Sustainability: What it Means, and How to Get Started
“Sustainability” has taken on such a range of connotations that even the companies most eager to pursue it can find themselves at a loss as to where to start. In this post, we’ll examine what sustainability means, and how Perspectives can help you make it part of your business strategy.
Sustainability Over the Years
If you’re not entirely sure what’s meant by sustainability, you’ve come by your confusion honestly. The concept of sustainability was at first limited largely to concerns over biodiversity and the environment, and only later came to encompass social and economic factors (Purvis et al., 2019).
The concept of sustainability was first introduced as a subject of international policy at the first UN Conference on the Human Environment in 1972. Since then, its scope has steadily expanded. In 1987, the Brundtland Report, named after the Chair of the World Commission on Environment and Development, proposed sustainable development as a model “that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This ambitious yet common-sense vision has continued to guide policymakers, including those who codified sustainable development through Agenda 21, the Rio Declaration on Environment and Development, and other landmark agreements.
The Three Pillars of Sustainability
Sustainability commonly refers to the conservation of a specific resource: sustainable irrigation, for example, or sustainable forestry. It may be more helpful, though, to think of sustainability as embracing three distinct pillars: environmental, social, and economic. This three-pillar model was first proposed decades ago, but it still merits a quick overview (Barbier, 1987).
Environmental sustainability has retained much of its original scope, referring to the prudent use of natural resources with respect both for the natural systems of which they are a part and for the improvement of human well-being (Dunphy et al., 2000). Social sustainability is typically measured in terms of social equity, and more specifically as a measure of equality of opportunity (Diesendorf, 2000). Economic sustainability seeks to safeguard the prospect of future economic growth against the threats of environmental degradation and the consequences of social inequity.
Each of these three pillars is interconnected, and action is taken with respect to one pillar necessarily affects the other two (Benn et al., 2014). In the words of Milne (1996), “Sustainability requires the subordination of traditional economic criteria to criteria based on social and ecological values.”
What About CSR?
Although corporate sustainability tends to be closely associated with corporate social responsibility, or CSR (Baumgartner, 2006), the latter concept far predates the former. American economist Howard Bowen coined the term “corporate social responsibility” in 1953, defining it as “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.”
We too often consider sustainability and CSR to be one and the same, when we stand to benefit greatly from a careful distinction between the two. The most fundamental difference, and the one that concerns us here, is the means by which each concept measures success. CSR may seek to cultivate better corporate citizens, but it is fundamentally a mechanism for securing long-term competitive advantage (Porter and Kramer, 2006). Corporate sustainability, on the other hand, measures itself against extrinsic factors, including measures of global environmental health (Barbier). A company may, for instance, meet or exceed the carbon emissions limits established by the laws of its host country, thereby honoring its CSR responsibilities, while failing to meet the sustainability mandate of achieving net-zero emissions.
Too many companies congratulate themselves on meeting the (self-defined) mandate of CSR without holding themselves to the more rigorous demands of true economic sustainability. Perspectives believes that this tendency is short-sighted if all too human. We recognize that the first goal of any company remains to maximize profits, and indeed support our clients in pursuit of that goal. But we do so with an eye toward the long-term consequences of how business is done, and the remarkable opportunities available to companies who prepare themselves now for a future marked by environmental uncertainty and increased regulatory pressures.
How We Support Tomorrow’s Corporate Climate Leaders
The global response to climate change depends on the innovation and financial investment of the private sector. Of course, not all private entities take this challenge equally seriously: some are content to pursue short-term gains while ignoring long-term depredations to the environment.
Until recently, this might have posed a dilemma to companies interested in sustainable business practices. Investments in sustainable technologies and practices cost time, effort, and money, after all, and those things can dull a company’s competitive edge, especially when the competition does not feel compelled to do the same.
The tables have decidedly turned. Climate-related regulations such as EU targets for GHG emissions are not the short-lived stuff of bureaucratic fancy: they represent the conditions under which business must be conducted now if we are to pursue business in the future. The less completely we meet those targets as a global society, the tighter the regulatory framework under which we operate stands to become.
There is, in short, a new competitive advantage to be gained from committing to corporate sustainability. In a regulatory environment that stands to incorporate new and mandatory elements on a regular basis, Perspectives helps clients get ahead of the curve and stay there by transitioning to climate-resilient practices while others struggle to adapt.
Change is upon us. Smart companies will adapt, and Perspectives will be there to help them do so. To learn more about how we support the private sector, and how your company can establish profitable sustainability strategies, read on.