Debate on growth vs sustainability 'a waste of time'

In this exclusive interview, Dutch author, former minister and McKinsey & Company partner Pieter Winsemius speaks about the debate on growth versus sustainable development and the need for business and government to have long-term perspectives.

Throughout his illustrious career, Professor Pieter Winsemius has witnessed dramatic changes in both the business and policymaking landscape across the world. The one thing that has remained steadfast, however, is the importance of sustainability in human development, he says. 

Many economists often speak of the trade-off between economic growth and sustainable development, but this “old-fashioned discussion is a waste of time”, he adds.

The former Dutch politician, who was Minister of Housing, Physical Planning and Environment twice – once in the 80s and more recently in 2006-2007 – declares that any business or government that does not understand this is in trouble.

Sustainability simply means being able to satisfy the needs of the present without compromising the future. This has to be the norm, he says. In Europe, sustainability is becoming so ingrained among organizations that “there’s hardly talk of it because it’s business for them”.

Winsemius says that from citizens to capital markets, the world now increasingly expects organizations to operate responsibly, and this will be the leading drive for sustainability.

The former partner of McKinsey & Company has made a career out of developing environmental policies and strategies for both government and business, but he is perhaps more recognised in Singapore for his familiar-sounding name.

His father, Albert Winsemius, was a Dutch economist and trusted advisor of Singapore’s first Prime Minister Lee Kuan Yew, who formulated a landmark 10-year plan that launched Singapore’s economic development in the early years following its attaining self-governance in 1959. 

These days, “people don’t make 10-year plans anymore, the world changes too rapidly,” says Winsemius. Apart from flexible plans, political stability is key to achieving sustainable development. Singapore is a good example of a nation that developed with the environment in mind, not as an after-thought, he adds.

Winsemius, who retired in 2012 and is now a full-time writer, is behind a number of books such as “A Thousand Shades of Green”, which is about environmental management in large companies.

Speaking to Eco-Business in an interview on the sidelines of a leadership conference organised by the Netherlands Embassy and The Business Times in Singapore on Tuesday, he shares his thoughts on the importance of long-term perspectives and the challenge of getting companies to think critically about how sustainability applies to their operations. 

Can you share your thoughts on the development of sustainability in recent years?

I’ve seen the change over the years as leading businesses take on the responsibility of sustainability – there’s hardly talk of it now because it’s business for them. In Europe and elsewhere, companies have taken on the responsibility, especially the top corporations.

In the Netherlands, there’s Unilever, for instance, and it’s normal business for them. They don’t want to be involved in discussions on global warming. We accept it’s fact. It’s normal policy. We shouldn’t wait for governments to force us to do things.

Customers, co-workers and capital markets now expect it - this will be the leading drive for sustainability. If you want to be a top company, your people have to be proud of what you’re doing - you cannot be in conflict with your physical and social environment. Many companies now are not concerned about government action because they are ahead and that’s created a new world order.

Customers, co-workers and capital markets now expect it - this will be the leading drive for sustainability. 

If you want to be a top company, your people have to be proud of what you’re doing - you cannot be in conflict with your physical and social environment.

Many companies now are not concerned about government action because they are ahead and that’s created a new world order.

The Netherlands is known for its leadership in sustainable development and green growth – what’s its secret to this success?

The funny thing is the leading countries always have the biggest problems. Or rather, because they have these problems, they become leaders in it.

For example, with smog, London, Los Angeles, and Mexico City (suffered it and therefore become leaders); similarly, in Taiwan, Japan, they have the strictest regulations on air pollution. In the Netherlands, because we are low-lying, flood prone, and with a dense population, we had to become leaders in solving that.

Also, if you have incidents, such as water or soil pollution from industries that kills your physical environment and its biodiversity, it immediately becomes an issue, the public becomes more aware and this makes a solid base for building civil society.

Have you seen similar success stories in Asia?

Growth usually comes with all kinds of environmental issues and the only country that has escaped that is Singapore. In Europe and America in the past, the sign of smoke was a good thing because that signaled employment. Now of course this isn’t the case as it causes all kinds of environmental issues.

There must be political leadership or countries will fall into the same trap. In China, the development of the economy has been so rapid that the country has not been able to control the traffic in the inner cities, or the industrial activities and the shift in the population from rural to urban areas.

Singapore has the advantage since it doesn’t have rural areas and very early on, the government developed policies to deal with pollution right from the start.

While we’re on Singapore, what do you recall about your father’s time here and his relationship with Lee Kuan Yew? 

They were good friends that trusted and respected each other. They made a plan and implemented it their way. They agreed on most things. I recall there was one disagreement, however, on what to do with the Singapore River. Lee Kuan Yew wanted to clean it up, while my father wanted to cover it up to make it into an underground sewer. Well, we’ve seen what happened (with Singapore River and Marina Bay), I think he was very glad to lose that argument.

They kept in touch through their lives and had very close contact. My sister had quite a few interactions with him and she said he was always very curious about what we thought, such that conversations with him sometimes felt like an examination.

I don’t think you can find another person in the world who’s developed a country in 50 years. When I was working at McKinsey, my father would often ask me for data on Singapore, and we could see that every year, Singapore moved up the business environment index. At one point, it even surpassed the Netherlands.

My father liked the good work ethic of the country. He often warned about the rise of absentism in our country. He said, you cannot become too soft.

What would you say to governments in countries that are still developing - how can they get on the path to sustainable development?

The most important thing is to have stable government. If you don’t have that, forget about development. You must have a predictable situation so businesses know there is a long-term opportunity.

The second thing, is to have an open economy. It is important for businesses to know that if you invest money in, you can get the money out. And lastly, eradicate corruption. Singapore was extremely strong on this.

What has been your father’s influence on your own work?

I was surprised when my father passed away, how many memberships he had in the environmental field that I didn’t know about. He was a policymaker, and when I joined the government, we talked about many things that was very helpful in helping me develop environmental policies. 

He deeply believed in policy-making and the long-term perspective. He was very tough and knew that in policymaking you would get opposition at some stage. And if you have important goals, you can’t waste too much time on the opposition - I learnt this from him.

If you have a strict belief, you have to take the risk. That’s not always appreciated by everybody.

What’s your view about this long-held view that there is a trade off between economic growth and sustainable development?

That is the most old-fashioned discussion. The moment you get into a discussion about trade offs, there is a problem. In the short term, you might face some problems, but sustainability has to be the norm.

Anybody who does not realize this is only going for their own needs - that’s a very short-term perspective. Any corporation or government that thinks like that will run into problems. So I always escape from this discussion. It’s a waste of time.

My father and Lee Kuan Yew were good friends that trusted and respected each other.  

They agreed on most things. I recall there was one disagreement, however, on what to do with the Singapore River.

Lee Kuan Yew wanted to clean it up, while my father wanted to cover it up to make it into an underground sewer. Well, we’ve seen what happened, I think he was very glad to lose that argument.

Do you think that governments will ink a global agreement on climate change in Paris by year-end? The last time they tried to do this in 2009 in Copenhagen, it ended in disaster.

I think there are new movements starting, and if governments do not realize this, the movements will go on without them. See how the internet and Twitter started the Arab Spring. The CEO of Unilever Paul Polman said people can bring down a multinational company in two minutes. That might sound dramatic but society is much more connected than before. And it doesn’t neccessarily need government. Very often, many changes are made without government. 

In Copenhagen in 2009, there was a demonstration of the inability of governments to realize that the world has changed. And if you do not face up to realities, eventually something will happen. The question is, how much time do we have?

We don’t talk about climate change anymore. We’ve accepted the fact. It’s like if your children are ill and you go to one, two, up to 100 doctors and 95 of them says you have to take action, would you follow the advice of the five per cent?

That’s the reality, so we must act, but that’s the inability of the political system. If they are unable to solve the problems, society has to find alternative ways to do it. It’s whether we have enough time.    

 

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