Definition of Sustainability: A to Z Guide on Sustainability
There are many definitions of sustainability derived by different organisations, expressed in various words based on their perspectives, understanding and experiences. However, all these versions point to a common objective: making planet Earth a better place for everyone to thrive and lead a happy and prosperous life without exploiting natural resources, instead using them judiciously.
For instance, the UN World Commission on Environment and Development defines the term sustainability, what it means, as: "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Check out our definitions and interpretations of various sustainability topics here.
Another example is the definition provided in the charter for the UCLA Sustainability Committee: “The integration of environmental health, social equity and economic vitality in order to create thriving, healthy, diverse and resilient communities for this generation and generations to come. The practice of sustainability recognizes how these issues are interconnected and requires a systems approach and an acknowledgement of complexity.”
Sustainability Definition or Meaning or Concepts
In a broad sense, the term sustainability means considering the impact of our actions—whether as individuals, businesses, or other entities—on future generations. It means weighing the pros and cons of our choices and ensuring the well-being of present and future generations.
From a business perspective, sustainability means not using up natural and physical resources so they are available for all types of businesses to use in the future. In return, this contributes to the overall environmental, social and economic development of stakeholders – nature, society and governments. This is what businesses call corporate sustainability.
"Global energy-related CO2 emissions grew by 0.9%, or 321 Mt, in 2022, reaching a new high of over 36.8 Gt" according to the International Energy Agency. So companies have a bigger role to play in protecting the natural environment and in sustainable development, as they are the main source of greenhouse gas (GHG) emissions to the atmosphere through their activities such as transportation and electricity generation.
Read more: What are the Benefits of Sustainable Development?
What should Businesses do for Sustainability?
Many companies have realised that their non-sustainable business policies can negatively impact, among other things, human lives, economic resources, biodiversity and the wider economy. As concerns about biodiversity loss, climate change, and ecological imbalance surge, they have begun to acknowledge the importance of sustainable practices and embark on a journey towards achieving them—but watch out for greenwashing attempts. For example, ESG reporting is a manifestation of this shift.
To achieve environmental sustainability, companies should switch to renewable energy or renewable energy sources like wind and solar, for their daily operations. They should also increase sustainable investing and integrate sustainable practices into company policies, including energy efficiency, waste reduction, water conservation, human well being, employee engagement and environmental protection.
What is Sustainable Investing?
Investing is the process of spending money to acquire assets or items to generate income through their appreciation over a certain period of time. Investors in this regard focused on two main factors: Risk and Reward, in their investment strategy.
However, today, majority of the investors recognise the growing importance of environmental, social, and governance (ESG) factors in their investment decisions and processes, as these factors turn into real economic factors in the long term.
Hence, sustainable investment refers to investment decisions and processes that focus on three factors: Risk, Reward, and ESG.
Sustainable investment strategies include ESG integration, impact investing, thematic investing, stewardship, and screening.
Read more: What is CSR? Corporate Social Responsibility Meaning, Types, and Benefits
What are the Three Sustainability Pillars?
Sustainability pillars are classified into three types:
Environmental Sustainability
Environmental sustainability means choices we make that protect natural resources. This includes the food we eat, the clothes we wear and the transportation we use. Using renewable energy, like solar and wind power, is key to reducing our carbon footprint. Integrated water resources management, which 80% of countries are implementing, helps reduce pollution, conserve resources and mitigate climate change.
Social Equity
Social sustainability is the concept of identifying and managing the impacts of a business on employees, local communities, workers in supply chains, and customers. It includes diversity and inclusion, women’s empowerment, fair labour laws, education and healthcare, community development, safe working conditions and work-life balance.
This approach benefits people of all walks of life. Social justice is also key to equal access to resources and opportunities. Developing countries have many challenges in achieving social sustainability, especially in areas like education, poverty and social justice.
Economic Development
Economic sustainability means creating jobs, growing the economy and increasing productivity that lasts. Sustainable businesses and responsible investments save natural and financial resources for the long term. Efficient production and supply chains reduce food waste and improve food security, minimise environmental impact and preserve resources for future generations.
Key Challenges for Business Sustainability
Many organisations and their senior leadership teams are ready for a sustainable shift, but the hard part is transitioning from ambition to execution. Businesses often struggle and become unsuccessful in this transition process.
Following are some of the big challenges that thwart companies from achieving a sustainable transformation:
Lack of Plan
It is common to see businesses targeting ambitious sustainability plans, such as net-zero goals, which is great and commendable. However, there is a tendency for them to focus only on the end result and lack a detailed plan for how to reach it. After all these announcements, if they fail to achieve the goals, it can erode the trust of stakeholders and can have huge implications.
Huge Investments
Sustainability is a large-scale transformation that requires major investments in acquiring new technology and organised implementation efforts. The impact of these investments is difficult to quantify, as the sustainability initiatives spread over several business units and functions, from manufacturing to distribution. This is one of the main challenges that holds companies back in this transformation.
Tackling Scope 3 emissions
These are emissions that companies are not directly responsible for. They include emissions from a company's supply chain and are not produced directly by the company. Strong collaboration across the entire value chain is essential to curb this problem. However, many businesses struggle with managing Scope 3 emissions, which often leads to the exclusion of this emission category in sustainability reporting.
Inconsistent Reporting Standards
Sustainability reporting metrics and standards are evolving year after year, as a result, businesses tend to focus more on their scores than on adopting a comprehensive sustainability strategy, as the pressure to report their sustainability performance mounts. This increases confusion and prompts them to rush their reporting just to satisfy regulatory requirements.
Read more: How Can An ESG Reporting & Rating Framework Help Investors Achieve Their Financial Goals?
Despite all these, companies must act now. There is value at stake in meeting new customer demands, accessing capital and managing risk. Many examples of climate solutions and mitigation efforts show how companies are working to achieve their sustainability goals.
How to Overcome Business Sustainability Challenges
The world has to deal with myriad global issues today, from climate change and inequality to social and economic imbalance. Gone are the days when sustainability was seen as an option; now investors, employees, governments, and other stakeholders insist that companies reduce their environmental footprint and give due importance to sustainability efforts.
Businesses of all sizes can become more sustainable by following the strategies below.
Understand Business Goals
Clearly defining and setting goals, and what you want to achieve from the beginning, will help build your relationship with sustainability.
Grow your customer base by getting aligned with sustainability.
Be seen as a green business with environmental accountability.
Attract eco-conscious customers and boost your brand.
Boost your brand through sustainability initiatives.
Promote net-zero in your marketing.
Meet investor ESG demands.
Meet emerging environmental regulations and standards.
Get employees involved in sustainability and create a green business.
Grow and operate your business more sustainably.
Identify Difficulties
Now that you have your business goals, you might be thinking about how you will achieve them while aligning your business with sustainability. A lot of businesses grapple with: where to begin; obtaining the resources or data; limited funds or sustainability expertise; understanding the technical side of a sustainability strategy and carbon footprint; balancing sustainability spending with the budget; carbon footprint offsetting; the complexity of the carbon credit market and project verification; and stakeholder expectations for quick wins.
Address Business Needs
To overcome these difficulties, you need to think about your business needs and what resources or tools will help you overcome these challenges. Examples of business needs are:
Simple tools to calculate and track carbon emissions.
Expert partners to advise on carbon footprint measurement, offsetting and reduction.
Guidance on developing and implementing a bespoke sustainability strategy.
Reliable data and reports to back business strategies and decision making.
Visible reporting of your environmental impact.
Custom pricing for carbon footprint measurement and carbon reduction.
Trusted partners with high quality, verified carbon products like carbon credits.
Marketing materials to promote your sustainability.
Quick fixes for current business impacts.
These are basics that every business needs to evaluate and consider, before they set their foot on sustainability journeys.
Benefits or Importance of Sustainability in Business
There are plenty of benefits businesses can gain by incorporating sustainability into their models and policies. Sustainability is important for the following reasons:
Sustaining Natural Capital
Natural capital refers to everything that nature provides humans to produce goods and services. It includes natural assets such as geology, soil, air, water, and all living things. A sustainable business model values and protects these resources and reduces environmental impacts to sustain and maintain them for present and future generations to use.
Cost Reduction
Sustainability can reduce costs and manage financial resources effectively. For example, installing solar panels on building rooftops can substantially reduce electricity charges and pollution. This will allow you to allocate the budget to core aspects of running a business more smoothly while also benefiting the environment.
Stakeholder Relation
A business can only survive with strong support from its stakeholders. Studies show that gaps in consensus between executives and stakeholders weaken the link between sustainability and profitability. By strengthening their "Sustainability DNA," leadership teams can improve engagement with stakeholders while creating economic value and positive environmental and social impacts.
ESG Risk Management
ESG risk management can make or break a business, well, it is true, as operating with integrity has become the new norm. By incorporating sustainability into a company's operations, it can monitor and act quickly to avoid ESG risks. For instance, responsible supply chain management can help avert or reduce risks related to human and environmental violations.
Young Talents
Young people, particularly Gen Z, are more concerned about climate change and sustainability. They want to work with companies that align with their values. So, to attract these talents to your business, sustainability is paramount. When employees are happy and feel valued, their productivity increases, contributing to the overall economic growth of the organisation.
Recap
For businesses to remain competitive in their respective markets, continuous sustainability efforts are a must for their long term viability. The changing business landscape is demanding them so much like never before, as a result of temperature rise and climate change.
For businesses, integrating sustainability not only contributes to environmental preservation but also improves brand reputation, attracts eco-conscious customers, and meets regulatory requirements.
The definition of sustainability is simple, but the journey towards it might be complex, with challenges like investment demands and emissions management on the rise, only detailed planning and a real commitment to sustainable development goals can lead to meaningful results. Eventually, the benefits—ranging from cost savings and risk management to stronger stakeholder relations and talent attraction—spotlight the value of embedding sustainability into core business strategies.
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