt lessons. At present, it is one of the best performing countries in Europe with respect to flattening the Covid curve according to an analysis by the Bridge Tank. Not all perish in a crisis, few turn it into an opportunity.Kyriakos Mitsotakis, The Prime Minister of Greece along with the Sydney born Harvard immunologist Sotiris Tsiodras received praises for handling the Covid crisis. The deaths due to Covid was controlled unlike Italy which turned out to be a disaster.
According to Dr.Ladi, an expert whose field of study includes the Eurozone crisis and role of experts in the public policy said that “ Because of the previous crisis the people were better prepared to react and the country’s leadership worked very quickly compared to others who reacted late’’.
IS BULGARIA JOINING THE EUROZONE ANSWER TO IT’S PROBLEMS?
Bulgaria and Croatia are the latest Eastern European countries who are ready to adopt the Euro currency after meeting certain economic and regulatory criteria. This enlargement has come after a decade long of crisis which deterred the countries from joining. However, the inclusion of these two relatively poor countries may bring risks along with it. The Eurozone has already suffered much because of Greece’s rising debt which destabilized the entire currency in the former decade. Analysts have warned before hand only that the two countries in question may have a hard time in fulfilling criteria like Low Public Debt and the Rule of Law. Croatia is expected to increase its debt to 86% of the GDP by this year which is yet again above the 60% level that the European authorities accept.
Bulgaria joined the EU in the year 2007 and has expressed its intentions of joining the euro area since the year 2009 until the debacle in the form of Eurozone crisis occurred which hindered its entrance at the prevailing circumstances then. With the economic recovery in the year 2018, It again wanted to join the Euro Club. To join the club, it needs to fulfil two conditions: –
- It must join the Exchange Rate Mechanism (ERM ii) – a waiting room where a country introducing the euro is required to stay for a minimum period of two years at least.
- The Public Debt levels must not exceed 25% of the GDP (Bulgaria’s GDP here)
Few officials of the Eurozone have expressed their concerns and are quite apprehensive about Bulgaria in the zone. According to them, Bulgaria’s entry will do no good or rather repeat the ‘Greek scenario’. Besides this, Bulgaria also must fulfil the ‘additional’ requirements of joining the Banking Union which was not a requirement before but would be implemented from now onwards. Joining the Banking Union means the scrutiny of the Big Banks of Bulgaria. This is quite obvious with news of the collapse of the Biggest bank in Bulgaria in the year 2014. The European Central Bank is being a watchdog here and Banks in Bulgaria have been given time to create additional capital buffers till April 2020. It must be noted that the FI Bank has still not fulfilled the criteria.
There are other factors as well which act as an instrument to demotivate Bulgaria to the Eurozone. Those are as follows:-
- No adequate support from the public for the introduction of Euro in Bulgaria.
- The EU area crisis is also a factor.
- Depiction of EU as a fading power.
- Bulgaria is also seen as an under- performing state and the common currency works in the interest of the third parties.
- Gaining domestic support and Anti – EU voices is much easier than in favour of it.
The Bulgarian government doesn’t want to escape this opportunity of joining the EU zone in the Corona crisis. It would be interesting to see whether it gets successful or not.
Today, in the times of Corona, The European Central Bank seems to have learnt from its past mistakes unlike the Eurozone Crisis. It has acted quickly and has kept the borrowing costs low for all countries in the Euro Zone because as per the forecasts done by IMF, the public debt will reach almost 100% of the GDP by the year end. To cope up with this, the head of the ECB, Ms. Christine Lagardesaid that economic implications of Covid- 19 would result in decrease in the supply chain by approximately 35% and would also expose us to a rise in the inequalities in the Euro- Zone. Factors such as Climate Risk and bio-diversity will be taken into account while drafting plans. The ECB also created a Pandemic Emergency Purchase Programme worth of € 750 billion involving both government and private debt. A decision regarding the same is to be made in the upcoming EU Summit which will be held on the 17 and 18th July 2020.
A New Strategy for Ukraine
Authors: Anna Bjerde and Novoye Vremia
Four years ago, the World Bank prepared a multi-year strategy to support Ukraine’s development goals. This was a period of recovery from the economic crisis of 2014-2015, when GDP declined by a cumulative 16 percentage points, the banking sector collapsed, and poverty and other measures of insecurity spiked. Indeed, we noted at the time that Ukraine was at a turning point.
Four years later, despite daunting internal and external challenges, including an ongoing pandemic, Ukraine is a stronger country. It has proved more resilient to unpredictable challenges and is better positioned to achieve its long-term development vision. This increased capacity is first and foremost the result of the determination of the Ukrainian people.
The World Bank is proud to have joined the international community in supporting Ukraine during this period. I am here in Kyiv this week to launch a new program of assistance. In doing this, we look back to what worked and how to apply those lessons going forward. In Ukraine—as in many countries—the chief lesson is that development assistance is most effective when it supports policies and projects which the government and citizens really want.
This doesn’t mean only easy or even non-controversial measures; rather, it means we engage closely with government authorities, business, local leaders, and civil society to understand where policy reforms may be most effective in removing obstacles to growth and human development and where specific projects can be most successful in delivering social services, particularly to the poorest.
Looking back over the past four years in Ukraine, a few examples stand out. First, agricultural land reform. For the past two decades, Ukraine was one of the few countries in the world where farmers were not free to sell their land.
The prohibition on allowing farmers to leverage their most valuable asset contributed to underinvestment in one of Ukraine’s most important sources of growth, hurt individual landowners, led to high levels of rural unemployment and poverty, and undermined the country’s long-term competitiveness.
The determination by the President and the actions by the government to open the market on July 1 required courage. This was not an easy decision. Powerful and well-connected interests benefited from the status quo; but it was the right one for Ukrainian citizens.
A second area where we have been closely involved is governance, both with respect to public institutions and the rule of law, as well as the corporate governance of state-owned banks and enterprises. Poll after poll in Ukraine going back more than a decade revealed that strengthening public institutions and creating a level playing field for business was a top priority.
World Bank technical assistance and policy financing have supported measures to restore liability for illicit enrichment of public officials, to strengthen existing anticorruption agencies such as NABU and NACP, and to create new institutions, including the independent High-Anticorruption Court.
We are also working with government to ensure the integrity of state-owned enterprises. Our support to the government’s unbundling of Naftogaz is a good example; assistance in establishing supervisory boards in state-owned banks is another. We hope our early dialogue on modernizing the operations of Ukrzaliznytsia will be equally beneficial.
As we begin preparation of a new strategy, the issues which have guided our ongoing work—strengthening markets, stabilizing Ukraine’s fiscal and financial accounts; and providing inclusive social services more efficiently—remain as pressing today as they were in 2017. Indeed, the progress which has been achieved needs to continue to be supported as they frequently come under assault from powerful interests.
At the same time, recent years have highlighted emerging challenges where we hope to deepen and expand our engagement. First, COVID-19 has underscored the importance of our long partnership in health reform and strengthening social protection programs.
The changes to the provision of health care in Ukraine over recent years has helped mitigate the effects of COVID-19 and will continue to make Ukrainians healthier. Government efforts to better target social spending to the poor has also made a difference. We look forward to continuing our support in both areas, including over the near term through further support to purchase COVID-19 vaccines.
Looking ahead, the challenge confronting us all is climate change. Here again, our dialogue with the government has positioned us to help, including to achieve Ukraine’s ambitious commitment to reduce carbon emissions. During President Zelenskyy’s visit to Washington in early September we discussed operations to strengthen the electricity sector; a program to transition from coal power to renewables; municipal energy efficiency investments; and how to tap into Ukraine’s unique capacity to produce and store hydrogen energy. This is a bold agenda, but one that can be realized.
I have been gratified by my visit to Kyiv to see first-hand what has been achieved in recent years. I look forward to our partnership with Ukraine to help realize this courageous vision of the future.
Originally published in Ukrainian language in Novoye Vremia, via World Bank
Russia, China and EU are pushing towards de-dollarization: Will India follow?
Authors: Divyanshu Jindal and Mahek Bhanu Marwaha*
The USD (United States Dollar) has been the world’s dominant currency since the conclusion of the second world war. Dollar has also been the most sought reserve currency for decades, which means it is held by central banks across the globe in significant quantities. Dollar is also primarily used in cross-border transactions by nations and businesses. Without a doubt, US dollar’s dominance is a major reason for the US’ influence over public and private entities operating around the world. This unique position not only makes US the leader in the financial and monetary system, but also provides incomparable leverage when it comes to coercive ability to shape decisions taken by governments, businesses, and institutions.
However, this dynamic is undergoing gradual and visible changes with the emergence of China, slowdown in the US economy, European Union’s independent policy assertion, Russia-US detachment, and increasing voices from across the world to create a polycentric world and financial system in which hegemonic capacities can be muted. The world is witnessing de-dollarisation attempts and ambitions, as well as the rise of digital or cryptocurrencies at an increasing pace today.
With Russia, China and EU leading the way in the process of de-dollarisation, it needs to be argued whether India, currently among the most dollarized countries (in invoicing), will take cue from the global trends and push towards de-dollarisation as well.
The dominant role of dollar in the global economy provides US disproportionate amount of influence over other economies. As international trade needs a payment and financial system to take place, any nation in position to dictate the terms and policies over these systems can create disturbances in trade between other players in the system. This is how imposition of sanctions work in theory.
The US has for long used imposition of sanctions as a tool to achieve foreign policy and goals, which entails restricting access to US-led services in payment and financial transaction processing domains.
In recent years, several nations have started opposing the unilateral decisions taken by the US, a trend which accelerated under the former president Donald Trump’s tenure. He withdrew US from the JCPOA deal between Iran and US, aimed at Iran’s compliance with nuclear discipline and non-proliferation. Albeit US withdrawal, other signatories like EU, Russia, and China expressed discontent towards the unilateral stance by the US and stayed committed towards the deal and have desired for continued engagements with Iran in trade and aid.
Similarly, the sanctions imposed on Russia in the aftermath of the Crimean conflict in 2014 did not find the reverberations among allies to the extent that US had wanted. While EU members had switched to INSTEX (Instrument in Support of Trade Exchanges) which acts as a special-purpose vehicle to facilitate non-USD trade with Iran to avoid US sanctions, EU nations like Germany continue to have deep trade ties with Russia, and EU remains the largest investor as well the biggest trade partner for Russia, with trade taking place in euros, instead of dollars.
Further, despite the close US-EU relations, EU has started its own de-dollarization push. This became more explicit when earlier this year, EU announced plans to prioritize the euro as an international and reserved currency, in direct competition with dollar.
Trajectories of Russia, China, and EU’s de-dollarisation push
Russia has emerged as the nation with the most vigorous policies oriented towards de-dollarization. In 2019, the then Russian Prime Minister Dmitry Medvedev had invited Russia’s partners to cooperate towards a mechanism for switching to use of national currencies when it comes to transactions between the countries of the Shanghai Cooperation Organization (SCO). It must be noted that in Eurasian Economic Union (EAEU), which functions as a Russian-led trade bloc, more than 70 percent of the settlements are happening in national currencies. Further, in recent years, Russia has also switched to settlements in national currencies with India (for arms contracts) and the two traditionally strong defence partners are aiming at exploring technology as means for payment in national currencies.
Russia’s push to detach itself from the US currency can also be seen in the transforming nature of Russia’s foreign exchange reserves where Russia for the first time had more gold reserves than dollars according to the 2018 data (22 percent dollars, 23 percent gold, 33 percent Euros, 12 percent Yuan). As per the statement by Russian Finance Minister in 2021, Russia aims to hold 40 percent euro, 30 percent yuan, 20 percent gold and 5 percent each of Japanese yen and British pound. In comparison, China holds a significant amount of dollar denominated assets as forex reserves (50 to 60 percent) and has the US as its top export market with which trade takes place mostly in US dollars. Moreover, Russia has also led the push by creating its own financial messaging system- SPFS (The System for Transfer of Financial Messages) and a new national electronic payment system – Mir, which has witnessed an exponential rise in its use.
While China-Russia trade significantly depends on euros instead of their own national currencies (even though use of national currencies is slowly rising), instead of pushing the Chinese national currency Renminbi (RMB), Beijing is aiming towards establishing itself as the first nation to issue a sovereign digital currency, which would help China to engage in cross border payments without depending on the US financial systems. Thus, for China, digital currency seems to be the route towards countering the dollar dominance as well as to increase its own clout by leading the way for an alternate global financial system operating in digital currencies. It needs to be noted here that EU has succeeded in internationalizing the euro and this can be seen in the fact that EU-Russia trade as well as Russia-China trade occurs predominately in euros now.
Will India follow suit?
Indian economy’s dynamic with dollar is different than other major economies in the world today. Unlike China or Russia (or EU and Japan), which hold dollars in significant amounts, India’s reserve is not resulted by an export surplus. While others accumulate dollars from their earnings of trade surplus, India maintains a large forex reserve even though India imports less than it exports. In India’s case, the dollar reserves come through infusion of Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI), which reflects the confidence of foreign investors in India’s growth prospects. However, accumulation of dollar reserves through this route (which helps in offsetting the current deficit faced in trade), India remains vulnerable to policy changes by other nations’ monetary policies which are beyond India’s own control. For instance, it has been often highlighted that a tightening of the US monetary policy leads to capital outflows (capital flight) from India, thus impacting India adversely.
New Dehi has resisted a de-dollarization push for long. Back in 2009, when Russia and China had started the push via BRIC mechanism (Brazil, Russia, India, China grouping), it was argued that New Delhi would not like to upset Washington, especially after the historic US-India civil nuclear agreement was signed just a year before in 2008 -for full civil nuclear cooperation between the two nations.
Further, currency convertibility is an important part of global commerce as it opens trade with other countries and allows a government to pay for goods and services in a currency that may not be the buyer’s own. Non-convertible currency creates difficulties for participating in international market as the transactions take longer routes for processing (which in case of dollar transactions, is controlled by US systems).
Just like Chinese renminbi, Indian rupee is also not yet fully convertible at the exchange markets. While this means that India can control its burden of foreign debt, and inflow of capital for investment purposes in its economy, it also means an uneasy access to capital, less liquidity in financial market, and less business opportunities.
It can be argued that just like the case of China and Russia, India can also look towards having a digital currency in the near future, and some signs for this are already visible. India can also look towards having an increased share of euros and gold in its foreign exchange reserves, a method currently being used by both China and Russia.
An increasing number of voices are today pointing towards the arrival of the Asian age (or century). With China now being the leading economic power in the world, US economy on a slowdown, and emergence of an increasing polycentric structure in world economy, the dominance of dollar is bound to witness a shake-up. In order for global systems to remain in sync with the transforming economic order, structural changes like control over leading economic organisations (like IMF and World Bank) will become increasingly desirable.
With an increasing number of nations now looking towards digital currencies and considering a change in the mix of their foreign exchange reserves, a general trend is now visible even if it would not mean an end to dollar’s dominance in the immediate future. As the oil and gas trade in international markets also start shifting from dollar, geopolitical balance of power is expected to witness a shift after decades of US dominance.
Major geopolitical players like China, Russia and EU have already started their journey to counter the dominance of dollar, and the strings of US influence on political decisions that come with it. According to Chinese media, Afghanistan’s reconstruction after US-withdrawal can also accelerate the global de-dollarization push as nations like Saudi Arabia might look for establishing funds for assisting Afghanistan in non-dollar currencies. So, conflict areas highlight another avenue where de-dollarization push will find a testing arena in coming times.
India has several options for initiating its de-dollarization process. Starting from Russia-India transactions, trade with Iran, EAEU, BRICS and SCO members in national or digital currencies can also become a reality in near future. Considering India’s present dollar dependence, whether US sees India’s move towards de-dollarisation as a direct challenge to US-India relations, or accepts it as a shift in the global realities, has to be seen.
*Mahek Bhanu Marwaha is a master’s student in Diplomacy, Law and Business program at the OP Jindal Global University, India. Her research interests revolve around Indian and Chinese foreign policies and trade relations.
Today’s World Demands Sustainability
In the Brundtland Report, the United Nations defined sustainable development as development that satisfies current demands without jeopardising future generations’ ability to meet their own. It is based on the assumption that resources are finite and should be used sparingly and wisely to guarantee that there is enough for future generations without lowering current living standards. A socially responsible society must prioritise environmental conservation and dynamic equilibrium in human and natural systems.
Pillars of Sustainability
Environmental, social, and economic pillars make up the concept of sustainability, which is sometimes known as profits, planet, and people informally. These are especially important in terms of corporate sustainability and company activities.
The most frequently discussed aspect is environmental protection. As part of a supply chain, it is concerned with reducing carbon footprints, water usage, non-decomposable packaging, and wasteful operations. These procedures can be both cost-effective and beneficial to the bottom line, as well as crucial for environmental sustainability.
Social development entails treating people fairly and ensuring that employees, stakeholders, and the society in which a business operates are treated responsibly, ethically, and sustainably. More responsive benefits, such as greater maternity and paternity benefits, flexible scheduling, and learning and development opportunities, could help achieve this. Businesses should, for example, utilise sustainable labour, which entails adequately compensated, mature employees who can work in a safe atmosphere.
Economic development is probably the most straightforward type of long-term sustainability. A firm must be successful and generate enough money to be economically sustainable in the long run. The difficulty with this type of sustainability is finding a balance. Rather than producing money at any cost, businesses should try to make money in a way that is consistent with other aspects of sustainability.
What can be done to quantify it?
The performance of the three basic principles as a whole, in particular a balanced treatment of all three, is used to assess sustainability. Although the Triple Bottom Line’s three core concepts do not provide a measurement methodology in and of themselves, subsequent approaches of assessing sustainability have attempted to do so. Despite the fact that there is no official universal assessment of sustainability, several organisations are developing industry-specific methods and techniques to assess how social, environmental, and economic principles operate within a corporation.
What Impact Does Sustainability Have on Business?
Sustainability is becoming increasingly crucial for all businesses, regardless of industry. A sustainability strategy is considered necessary by 62 percent of executives today, and another 22 percent believe it will be in the future.
Simply expressed, sustainability is a business strategy for generating long-term value by considering how a company works in its environmental, social, and economic contexts. The concept behind sustainability is that establishing such measures promotes firm lifespan. Companies are realising the need to act on sustainability as expectations for corporate responsibility rise and transparency becomes more widespread.
Executives today face a complex and unprecedented confluence of social, environmental, market, and technology forces. This necessitates comprehensive, long-term management. Executives, on the other hand, are frequently hesitant to make sustainability a priority in their company’s business plan, mistakenly believing that the costs exceed the advantages. Academic research and corporate experience, on the other hand, suggest the exact reverse.
Traditional business strategies prioritise shareholder value creation at the expense of other stakeholders. Sustainable companies are changing the corporate ecosystem by creating models that benefit all stakeholders, including employees, shareholders, supplier chains, civil society, and the environment. The concept of “creating shared value” was pioneered by Michel Porter and Mark Kramer, who argued that firms might generate economic value by recognising and addressing social issues that connect with their business. Much of the strategic value of sustainability stems from the requirement to communicate with and learn from important stakeholders on a regular basis. A corporation with a sustainability agenda is better positioned to foresee and react to economic, social, environmental, and regulatory changes as they happen through regular discussion with stakeholders and continuous iteration.
Moreover, Businesses can benefit from the Triple Bottom Line approach to running a firm in a variety of ways. Meeting UN environmental sustainability requirements is not only ethical and necessary, but it is also cost-effective and enables for a better business model. Furthermore, sustainability allows a company to recruit employees, owners, and consumers who are invested in and share the same values as the company’s sustainability aims. As a result, the impact of sustainability on a company’s reputation and income can be favourable
Why is Sustainability Important for Students
Sustainability is a comprehensive field that provides students and graduates with knowledge of almost every element of human life, from business to technology to the environment and social sciences. The essential skills with which a graduate leaves college or university are in high demand, especially in a modern society seeking to substantially reduce carbon emissions while also discovering and developing future technologies. Politics, economics, philosophy, and other social sciences, as well as the hard sciences, are all used to support sustainability.
As firms seek to comply with new legislation, many corporate occupations at the graduate level and above prioritise sustainability skills and environmental awareness. As a result, sustainability graduates will work in a variety of sectors, including civic planning, environmental consulting (both built and natural environments), agribusiness, non-profit management, corporate strategy, health evaluation and planning, and even law and decision-making. Entry-level occupations are on the rise, and bachelor’s grads may expect more options and opportunities in the future years. Sustainability is one of the newest degree programmes, attempting to combine social science, civic engineering, and environmental science with future technology. When we hear the phrase “sustainability,” we usually think of renewable energy sources, carbon reduction, environmental protection, and a strategy to keep our planet’s delicate ecosystems in check. In a nutshell, sustainability aims to safeguard our natural environment, human and ecological health, while also encouraging innovation and ensuring that our way of life is not jeopardised
Even if you aren’t studying environmental science, sustainability is an important topic to learn about. Sustainability is important for business majors to understand since it helps with customer appeal and Corporate Social Responsibility. Students studying agriculture, nutrition, and public health should concentrate on sustainability to understand how to feed a growing population nutritious and high-quality food. Majors in education pass on their knowledge of sustainability to the next generation, preparing them to lead change. Every major has a link to the environment
The Long Run
As people continue to live more sustainable lives as a result of the climate problem, there is a current drive towards sustainability as a more desirable focus for businesses. Positive climate impact across the entire value chain, improved influence on the environment, people, and atmosphere, and useful contribution into society will most likely be expected of businesses in the future. Companies will be held responsible for all parts of the industry, and any environmental damage or harmful emissions from production operations should be controlled or eliminated. In what is known as a ‘circular economy,’ it is also predicted that resources will be reused to accommodate the global growth in population. This transformation would allow one person’s garbage to become another’s resource, resulting in significant waste reduction and a more efficient supply chain.
As we approach the start of a new year, we’re acutely aware of the growing urgency in the climate movement, as well as the need for action to catch up to ambition. Not only for researchers and policymakers, but for everyone—business executives, negotiators, and communicators—there is still much work to be done. We have a better chance of constructing a sustainable future if we can share what is working.
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