What Is Sustainability?

What Is Sustainability?

Let me start by explaining sustainability in its broadest sense—it's the ability to maintain or support a process continuously over time. When we're talking about business and policy, sustainability means preventing the depletion of natural or physical resources so they stay available for the long haul.

Key Takeaways

You should know that sustainability boils down to maintaining processes over time. It's often split into three core areas: economic, environmental, and social. Plenty of businesses and governments are committing to goals like shrinking their environmental footprints and conserving resources. Some investors are diving into sustainability through 'green investments.' But watch out—skeptics point out 'greenwashing,' where companies mislead the public to appear more eco-friendly than they really are.

How Sustainability Works

Sustainable policies focus on the future impacts of any policy or business practice on people, ecosystems, and the economy as a whole. This ties into the idea that without big changes in how we manage the planet, we'll face irreversible damage. As worries about human-caused climate change, biodiversity loss, and pollution grow, the world is shifting toward sustainable practices, mainly through better business methods and more investment in green tech.

3 Pillars of Sustainability

We often break sustainability into three pillars: economic, environmental, and social—think of them as profits, planet, and people. Economic sustainability is about conserving natural resources that feed into production, whether they're renewable or not. Environmental sustainability stresses keeping life support systems like the atmosphere or soil intact for production and human survival. Social sustainability looks at how economic systems affect people, including efforts to end poverty, hunger, and inequality.

Back in 1983, the United Nations set up the World Commission on Environment and Development to explore links between ecological health, economic growth, and social equity. Led by former Norwegian prime minister Gro Harlem Brundtland, they released a 1987 report that's now the go-to definition of sustainable development. It describes it as meeting today's needs without messing up future generations' ability to meet theirs.

Corporate Sustainability

In business, sustainability goes beyond just the environment. According to sources like Harvard Business School, you measure it by a company's impact on the environment and society, with the aim of positive effects in at least one area. This came about as part of corporate ethics, responding to public worries over long-term damage from chasing short-term profits. It pushes businesses to balance long-term gains with quick returns, pursuing inclusive and eco-sound goals.

This includes things like cutting emissions, using less energy, sourcing from fair-trade groups, and handling waste properly to shrink carbon footprints. Companies set goals, like zero-waste packaging by a set date or slashing emissions by a percentage. Take Walmart—they've pledged zero emissions by 2040. Morgan Stanley aims for net-zero financed emissions by 2050. In energy, the focus is on sustainable sources like wind, hydro, and solar to replace depleting reserves.

These moves build public goodwill, but some companies get called out for greenwashing—faking eco-friendliness.

Cost Cutting

Many companies face criticism for cost-cutting that hides their true sustainability. For instance, offshoring to less-regulated spots for cheap labor makes it tough to gauge impacts on workers and the environment. Studies of 1,080 multinational corporations show sustainability significantly influences offshoring decisions.

Challenges Surrounding Business Sustainability

Switching to sustainability isn't easy. The Santa Fe Institute highlights three big hurdles: it's tough to grasp a single firm's impact, hard to rank environmental effects of activities, and tricky to predict how people respond to new incentives. Recent surveys show over half of investors see sustainability as key to strategy. But not everyone agrees—SEC Commissioner Hester Peirce in 2021 argued ESG mandates overstep authority and could harm financial stability, calling them politically driven. Eiji Hirano from Japan's pension fund has warned of an ESG bubble, urging a rethink.

Benefits of Business Sustainability

Beyond social perks like better environments and meeting human needs, sustainability brings financial wins. It boosts long-term business viability by cutting waste and pollution, saving money. Think efficient lighting or plumbing that lowers bills and boosts image, plus possible tax incentives. It attracts investors too—a 2019 study showed shareholders pay more for ethical firms. Harvard Business Review notes outdated views among leaders; investor commitments have surged, from $6.5 trillion in 2006 to $81.7 trillion in 2018 under Principles for Responsible Investment.

Creating a Sustainable Business Strategy

Many companies are weaving sustainability into their core models, just like other strategies. Start by spotting a weakness, like too much waste or harmful hiring. Then set goals and metrics, like cutting carbon or boosting diversity hires, to track progress objectively. Implement and reassess regularly as the company evolves. Common pitfalls include the knowledge-action gap—execs value sustainability but don't act—and the compliance-competitiveness gap, where sustainability aids competition but isn't the same as required compliance.

Real-World Example

Take Unilever, owner of brands like Dove and Ben & Jerry's. In 2010, they launched the Unilever Sustainable Living Plan, a 10-year strategy to cut environmental impact and improve workplaces. By the end, they'd saved over 1 billion euros on water and energy, and became the top employer choice for graduates in 50 countries by advancing opportunities for women.

What Are the 3 Principles of Sustainability?

These principles cover environmental, social, and economic sustainability—people, planet, profits. A sustainable business conserves resources, supports healthy communities and workers, and stays profitable long-term.

What Activities Promote Sustainability?

Businesses promote it by using renewable energy, cutting waste, fostering workforce diversity, and implementing community-benefiting policies.

What Is Economic Sustainability?

It's a company's ability to keep operating long-term, ensuring resources, workers, and customers for the future.

What Are the Most Sustainable Companies?

Rankings vary, but Corporate Knights lists top ones like Sims Ltd and Brambles Ltd from Australia, Vestas Wind Systems from Denmark, and Taiwan High Speed Rail Corp.

What Products Are Not Sustainable?

Those relying on non-replenishable resources like fossil fuels aren't sustainable. Others, like rainforest timber or fish stocks, can be if harvested within replenishment limits.

The Bottom Line

As consumers get more eco-conscious, businesses are adapting to lessen planetary and community impacts. Sustainability lets them showcase social benefits while keeping customers.