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In the last two years, there has been a tidal wave of companies committing to “sustainability.” They might set net zero carbon goals, diversify their workforce, or move into new, cleaner lines of business. And, this is just the front edge of the wave. The interest in sustainability is likely to grow even more over the next decade, as businesses feel pressure from social movements and environmental challenges.
But corporate sustainability is still confusing to many people. People often ask me: “So, what do you mean by sustainability?” I’m a researcher who has studied this topic for over 20 years and I work closely with companies. Here, I describe what corporate (or business) sustainability means, why it matters, and how to make it part of your business.
What are the principles of sustainability?
Corporate sustainability comes from the concept of “sustainable development.” The World Commission on Environment and Development, a United Nations initiative, defined that concept in 1987. Sustainable development means actions that “meet the needs of present generations without compromising the needs of future generations.”
To contribute to sustainable development, businesses should create wealth to reduce poverty, but do so without harming the natural environment. In this way, businesses help our world today and ensure that future generations can also thrive.
In practice, this means that business must consider three key things in their operations:
Human rights and social justice. Sustainability requires businesses to recognize their impact on the people they employ and the communities around them. This recognition means committing to fair wages, just and ethical treatment, and a clean and safe environment.
For example: The clothing retail industry racked up billions in unpaid bills during COVID-19 because of plummeting prices and unsold garments, leaving millions of garment workers in desperate conditions. Yet, some brands continued to pay suppliers, even though their own incomes had declined steeply.
Natural resource extraction and waste. Businesses often rely on natural resources such as land, water and energy. While many natural resources can renew or “regenerate,” this takes time. Businesses need to respect these cycles, by using natural resources at the speed at which they regenerate.
For example: Companies can reduce their resource extraction by using recycled or repurposed products and make their operations more efficient by reducing waste. In doing so, they contribute to the ‘circular economy.’ Gains can be quick: A vegetable processing plant saved $300,000 by simply capturing beans falling off a processing line.
Short- and long-term thinking. Businesses face intense pressure for immediate profits, but sustainability requires investing in technologies and people for the future, even though financial benefits show up much later. Companies are used to longer-term thinking for capital investments, but a sustainability orientation applies this logic to investments in people and society.