Home and Hearth: Sustainable Development of Cities

Home and Hearth: Sustainable Development of Cities

A Discussion on Achieving the UN Sustainable Development Goal on Cities and Communities

Introduction

It’s a cliché that we live in unprecedented times. And yet, this may the one time that it’s worth saying it anyway: the world’s human population is larger than ever, bringing with it all the problems that come with human settlement, magnified many times over by population explosion. Cities, the hallmarks of civilization with burgeoning commerce and bustling culture, are home to a rapidly increasing population. Collectively, today’s cities are the densest population agglomerations in history. Modern cities may justly be heralded for catalytic environ that enabled the incredible social mobility of contemporary history, and are well worth preserving and nurturing.

However, the current state of affairs is saddening because these cities have become overcrowded with creaking infrastructure, poor civic amenities, massive waste generation, and often ill-equipped to handle disasters like floods, droughts, etc. The economic organization of modern cities is much to blame for the unsustainable consumption and self-perpetuating economic inequities of today.

Maintaining and developing cities sustainably involves trade-off in terms of costs and benefits involved. On the cost side, we have the finances it takes to train people, developing systems and operating procedures while the benefits in a typical scenario are long term such as green environments, lesser ecological footprint, more recycling which all are for future generations. The key stakeholders are the consumers (private), government (public), corporations and NGOs. Several countries have introduced legislation mandating investment in renewable energy and CSR expenditure towards environmental preservation; these efforts took largely shape after the COP 21 in 2015 in Paris. However, what’s being done today falls well short what needs to be done.

The United Smart Cities challenge as a Sustainable goal was initiated by UNECE and few other industrial partners. The policy has the following focus areas - urban mobility, sustainable housing, clean energy, waste management and ICT. The expectations of the policy include a) Decreasing vulnerability of cities to urban migration, demographic changes, environmental degradation and climate change b) Reducing carbon footprint of cities c) Enhancing the quality of life for inhabitants d) Improve the environmental quality of the cities and e) Establishing public-private partnerships (PPPs)

Relevance to India

As a rapidly urbanizing country, India is facing a huge surge in economic growth. The urban population is estimated to be 40% by 2030 from 28% in 2001. While this may be seen as a positive sign for the country’s economic progress, it presents enormous challenges and risks that come with large scale urban sprawl. India faces a large governance challenge, with what’s been popularly termed the ‘policy paralysis’ – an umbrella term covering governance shortfall in areas that most desperately need it.

India ranks 3rd in the world in terms of its energy consumption despite falling short of its energy needs by ~20%. As per the BP Energy Outlook 2035 report, the country’s demand for energy is expected to grow by 132% by 2035, a huge chunk of which will be consumed in cities.  Currently, the primary energy source in the country is coal, followed by crude oil. Presently, the primary source of energy in the country is coal followed by crude oil. The share of renewable sources (excluding hydroelectricity) in the energy mix is abysmally low. Therefore, improving energy efficiency should be an important goal as a part of our efforts towards sustainably developing cities.

A major portion of Indian cities and states face drastic resource scarcities such water shortages (polluted and sometimes even toxic rivers). Sprawling slums have worrying levels of sanitation, leading to a poor quality of life for its residents. Poor amenities correlate strongly with poor life outcomes, and urban administrations have been unable to combat the trend of increasingly poor living conditions in poorer urban communities.

However, some steps have been taken by the Indian government in the recent past in order to create a more sustainable living environment. Amravati in Andhra Pradesh is part of one such initiative.  The local government has engaged with Norman Foster to help redesign and remodel the city. The aim is to create jobs and homes for all, a world-class infrastructure, a green city and efficient resource management. Shaded walkways to encourage people to walk more often, extensive use of solar energy and a transportation system that involves electric vehicles, dedicated cycle routes and water taxis, are in the pipeline for the next 25 years.

India became a part of the Earth Hour City Challenge (EHCC), (which is a global challenge for cities to present ambitious, holistic, inspiring plans for low carbon development in different sectors including energy, transport, housing and waste) in 2012.  Since then, 24 Indian cities have engaged in this challenge, out of which, Delhi, Coimbatore, Thane and Rajkot have been the National Earth Hour Capitals.

Role of Businesses

It is often perceived that the sustainability debate is anti-corporate and anti-business in design Debates around oil and a switch to renewables is vehemently denounced by some political ideologues as fundamentally an impediment to business.

However, it is extremely interesting to note that one can align economic incentives and sustainability. Sustainability need not come at the cost of profit, but can rather serve as an engine of growth for businesses. It is extremely critical that businesses adapt their practices and align them with SDGs and other sustainability initiatives not only because of the aforementioned reason of growth, but also because their long term growth prospects will be hampered if they do not ensure that the collective business practices of that industry is actually sustainable in the long term.

A classic example of this is the Oil industry. A switch to renewables now defines the strategy of major corporates such as Shell in their efforts to rebrand themselves as an Energy company rather than merely petrochemicals.

Specifically, SDG 11 is critical for businesses. By 2050, an estimated 70% of the world’s population will be living in cities. More and more businesses are now moving towards densely populated cities. This makes it more imperative that Urban spaces are sustainable w.r.t Air, water, human resources and other essentials. Many cities across India are facing dire water crisis that might result in many of them being uninhabitable in the future [1]

Hence, the responsibility of businesses is twofold : a) To adhere to environmental norms and align their business goals to the SDGs 2) To develop solutions that ensure urban sustainability.

Adherence to environmental norms has become a key differentiator for many firms. Gone are the days when corporate excesses would be ignored by the wider world. With the advent of social media, a new generation has arisen which is environmentally conscious and corporate violations or excesses will result in significant damage to the corporation’s brand.

Companies are increasingly adopting the sustainability reporting practice. The value of sustainability reporting is that it ensures organizations consider their impact on sustainability issues and enables them to be transparent about the risks and opportunities they face. In addition to financial reporting, this demonstrates the corporate’s commitment to sustainability.  [2]

The sustainability reports of the following companies have been provided in the references.

1. )     Accenture Strategy

2. )     Mondelez

3. )     BCG

4. )     Amazon

 Corporate solutions for sustainability

Sustainability is often thought to be the purview of governments, but corporations can play a greater role to ensure sustainability. This is because governments in general cannot match the efficiency and speed of a corporate.

A very popular approach towards sustainable cities is the Smart city model.  Here, technology is embedded at every layer of an urban sprawl. Devices continuously monitor key parameters in the city and an overlaying layer of technology can act on these measurements. Various interventions can be designed to ensure that the key parameters of the city remain sustainable and healthy.

An instance of a corporate attempting to do this is Cisco’s smart communities program in partnership with German city of Hamburg [6]

Internet of things is a key component of the smart city model.

An article in the HBR identifies the following business opportunity in smart cities [7] –

1. )     New business models that generate profits by optimizing the use of resources

2. )     Financial engineering that encourages investments in efficiency

3. )     Careful selection of markets.

The article argues for sophisticated financial engineering to identify and pursue business opportunities in smart cities. Simultaneously, the technical sophistication of the solutions is also evaluated and companies can position their offerings as per the following matrix –

This helps companies evaluate their current offerings and develop competencies that can successfully leverage the opportunities provided by the global move towards sustainability.

Conclusion

Corporations today have a tremendous opportunity to lead the way towards a sustainable future. The tired old paradigm of profit-sustainability trade off needs to be thrown out, and business leaders ought to seize the opportunities for sustainable growth alongside the communities they serve, making sure that their customers’ descendants are just as well served by them as are their customers.

There are hopeful signs that corporations are picking up where governments have fallen woefully short. The trend can only accelerate: as sustainable businesses become increasingly profitable, businesses would increasingly switch their processes to sustainable ones.

References

1)     https://www.firstpost.com/tech/science/indias-water-crisis-bengaluru-delhi-chennai-hyderabad-among-21-cities-to-run-out-of-groundwater-by-2020-4590221.html

2)  https://www.incorp.asia/learn/why-sustainability-reporting-is-important-for-businesses-in-singapore/

3)     https://www.accenture.com/_acnmedia/accenture/redesign-assets/dotcom/documents/global/1/accenture-corporate-citizenship-report-2018.pdf

4)     https://www.mondelezinternational.com/~/media/MondelezCorporate/uploads/downloads/2018_Impact_Progress_Report.pdf

5)     https://www.eco-business.com/opinion/sustainable-cities-the-changing-role-of-businesses/

6)     https://www.cisco.com/c/en/us/solutions/industries/smart-connected-communities.html

7)     https://hbr.org/2013/07/building-sustainable-cities

8)    https://www.weforum.org/agenda/2018/10/india-is-building-a-green-high-tech-city-amaravati/

9)    https://edition.cnn.com/style/article/amaravati-india-sustainable-city/index.html

10) https://wri-india.org/our-work/project/sustainable-cities

11)https://www.wwfindia.org/about_wwf/reducing_footprint/cce/our_work/low_carbon_development_framework/sustainable_cities/

12) https://yourstory.com/2016/09/sustainable-cities

13) https://sebgroup.com/press/news/sustainability-in-india-challenges-and-chances

14) https://www.bcg.com/en-in/capabilities/sustainability/default.aspx

15) https://www.aboutamazon.com/sustainability

Authors:

Aditya S Kashyap

Chandrashekar T Ram

Deepthisree Chunduri

Furqan Arab

Mallika Jain

Preksha Gupta

Group 3, Section C, PGDM (BM) 2019-21 Batch