Would you like to invest your money? Get in touch with an expert:
Sustainability embodies the capacity to uphold or bolster a process continually. Within economics and politics, the focus of sustainability revolves around averting the exhaustion of natural or physical resources, ensuring their enduring accessibility. At its core, sustainability signifies satisfying our current needs without compromising the capability of future generations to fulfill their own. Amid growing worries about climate change caused by humans, loss of biodiversity, and environmental pollution, the world is shifting toward using more sustainable ways of doing things. This includes businesses being more environmentally friendly and investing more in green technologies.
Beyond natural resources, we also require social and economic resources. Sustainability encompasses not only the environment but also social justice and economic development. Most definitions of sustainability include considerations of social equity and economic advancement. In sustainable policymaking, for instance, emphasis is placed on the future impacts of a particular policy or business practice on people, ecosystems, and the economy as a whole.
Principles of sustainability revolve around three core concepts: ecological, social, and economic sustainability. A business can be deemed sustainable only if it conserves natural resources, supports a healthy community and workforce, and generates sufficient revenue to survive economically in the long term.
Ecological Sustainability
Environmental conservation is the most commonly discussed element. Ecological sustainability requires protecting the environment, including natural resources like water, energy, and other raw materials. This involves reducing the carbon footprint, water consumption, non-biodegradable packaging, and wasteful processes within a supply chain. The goal is to avoid damage to ecosystems and promote biodiversity.
Economic Sustainability
Economic sustainability describes an economic system that is not solely profit-oriented but is aimed at ensuring a high quality of life for present and future generations. Economic sustainability considers the social and environmental consequences of economic activities. To be economically sustainable, a company must ensure that it will have sufficient resources, labor, and customers for its products well into the future.
Social Sustainability
Universal human rights and basic needs are accessible to all individuals who have access to sufficient resources to keep their families and communities healthy and safe. In other words, social sustainability ensures the coverage of basic needs and equality of opportunity. Everyone should have access to all resources. Presently, social sustainability still addresses gender equality, for instance.
In 2012, the United Nations Conference on Sustainable Development convened to discuss and develop a set of goals to work toward. These stemmed from the Millennium Development Goals (MDGs), which promised success in reducing global poverty while acknowledging that much more remained to be done. The Sustainable Development Goals (SDGs) ultimately comprised a list of points that, among others, included:
- Ending poverty and hunger
- Improving educational and health standards, particularly in relation to water quality and better sanitation facilities
- Gender equality
- Sustainable economic growth while promoting jobs and stronger economies
- All these while combating the effects of climate change, environmental pollution, and other environmental factors that can and do affect the health, livelihoods, and lives of people
- Sustainability encompasses the health of land, air, and sea
In summary, the concept recognized that nature holds certain rights, that humans bear responsibility for the world, and that it's essential to prioritize people in addressing the aforementioned global issues through environmental and consumption management (e.g., reducing packaging and avoiding food waste, promoting the use of recyclable materials).
In the business context, sustainability isn't solely about environmental protection. Harvard Business School identifies two ways to measure sustainable business practices: a company's impact on the environment and its impact on society. The goal of sustainable practices is to positively influence at least one of these areas.
This understanding of responsibility encourages companies to find a balance between long-term and immediate benefits, pursuing comprehensive and environmentally friendly objectives. It encompasses a wide range of potential practices. Steps toward sustainability include reducing emissions, decreasing energy consumption, procuring fair-trade products, and ensuring proper waste disposal by reducing carbon dioxide emissions.
Many companies have set sustainability goals. For instance, Roche aims to halve its entire ecological footprint by 2030. Novartis aims to be climate neutral by 2025 and carbon, water, and plastic neutral by 2030. Nestlé also aims to achieve climate neutrality by 2050.
Advantages
In addition to the social benefits arising from improving the environment and enhancing human needs, there are financial benefits for companies that successfully implement sustainability strategies.
- Utilizing sustainable resources can enhance a company's long-term profitability, while waste reduction and environmental mitigation efforts can help a company save money.
- Enhanced brand image through environmental consciousness: Sustainability can bolster a company's appeal. Customers might highly value a company's ethical aspects, potentially being willing to pay more for its products. Conversely, companies with a perceived negative social impact often face declining evaluations.
- Reduced employee turnover due to sustainable working conditions
Disadvantages
- Potential higher production costs: For instance, monitoring conditions abroad can be challenging, leading to the inability to manufacture certain products overseas.
- Increased communication efforts: As higher production costs reflect in prices, customers need to be informed that this increase is due to heightened sustainability principles.
Would you like to invest your money?
Speak to an expert.
Your first appointment is free of charge.
