Being ethical is essentially about accepting our interdependence with each other and taking the other's needs into consideration before acting. In the corporate world, it is reflected in the principles of sustainability, which recognise that business has economic, social and environmental impacts that shape the quality of life for individuals inside and outside the corporation, and that the ethical choice is to ensure these impacts are positive.

The World Commission on Environment and Development (the Brundtland Commission) introduced the concept of sustainable development in 1987, defining it as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

Corporations embracing the concept of sustainable development recognise that they have the ability to enhance society by the way they choose to operate, and are willing to be accountable to a wider set of responsibilities beyond the bottom line.

The original spirit of capitalism was to design an economic system that would enable societies to develop and evolve socially. The hope was that as human beings we could move beyond security and survival instincts to higher order values that would enable us to transcend our egos, and to recognise our collective interdependencies. That personal growth as well as economic progress would be facilitated.

The free market's implicit promise was that it would deliver freedom, equality and justice and lay the foundations from which civil and democratic societies might emerge. The vision was of providing a corrective mechanism where all would have the opportunity to rise from the inequality of birth and seek a better life for themselves and their families. Regrettably, the public backlash against the globalisation of business can be seen partly as a response to the perceived failure of the free marketplace to deliver on this promise. To date capitalism has failed to provide a giant leap in our social evolution. Instead, according to the World Bank, for the almost 5 billion people who now live under market economies (as opposed to only 1 billion a decade ago) one third are unable to access clean drinking water, more than a billion live on less than $2 a day, 450 million women suffer from malnutrition and 125 million children are unable to attend primary school. At the same time the net worth of the world's 358 richest billionaires equals the combined income of the poorest 45 percent of the world's population.

It is easy to forget that we live in a society not an economy; that the economic market is a social invention designed to serve society and enhance its well-being. In The End of History Francis Fukuyama suggested that the end of communism signalled new challenges in the development of capitalist philosophy. He argued that without an external foe, capitalism would enter a new and dangerous period where its critics would come from within. The removal of the external foe - communism - can be seen as our best opportunity to seek to evolve both socially and economically. We can now give our undivided attention to ensuring the market economy delivers on its promise. The philosophy of sustainable development has created a platform on which principles-based capitalism can emerge as the only sustainable way forward.

While the mechanics of business continue to evolve and develop, under the banner of sustainable development, progressive new business leaders are already accepting the challenge of championing a parallel evolution of values and attitudes to guide their relationships with civil society. These new leaders are prepared to accept responsibility for the business' role in co-creating our social as well as economic well-being. They are proving that it is possible to enhance society without compromising profitability. At the business level these new values are manifested in the emergence of voluntary global standards guiding manufacturing, sourcing, employing and environmental accountabilities around the world. At the shareholder level, new values are reflected in the rise of shareholder activism demanding improved corporate governance accountabilities. At the institutional investor level, new values underpin the rapid rise of the ethical investment movement and in the high streets it can be mapped in the values-driven consumer purchasing patterns.

Fukuyama also points to the need to move beyond individualism and seek to build trust and recognition of our interdependence as the appropriate basis for a virtual economy. In choosing to create the future we want, to shape our societies as well as economies, we need new philosophies, new values and new responses at every turn. What has been missing until now was a clear vision that ingrains and reinforces the concepts of business ethics in the collective psyche. The philosophy of sustainability provides such a vision. This approach will ensure business is truly signed up to the goal of enhancing societies and raising the ethical floor below the global marketplace.

If "doing" and "having" were key social change drivers in the last century, "being" and "becoming" can be the new frontiers of exploration for the 21st century. We have everything to gain from stepping back and reassessing who we are today and who we might become in the future. Already we have a new consciousness around protecting our green environment. Expanding our focus to include our social well-being and spiritual growth recognises the unspoken part of the social contract and honours the original spirit of capitalism. Commitment to sustainable development may well ensure that the free market delivers on its promise.

Attracta Lagan heads up KPMG's Ethic & Sustainability Business Services. Email:

This article first appeared in Environment South Australia, Vol 8 No 3 - May 2001. The whole or part of this journal may be reproduced without permission provided that acknowledgement is made and provided the reproducer agrees to provide gratis a right of reply in the publication or medium in which the reproduction was published or broadcast, and in a form similar to the reproduction should the Conservation Council of SA or its agents desire to make such a reply. Views expressed in this publication are not necessarily those of the Conservationn Council of South Australia. Non-sexist and non-racist language is a policy of Environment South Australia.