What is sustainability is

What is sustainability?

You can also listen to the article:

Sustainability reminds us there’s another way of doing things. We can progress as a society while caring for the environment, seeking social justice and creating economic value. Below, we explain the ins and outs of this revolutionary concept.

What will I learn in this article?

What is sustainability?

Sustainability is concerned with protecting the planet, halting climate change and promoting social development, without endangering life on Earth or leaving anyone behind. This concept seeks to cover our present needs without compromising resources for future generations.

But what does this mean? Well, the aim is to find out how to sustain our way of living over an undetermined period of time. Because, today, our way of living is unsustainable.

“Protecting the planet, halting climate change and promoting social development”

Remember Earth Overshoot Day? That’s the day marking the moment in the year when we have consumed all the natural resources our planet is capable of generating in a year. If we happened to be sustainable, the date would be, at the earliest, 31 December. In 2021, however, we overshot this limit on 29 July.

In other words, as it stands, we need a planet and a half to survive for one year. We consume many more resources than we should do. And this means that, as well as pressurizing the planet’s biodiversity, we generate more waste and emissions. The result? Rising greenhouse gases in the atmosphere, increasing global warming, and greater exposure to the worst effects of climate change.

Where did sustainability begin?

The current concept of sustainability appeared for the first time in the Brundtland Report published in 1987. Also called Our Common Future, the Brundtland Report, published by the United Nations, was the first to warn of the negative environmental consequences of economic development and globalization, and attempted to offer solutions to problems emerging from industrialization and population growth.

Decades later, in 2010, the Millennium Development Goals (MDGs) were agreed at the United Nations Summit of the same name. These represented a roadmap for the reduction of hunger and poverty, as well as improved health, education, living conditions, environmental sustainability and gender equality. Objectives the Member States committed themselves to trying to reach by 2015.

This commitment evolved into the UN’s 2030 Agenda.

Within the UN framework of action to achieve global sustainable development, the 2030 Agenda is an action plan in favor of people, the planet and prosperity, and is also designed to consolidate universal peace and access to justice.

“The 2030 Agenda is an action plan in favor of people, the planet and prosperity”

The program, established by 193 Member States, is based on achieving 17 Sustainable Development Goals, which also include 169 targets covering the economic, social and environmental spheres. Read more about them here.

The 3 pillars of sustainability

This is the path governments, corporations and other institutions are following in an attempt to achieve the sustainability targets. How? By fulfilling, simultaneously, the three essential pillars: environmental protection, social development and economic growth.

Environmental

Sustainability implies assuming that nature and the environment are not an inexhaustible source of recourses, but subject to protection and rational use.

Factors like environmental conservation, a commitment to renewable energy, saving water, incentivizing mobility, sustainable fashion, innovation in construction and sustainable architecture, all contribute to achieving environmental sustainability from various angles. Actions we can undertake in our daily routines, related to the decisions we take for our lives as a whole.

Social

At the social level, sustainability promotes social development, while seeking cohesion among communities and cultures to reach satisfactory levels of quality of life, healthcare and education. The fight for gender equality is another aspect which will determine social sustainability actions over the years to come.

Economic

Thirdly, sustainability also drives economic growth, generating equitable wealth for everyone without harming the environment.

Environmental, social and economic sustainability are, as such, closely related. Many of the challenges humans face, like climate change and water scarcity, can only be resolved at the global level and by promoting sustainable development.

Now you know the ins and outs of sustainability, remember: Act in the present, think of the future.

Find out more about sustainable development and the Global Objectives.

Share on social media

SUBSCRIBE TO OUR NEWSLETTER

. and stay informed with the latest news on innovation.

Información sobre protección de datos

En cumplimiento del Reglamento UE 2016/679 de Protección de Datos y demás normativa vigente en materia de Protección de Datos, se le informa de que sus datos de carácter personal serán tratados por Acciona, S.A. (en adelante, ACCIONA), con los siguientes datos identificativos NIF: A08001851, Dirección: Avenida de Europa, 18, Parque empresarial de la Moraleja, 28108 de Alcobendas (Madrid), Tel: +34 91 663 28 50, email: protecciondedatos@acciona.com, con la finalidad de atender sus comentarios y gestionar sus consultas, solicitudes, reclamaciones o sugerencias, así como el envío, por medios electrónicos, de información sobre nuestros servicios y productos, a través del correo electrónico de contacto.

La base jurídica para el tratamiento de los datos es el consentimiento del usuario al comunicarse con nosotros.

Los datos se conservarán mientras se mantenga la relación y no se solicite su supresión y, en cualquier caso, nunca durante un plazo superior a doce meses.

En caso de que su petición no sea dirigida a ACCIONA, sino a una entidad que forma parte del Grupo Acciona, ésta comunicará los datos a la sociedad del Grupo que pueda atender su solicitud de servicio o información de forma más eficiente. En este sentido, la comunicación de estos datos puede constituir una transferencia internacional, por estar estas empresas ubicadas en países fuera del territorio de la Unión Europea, para poder atender las necesidades de comunicación entre las personas que forman parte del Grupo a nivel mundial. (Puede consultar un listado de empresas del Grupo en www.acciona.com/es/accionistas-inversores/informacion-financiera/cuentas-anuales). La aceptación de los términos de la privacidad supone el consentimiento para la transferencia internacional de sus datos necesaria para la correcta tramitación de su petición. No están previstas otras cesiones de datos, salvo obligación legal.

El interesado puede ejercitar sus derechos de acceso, rectificación, supresión, portabilidad y la limitación u oposición, ante Acciona, S.A. dirigiéndose por escrito al Departamento de Protección de datos sita en Avenida de Europa, 18, 28108 de Alcobendas (Madrid) o mediante el envío de un correo electrónico en la siguiente dirección: protecciondedatos@acciona.com, adjuntando en ambos casos copia del DNI u otro documento identificativo. Asimismo, podrá en cualquier momento, retirar el consentimiento prestado dirigiéndose a la dirección arriba indicada, así como reclamar ante la Autoridad de Control (Agencia Española de Protección de Datos www.aepd.es).

Para más información ponemos a su disposición la Política de Privacidad de la Página.

Sustainability is understood as the development that meets the present needs without compromising the capacities of future generations, ensuring the balance between economic growth, environmental care and social welfare. In Sustainability for all we promote the awareness and difussion of good practices that allow to combine economic and social development with the preservation of natural resources.

Sustainability

What Is Sustainability?

In the broadest sense, sustainability refers to the ability to maintain or support a process continuously over time. In business and policy contexts, sustainability seeks to prevent the depletion of natural or physical resources, so that they will remain available for the long term.

Key Takeaways

How Sustainability Works

Accordingly, sustainable policies emphasize the future effect of any given policy or business practice on humans, ecosystems, and the wider economy. The concept often corresponds to the belief that without major changes to the way the planet is run, it will suffer irreparable damage.

As concerns about anthropogenic climate change, biodiversity loss, and pollution have become more widespread, the world has shifted to embrace sustainable practices and policies, primarily through the implementation of sustainable business practices and increased investments in green technology.

3 Pillars of Sustainability

The idea of sustainability is often broken down into three pillars: economic, environmental, and social—also known informally as profits, planet, and people.

In that breakdown, the concept of «economic sustainability» focuses on conserving the natural resources that provide physical inputs for economic production, including both renewable and exhaustible inputs.

The concept of «environmental sustainability» adds greater emphasis on the life support systems, such as the atmosphere or soil, that must be maintained for economic production or human life to even occur. In contrast, social sustainability focuses on the human effects of economic systems, and the category includes attempts to eradicate poverty and hunger, as well as to combat inequality.

In 1983, the United Nations created the World Commission on Environment and Development to study the connection between ecological health, economic development, and social equity. The commission, then run by former Norwegian prime minister Gro Harlem Brundtland, published a report in 1987 that has become the standard in defining sustainable development.

That report describes sustainable development, or the blueprint for attaining sustainability, as «meeting the needs of the present without compromising the ability of future generations to meet their own needs.»

Corporate Sustainability

In business contexts, sustainability refers to more than just environmentalism. Harvard Business School lists two ways to measure sustainable business practices: the effect a business has on the environment, and the effect a business has on society, with the goal of sustainable practice being to have a positive impact on at least one of those areas.

Corporate sustainability emerged as a component of corporate ethics in response to public concerns of long-term damage caused by a focus on short-term profits.

This view of responsibility encourages businesses to balance long-term benefits with immediate returns, and the goal of pursuing inclusive and environmentally sound objectives. This covers a broad array of possible practices. Cutting emissions, lowering energy usage, sourcing products from fair-trade organizations, and ensuring their physical waste is disposed of properly and with a smaller carbon footprint would qualify as moves toward sustainability.

Companies have also set sustainability goals such as a commitment to zero-waste packaging by a certain year, or to reduce overall emissions by a certain percentage.

Many corporations have made such sustainability promises in recent years. For example, Walmart Stores, Inc. (WMT) has pledged to reach zero emissions by 2040. Morgan Stanley has pledged net-zero «financed emissions» by 2050. Google has pledged to operate carbon-free by 2030.

The push for sustainability is evident in areas such as energy generation as well, where the focus has been on finding new deposits to outpace the drawdown on existing reserves. Some electricity companies, for example, now publicly state goals for energy generation from sustainable sources such as wind, hydropower, and solar.

Because these policies tend to generate public goodwill, some companies have been accused of «greenwashing,» the practice of providing a false impression that makes a business seem more environmentally friendly than it is.

Cost Cutting

Moreover, many companies have been criticized for cost-cutting measures that make it harder to evaluate their sustainability. For example, many companies might move some parts of their business to less-regulated markets, such as by offshoring production to obtain cheaper labor. This can make it harder to assess the costs of production on workers and the environment.

Sustainability practices «significantly affect» the offshoring activities of multinational corporations, according to an examination of data from 1,080 multinational corporations.

Challenges Surrounding Business Sustainability

The switch to sustainability can be difficult. The Santa Fe Institute outlines three major impediments for firms seeking to improve their environmental impacts: First, it is hard to actually understand the impact of any individual firm. Second, it is difficult to rank the environmental impact of some activities, and finally, it is difficult to predict how economic agents respond to changing incentives.

Sustainable investing surveys over the past couple of years have suggested that half (or in some cases, more than half) of investors say that sustainability is «fundamental» to investing strategy.

Not everyone concerned with investments shares the enthusiasm. In July 2021, for instance, Securities and Exchange Commission (SEC) Commissioner Hester Peirce argued that not only would environmental, social, and governance (ESG) disclosure mandates violate the agency’s authority, but it may also «undermine financial and economic stability.»

According to Peirce, the «inherently political» sustainability metrics were «unabashedly» created to direct capital toward certain businesses. In response to public comments and regulatory pressure to look into such mandates, Peirce said that it would be a violation of the SEC’s «historically agnostic approach» to regulations.

Eiji Hirano, a former chairman of the board of visitors for Japan’s Government Pension Investment Fund, has said that there’s a bubble in ESG investing and that the fund needs to rethink its ESG investments, according to interviews with Bloomberg News.

Benefits of Business Sustainability

In addition to the social benefits of improving the environment and elevating human needs, there are also financial benefits for companies that successfully implement sustainability strategies. Using resources sustainability can improve the long-term viability of a business concern, just as cutting waste and pollution can also help a company save money.

For example, using more efficient lighting and plumbing fixtures can help a company save on utility bills, as well as improve its public image. There may also be government tax incentives for companies that adopt certain sustainability practices.

Based on interviews with senior executives across 43 global investing firms, Harvard Business Review has argued that the perception among some business leaders that environmental, social, and governance issues are not mainstream in the investment community is outdated.

While it’s tempting to support companies that seem environmentally friendly, some companies are less sustainable than they seem. This use of misleading advertisements or branding to create a false impression of sustainability is sometimes called «greenwashing.»

Creating a Sustainable Business Strategy

Many corporations are seeking to integrate sustainability practices into their core business models. Companies can adopt sustainability strategies in the same way that they develop their other strategic plans.

The first step to integrating sustainability practices is to identify a specific weakness shortcoming. For example, a company might determine that it generates too much waste, or that its hiring practices are causing harm to the surrounding communities.

Next, the company should determine its goals, and identify the metrics it will use to measure its achievements. A company might set an ambitious target for reducing its carbon footprint, or set a specific percentage goal for diversity hiring. This will allow the company to determine objectively if its goals have been met.

The final step is to implement the strategy and assess its results. This requires continuous re-evaluation, as a company’s goals may change as the company grows.

There are some common pitfalls for companies aiming for sustainability. One of them is the knowledge-action gap: even though many executives set sustainability as one of their core business values, few of them take concrete actions to accomplish sustainability objectives.

Another is known as the compliance-competitiveness gap. While improving sustainability metrics can make a company more competitive in the market, these goals should not be confused with the mandatory compliance requirements that a company must adhere to. While sustainability is desirable, compliance is mandatory.

Real-World Example

An interesting example of a successful sustainability strategy is Unilever, the parent company of Dove soaps, Axe body spray, Ben & Jerry’s Ice Cream, Hellmann’s mayonnaise, and many other familiar brands. In 2010, the company implemented the Unilever Sustainable Living Plan, a ten-year blueprint for reducing the environmental impact of its brands while providing a more fair workplace.

By the end of Unilever Sustainable Living Plan, the company was able to announce major achievements in improving its environmental footprint as well as the company’s bottom line. By working to conserve water and energy, the company was able to save more than 1 billion euros between 2008 and 2018. Moreover, by creating more opportunities for women, Unilever also become the preferred consumer goods employer for graduate students in 50 countries.

What Are the 3 Principles of Sustainability?

The principles of sustainability refer to the three core concepts of environmental, social, and economic sustainability–sometimes broken down as «people, planet, and profits.» This means that in order to be considered sustainable, a business must be able to conserve natural resources, support a healthy community and workforce, and earn enough revenue to remain financially viable for the long-term.

What Activities Promote Sustainability?

Many sustainable businesses seek to reduce their environmental footprint by using renewable energy or by reducing waste. Companies may also be more sustainable by promoting diversity and fairness in their workforce, or enacting policies that benefit the local community.

What Is Economic Sustainability?

Economic sustainability refers to a company’s ability to continue its operations over a long-term horizon. In order to be economically sustainable, a company must be able to ensure that it will have adequate resources, workers, and consumers for its products into the distant future.

What Are the Most Sustainable Companies?

There are many different ways to measure and compare sustainable companies. Canadian research firm Corporate Knights publishes a list of the 100 most sustainable companies. The list is topped by the Danish companies Vestas Wind Systems and Chr Hansen Holding, Autodesk Inc., in the United States, Schneider Electric in France, and City Developments in Singapore.

What Products Are Not Sustainable?

Non-sustainable products uses resources that cannot be replaced or replenished at the same speed that they are consumed. Products that rely on fossil fuels cannot be sustainable, because the resources used to make them can never be replaced. Other resources such as as rainforest timber, fishery stocks, sea corals, and other wildlife can be sustainable, if they are only harvested be limits that allow existing stocks to be replenished.

The Bottom Line

As consumers become more environmentally conscious, more companies and businesses are finding ways to reduce their impacts upon the planet and their community. Sustainability practices allow companies to highlight their social benefits while continuing to attract customers.

Sustainability – What Is It? Definition, Principles and Examples

Last modified on 18 th June 2021

What is sustainability? What does it mean? What are the principles and pillars behind sustainability? What examples of sustainability are there in areas like technology, agriculture, the workplace, business, or transportation? How is sustainability connected with supply and demand? Find the answers to these and further questions right below.

What Is Sustainability?

There is no universally agreed definition of sustainability. In fact, there are many different viewpoints on this concept and on how it can be achieved.

Etymologically, the word sustainability comes from sustainable + ity. And sustainable is, for instance, a composition of sustain + able. So if we start from the beginning, to means “give support to”, “to hold up”, “to bear” or to “keep up”.

What is sustainability, then? Sustainable is an adjective for something that is able to be sustained, i.e, something that is “bearable” and “capable of being continued at a certain level”. In the end, sustainability can perhaps be seen as the process(es) by which something is kept at a certain level.

Nonetheless, nowadays, because of the environmental and social problems societies around the world are facing, sustainability has been increasingly used in a specific way. Nowadays, sustainability is usually defined as the processes and actions through which humankind avoids the depletion of natural resources, in order to keep an ecological balance that doesn’t allow the quality of life of modern societies to decrease.

In this way, the term “sustainability” has been broadly applied to characterize improvements in areas like natural resources overexploitation, manufacturing operations (its energy use and polluting subproducts), the linear consumption of products, the direction of investments, citizen lifestyle, consumer purchasing behaviours, technological developments or business and general institutional changes. As long as an action causes little, less, or no harm to the natural world – under the belief (not always ensured) ecosystems will keep on operating and generating the conditions that allow for the quality of life of today’s modern societies not to decrease – someone is often claimed to be sustainable.

Daniel Christian Wahl, author of Designing Regenerative Cultures, defends sustainability refers to sustaining the underlying pattern of health, resilience, and adaptability that maintain this planet in a condition where life as a whole can flourish (more about regenerative cultures at the bottom of this piece). And that for this to be possible in the long term, the way modern societies organized shouldn’t be sustained, but rather re-designed using a regenerative perspective (more about the regenerative movement ahead).

Definition of Sustainability and Sustainable Development: What’s the Difference?

The views on sustainability seem to have a stronger focus on the present moment and on keeping things above a certain level. By its turn, sustainable development focuses more on a long-term vision. In fact, sustainable development has a universally agreed definition that was first written in the Brundtland Report (aka Our Common Future), written in 1987.

That’s why an agenda for 2030 with 17 sustainable goals (SDGs) was adopted by the UN members in NY in 2015. Among them are goals such as ending poverty and hunger, ensuring good health and well-being for all, providing quality education or achieving gender equality.

Principles of Sustainability: the 3 Pillars of Sustainability

What is sustainability? The principles of sustainability are the foundations of what this concept represents. Therefore, sustainability is made up of three pillars: the economy, society, and the environment. These principles are also informally used as profit, people and planet.

John Elkington, author of Cannibals with forks and co-founder of the sustainability consultancy firm SustainAbility and Volans (a think tank to help solve the world’s wicked problems), was one of the first people to integrate these 3 principles. He argued companies should start considering this triple bottom line so that they could thrive in the long run (more info about the triple bottom line in our article: sustainable development).

Also known as the grandfather of sustainability, Elkington’s most recent book (2020) Greens Swans: Regenerative Capitalism addresses precisely the need to re-design businesses and the economy, and the opportunities and risks the absence of such change might bring on the short run.

At the same time, consumers and citizens unsatisfied with the long-term damage (both on wealth distribution and on the environment) caused by corporate short-sighted focus on short-term profits, have turned sustainability into a mainstream concept able to ruin a company’s reputation and profits if unaddressed. Today, sustainability is often spoken of with regard to climate change, which threatens life as we know it as is being largely caused by industrial practices. That’s one of the reasons why today many companies have corporate responsibility (CSR) strategies.

Coronavirus and Sustainability: Bad For Climate and the Environment?

Some news channels are sharing the positive effects the new coronavirus outbreak is having on the environment and climate. However, unfortunately, coronavirus is likely bad news for ecology in the long-term because it is tied to a dysfunctional economic system. We explain why, here.

Coronavirus And Being Sustainable At Home

From Sustainability to Regeneration

While sustainability is certainly a trendier concept, there’s another one that’s quickly gaining ground: regeneration. Regeneration takes sustainability even further, acknowledging modern societies’ lifestyles don’t have to be sustained for generations to come.

First, because the structures that allow such conditions are incompatible with the way Nature creates Life (they are economy-oriented, which is often opposed to being nature-oriented). But also because humans have damaged the planet to such an extent that stopping to do harm wouldn’t be enough to recover ecosystems are the percentage of biodiversity to keep them running – we need to enhance and facilitate the conditions in which Life can flourish and ecosystems can recover and become resilient.

The Regenesis Group speaks of Regenerative Development as working to reverse the degeneration of ecosystems through harmonizing human activities with the continuing evolution of life on our planet. Under the premise, we humans are part of Nature and that our relationships, institutions, and processes should be more like Her – Gaia Education has many physical and online training programs available.

Examples of Sustainability: A Long-Term Vision

Sustainability encourages people, politicians, and businesses to make decisions betting on the long term and taking future generations into account. In this way, acting sustainably encompasses a temporal framework of decades (instead of a few months or years) and considers more than the profit or loss involved in the short run. A couple of different examples of sustainability depending on the industry can be found right ahead:

Technology: Examples of What Is Sustainability In Technology

The use of electronic devices is growing every day. Nonetheless, these devices are made of Earth minerals extracted by the mining industry. Mining can be a very polluting industry and the development of new sites certainly has an impact on deforestation.

Therefore, being sustainable in the tech field has a lot to do with using your devices for a long period – so if you want to be sustainable resist you must resist switching your smartphone every other year! It is also about making sure you get disposed of them in a responsible way as can be very polluting if not handled properly.

Soon, sustainability in technology will also be about how the (mostly) lithium-ion batteries of electric cars and solar panels will be disposed of. Companies focusing on recycling these batteries and building products whose core car be maintained and replaced for a new battery will also be the ones at the forefront.

Fashion: Examples of Sustainability In Fashion

Fashion, especially fast fashion, focuses on speed and low cost to frequently deliver new collections. Nonetheless, the problem with this industry its negative environmental impact. On one hand, fast-growing cotton generally requires the use of industrial, toxic chemicals (pesticides and fertilizers) that often causes soil pollution and depletion and water eutrophication.

On the other hand, there’s a lot of textile waste and many clothes are made of synthetic fibers which, while being washed, escape to the ocean as microplastics. In this way, if a company makes clothes with resistant materials, uses sustainably produced cotton, applies circular economy principles across its value chain and uses less toxic chemicals: it is being responsible with the environment. These would be an example of sustainability within the fashion industry.

At the same time, sustainability is also about being socially responsible. And overall, the fashion industry isn’t a very responsible one. If you pay attention most labels show that clothes are being made in distant places such as China, Bangladesh or Vietnam. There are many documentaries about this issue.

Apart from the pollution of transporting these items, the manpower behind the manufacturing of these clothes is what’s most worrying. People in these countries (often women and children) usually get really low wages and work under bad conditions. They can hardly improve their social situation and most times keep on working just to pay the bills and survive. This largely contributes to the inequality we see in the world since in 2018 the rich went richer and the poor poorer, according to an Oxfam report.

Transportation: What Is Sustainability In Transportation?

A report from the IPPC says 14% of all greenhouse gas emissions come from transport and most are mostly due to passenger cars. Yes, contrary to what many believe, planes, cargo ships or even trucks aren’t the main contributors to CO2 emissions and are cars can assume much of the blame. So unless someone is driving a car with 4 or 5 passengers, taking public transportation, especially trains but also buses, are more sustainable choices. And if one can simply walk or cycle it’d be even better.

Today, there are even more sophisticated solutions to reduce the pollution caused by moving around. At a vehicle level, the popularity and industry development of alternatives like electric cars (or even hydrogen cars) or electric scooters are growing at a high rate. At the same time, solutions like carpooling, where through which drivers can get their cars empty and save some money (and pollution) are great alternatives. Not to mention the fact that more companies are letting their employees working from home or remotely, allowing them to save polluting kilometers.

Zero Waste As An Example Of Sustainability

The zero-waste movement is a lifestyle that encourages people to use all types of resources in a circular way, just like the natural world does. Therefore, the ultimate goal of this philosophy is to avoid resources to follow a linear route and end up as trash in the oceans or landfills. For this, people must refuse what they don’t need, reduce what they’re getting, reuse it and recycle or compost it.

Linked with this lifestyle is also a minimalist way of living, where people are often invited to leave behind and refuse what they don’t need. The movement is also very well known by people taking their own bulks to shops to buy commodities such as chickpeas, rice, or liquid soap. The goal is clear: not to take any trash home. And so is the enemy: plastic.

Food and Agriculture: Examples of Sustainability In the Food Sector

A company that tries to grow its crops by not using (or using few) toxic pesticides, focusing instead on organic farming and biomimicry practices is certainly a less polluting one. If it pays fair wages to its employees and manages to still be competitive on the market, it is then being responsible when it comes to profit, people and planet.

Workplace: Examples of Sustainability at the Workplace

Workplaces can also be organized in sustainable ways. For instance, companies betting on new technologies, becoming paperless or providing conditions and training for employees to recycle are being careful about waste management.

At the same time, not asking air-conditioners for very extreme temperatures (that waste much more energy waste and emit GHGs), opening the blinds when there’s sunlight and avoiding plastic cutlery are also good ways to have a sustainable workplace. But there’s nothing like having a sustainability mindset right at the heart of an organization’s core operations and creating a sustainability strategy that measures impacts and creates mitigation solutions.

Operations and Value-Chains: Where’s the Sustainability?

Let’s analyze sustainability in operations by imagining a company with very high energy costs as they are steel manufacturers. If it is economically viable, the company could install solar panels and power its operations with this energy. It’d be a medium-long term investment that would most likely be economically attractive in the long run. At the same time, the company would be using renewable energy, which is especially important in places where the electricity grid works mostly on fossil fuels. The raw materials used, how they are sourced and from where, whether products are designed with eco-design principles in mind or distribution optimization are also areas with for room for improvement when it comes to sustainability.

A Company’s Strategy (CSR): Where Is Its Sustainability?

A company’s corporate social responsibility (CSR) is a strategy that integrates the policies and practices firms wanting to create value on their triple bottom line (people, planet, profit). So besides taking care of their workplaces and trying to be eco-friendly along their value-chain, companies with a sustainability mindset are also concerned about social issues like gender equality, happiness at the workplace or taking care of the communities affected by their activities.

At the same time, they don’t underestimate the financial side of the business, where profit is a basic condition for organizations to survive – yet, it’s not the main reason or the main purpose why these businesses exist.

Sustainable Cities: What Does It Mean To Be a Sustainable City?

Sustainable cities can be considered as cities that have strong social, economic and environmental performances. They have good scores when it comes to air pollution, availability of public transportation, the number of educated and employed people, the percentage of green spaces, energy consumption, or access to drinking water.

Presumably, sustainable cities are to be better prepared to face the challenges of urban areas as society develops and as climate change events get more frequent and intense. They are more resilient and adapted to unforeseen circumstances. The most reputable forum regarding sustainable and green cities is the C40 network.

Waste Management: Is There Sustainability In Waste Management?

The Connection Between Supply, Demand, and Sustainability

Supply and demand. Demand and supply. We often see these two concepts together and it’s not hard to think about their connection to sustainability and sustainable development. Supply and demand are economic forces of the free market that control what suppliers are willing to manufacture and what consumers are willing to purchase.

Specifically, supply means how much of a certain product, commodity or service suppliers are willing to “give” or produce at a certain price. And demand refers to how much of this product or service consumers are willing to purchase at a particular price.

The relationship between demand and supply carries the forces behind the allocation of resources. According to market economy theories, demand and supply theory will allocate resources in the most efficient way. The connection between this theory and sustainability is that nowadays we’re going over Earth’s biocapacity because we’re “demanding too much”.

This demand is happening not only because the population is increasing. It is also due to the appealing equilibrium price which is, among other things, influenced by a lowed by mass production.

At the same time, sustainability is also often spoken in terms of the supply chain. In this case, it means companies should be concerned about the sustainability of their suppliers’ processes.

Ecosystems’ Sustainability: What Is It?

The sustainability of ecosystems is about keeping the ecological services working. This means an ecosystem’s footprint cannot exceed its biocapacity. But what is biocapacity?

Biocapacity Definition: What Is Biocapacity?

The definition of biocapacity, according to WWF, is “the capacity of ecosystems to produce useful biological materials and to absorb waste materials generated by humans, using current management schemes and extraction technologies.”

Also, according to the Global Footprint Network, biocapacity can change because of climate and depending on which ecosystem services are considered useful inputs to be used in the human economy. Also, according to the National Footprint Accounts, “the biocapacity of an area is calculated by multiplying the actual physical area by the yield factor and the appropriate equivalence factor. Biocapacity is usually expressed in global hectares”.

Sustainability Isn’t Enough: We Need To Regenerate

Bill Reed defends sustainability is being used as a concept that tries to reduce the damage caused by excessive natural resource use – and that this is not enough. “Instead of doing less damage to the environment, it is necessary to learn how one can participate with the environment by using the health of ecological systems as a basis for design” – he declares.

In Daniel Wahl’s book Designing Regenerative Cultures, he claims why we should avoid the expression “ecosystem services” and use instead “ecosystem functions”. Wahl says the first puts nature at the service of humanity, who is meant to control it for its own pleasure and needs. Rather, he explains we are part of Nature, not separate or higher than it. We need to pay more attention to systemic relationships and interactions, to aim to support the resilience and health of the whole system, to foster diversity and redundancies at multiple scales, and to facilitate positive emergence through paying attention to the quality of connections and information flows in the system” – the German biologist defends.

The process of designing this regenerative world starts by spending time understanding how the systems of life work in each unique place and observing many different natural variables behind complex ecosystems. Learning from the natural design (biomimicry), asking many questions before rushing to find solutions to enhance life, and having the precautionary principle in mind are also part of Wahl’s regenerative vision.

What Is Sustainability?

Sustainability in Investing Explained

Carlina Teteris/Getty Images

At the core of sustainability is the idea that everything we need for our survival depends on our natural environment. Sustainable practices allow us to maintain conditions that provide for the support of both present and future generations. The ultimate goal of sustainability is to meet our needs now without jeopardizing the ability of future generations to meet their needs.

Sustainable investing, specifically, means investing in companies that follow sustainable practices in their business activities. Sometimes, the kind of accounting framework used is referred to as the “triple bottom line,” meaning a company’s financial decisions include a focus on people, profits, and the planet.

This article will address the broader meaning of sustainability; related terms such as environmental, social, and governance (ESG) investing; and ways you can invest in sustainability.

What Is Sustainability?

Sustainability can be defined as the integration of environmental health, social equity, and economic vitality to create thriving, healthy, diverse, and resilient communities for present and future generations.

A lack of standard terminology means the terms for sustainability are sometimes used interchangeably in practice or have slightly different meanings, depending on who is using them. 

How Sustainable Investing Works

Sustainable investing began with choosing which companies to invest in—or not invest in— through the use of screening criteria based on the company’s industry or its sustainability practices.

Some early examples of such criteria included avoidance of tobacco companies, weapons makers, or companies that committed human rights violations like apartheid. Today, ESG investors employ many more criteria that they may also use as positive screens for company practices that investors hope to reward or enhance, such as:

Investors choosing a more active approach may also file shareholder resolutions with the firms whose shares they own, encouraging the share issuers to follow sustainable practices or discouraging unsustainable ones.

Why Sustainability Is an Important Factor for Investors

If sustainability in general is important to you, then sustainable investing means you can align your investments with your values by buying securities of companies that follow business practices informed by ESG principles.

That doesn’t mean you have to give up investment performance, though. Several studies have shown that sustainable mutual funds generally perform in line with comparable funds not composed of stocks that are highly rated for sustainability factors. The Morgan Stanley Institute for Sustainable Investing found, for example, that from 2004 to 2018, sustainable funds performed essentially the same as comparable traditional funds, but with 20% less downside deviation.

Incorporating sustainability into your portfolio could provide further diversification benefits because these investments are selected using different criteria than traditional investments.

Types of Sustainability

Sustainability is a broad term, but it can be assessed at companies by using ESG criteria. These factors are often measured using a variety of information sources.

As an example, independent investment research firm Morningstar Inc. determines a company’s ESG rating by analyzing the company’s risks with its own system of measuring a company’s exposure to material ESG risks, then gauging how likely those risks are to occur. ESG rating firms may use their own indicators, or evaluate information from outside sources such as governmental regulatory agencies, news reports, and data contained in the company’s financial disclosures.

Environmental

Environmental sustainability relates to the company’s practices regarding its use of or interaction with natural resources, clean technology, or impact on climate change.

Social

Social elements of sustainability can involve workplace safety practices, labor relations, diversity, community development, or human rights, among other topics.

Governance

The governance aspect of sustainability may include consideration of the company’s board independence and diversity, its anti-corruption policies, and political contributions made by the firm, along with other benchmarks.

To build a mutual fund that invests with a sustainability lens, these criteria are applied as either a positive or negative screen. A positive, or affirmative, screen works by actively seeking companies to include based on the desired criteria. A negative, or exclusionary, screen removes investments in companies that use undesired practices or that are involved in business activities that do not align with a fund’s values.

Investing sustainably may mean using one or a combination of any of these and other criteria.

Sustainable Investing Options

If you don’t want to screen for suitable individual sustainable stocks to invest in yourself, there are mutual funds and ETFs that invest based on sustainability data as well. By investing in a mutual fund or ETF that uses sustainability criteria to accomplish its investment objective, you commit money to sustainability without having to analyze and track each stock yourself, saving yourself considerable time.

One example of a sustainable ETF is the iShares Global Clean Energy ETF.   This fund invests in securities that comprise the S&P Global Clean Energy Index, which is made up of companies that are involved in clean energy production, or clean energy equipment and technology.

Another example of a sustainable ETF is the iShares ESG Aware US Aggregate Bond ETF, which tracks an index of bond issuers evaluated based on ESG factors. 

You also can investigate whether your employer’s 401(k) or your IRAs have ESG investment options, and reallocate some or all of your retirement savings there.

Pros and Cons of Sustainable Investing

Aligns your investments with your values

Increases portfolio diversification

Takes time and money to evaluate

Companies may be deceptive about how sustainable their practices really are.

Pros Explained

Aligns your investments with your values: Sustainable investing allows you to invest in a way that aligns with your own values on the environment, social impact, and company governance. It may also help you avoid investing in companies whose business practices don’t line up with your principles.

Increases portfolio diversification: The ESG approach can provide diversification to your portfolio by including assets selected using different factors than are employed in traditional portfolio construction.

Cons Explained

Takes time and money to evaluate: Screening potential investments based on sustainability criteria takes additional time, and can be costly for individual investors. While the volume of ESG data disclosed by and compiled on companies has increased significantly in the last few years, it’s often only available by subscription. However, you can offload much of that research to a fund manager by investing in a mutual fund or ETF.

Companies may be deceptive about how sustainable their practices really are: Because of the popularity of sustainability with consumers, companies may spend considerable time and effort promoting themselves as good practitioners of it, conduct known as “greenwashing,” even if that isn’t really the case.

Sustainability Series: What is sustainability and why is it important?

Sustainability is becoming increasingly visible in all areas of our lives, from investors such as Larry Fink at Blackrock stating that they’ll sell shares in the worst corporate polluters in a bid to support the goal of net-zero carbon dioxide emissions by 2050[1] to the uproar against the practices of many fast fashion brands.
But what does sustainability mean, and why is it important?

Often misunderstood, sustainability is regularly considered to only refer to energy sustainability and reducing carbon emissions.

However, sustainability is more than just a buzzword and it’s more than just environmentalism.

While protection of the environment is part of sustainability, that’s not where sustainability ends. The concept of sustainability also covers economic development and social equity.

Adopting sustainable practices, large and small, has the potential to make a huge impact on the environment, society, and the economy. The end goal is a world where every human has access to basic resources, we use resources at a manageable rate, so as not to run out of them, and maintain economic development. Over the years, this idea of sustainability has been referred to as ‘People, Profit, Planet’, or the ‘Triple Bottom Line’ emphasizing the fact that all three types of sustainability are important.

In this sustainability series, we’ll be looking into sustainability across different industries, exploring supply chains and discussing how sustainability has the potential to benefit everyone.

First, we’re taking a look into what sustainability is and why sustainability is important.

Defining Sustainability – What is Sustainability?

If you’re wondering “what does sustainability mean?”, you’re not the only one. As discussed above, many people only consider the environmental aspects of sustainability and neglect the social and economic aspects.

While the idea of sustainability is not new, there have been, and continue to be, many definitions and ideas on sustainability and sustainable development.
The Brundtland definition of sustainability which arose from the World Commission on Environment and Development (WCED), 1987 is a sustainability definition that’s widely accepted.

The Brundtland Commission’s definition for sustainability puts the meaning of sustainable development and sustainability, as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.[2]”

This means thinking about the kind of future we’re leaving for the next generation and ensuring that the way we’re living now can be continued in the future.

The three pillars of sustainability

The three pillars of sustainability (or principles of sustainability); society, economy, environment are explored in more detail below and help explain the idea of sustainable living.

Social sustainability

Social sustainability is what many people think of when they think of “sustainable development”. This pillar of sustainability refers to ensuring that everyone has access to necessities such as clean, water, adequate food, healthcare, shelter, and human rights.

Social sustainability also means making sure that workers aren’t exploited or discriminated against. These aspects play a big role in sustainable supply chains where workers are sometimes mistreated in a company’s effort to maximize their profit.

Economic sustainability

If the other two principles of sustainability are familiar, this third one may not be. Economic sustainability, it as important as the others, but is often the one that sparks the most debate.

While economic sustainability is built into the UN goals, some believe that sustainability comes at the expense of the economy and jobs.

However, the definition of economic sustainability is “practices that support long-term economic growth without negatively impacting social, environmental and cultural aspects of the community.[3]” This goes to show that economic growth is built into sustainability and isn’t against it.

It’s not just about economic performance today, but the ability for future generations to perform well economically too and that can’t be achieved if sustainability overall is lacking.

Furthermore, recent studies have shown that it is possible to grow the economy while simultaneously reducing carbon emissions. In California, the state has grown its GDP by almost 60% while reducing its emissions to keep them below 1990 levels all while seeing a growth in population. The U.K. has also reduced emissions by 29% over the past decade while growing its economy by 20%.

Environmental sustainability

The aspect of sustainability that most people are familiar with, environmental sustainability, means making sure we don’t overuse natural resources to the point where we run out of them or destroy the environment. Put another way, it’s about the sustainable management of natural resources.

Most would agree that the way we currently use natural resources is not sustainable. Changes in this area would help protect global ecosystems and biodiversity, help ensure clean water and air and reduce our greenhouse gas emissions.

The UN’s Sustainable Development Goals (UN SDGs)

The UN SDGs break down the above three pillars of sustainability into 17 sustainability goals (SDG 17).[4] The current goals were agreed on in 2015 with the aim of meeting each goal by 2030.

These goals cover the social, economic, and environmental aspects of sustainability, further demonstrating that sustainability isn’t only about the environment.

Why is sustainability important?

Our current lifestyles, particularly those enjoyed by most in Canada, cannot be sustained forever.

There’s a limit to the number of resources we can extract and the products we can consume before it has an impact on our quality of life and on the Earth itself.
We’re already seeing the effects of not living sustainably. People are experiencing water shortages or poor water quality, once fertile land can no longer grow food[5] without mass fertilization which runs off the land and contributes further to poor water quality, and we’re experiencing more extreme weather conditions leading to flooding, droughts and other weather events in increasing numbers across the world.

Incorporating sustainability into every aspect of life means working to reduce these damaging effects; something everyone stands to benefit from.

Examples of Sustainability in Action

Sustainable actions can be big or small. At home, you may start reusing plastic containers or buying fewer plastic items all together to reduce your consumption of this hard to recycle material.

Businesses may introduce energy-efficient appliances into their workplace, ensure lights and devices are switched off while manufacturers are looking into how to reduce their waste and energy consumption whether through the production processes or by creating eco-friendly packaging. This is leading to sustainable innovations and many sustainable technologies have been created as people work together to create green initiatives.

There’s also a growing call from consumers and governments to make sure that workers are being paid a fair wage and have good working conditions, both of which are sustainable actions.

Fashion sustainability, sustainability in agriculture and the concept of green buildings are just some industries where there is huge room for improvement.
On a larger scale, sustainability initiatives such as the Rainforest Alliance and Fair Trade encourage environmentally-friendly farming practices while also ensuring farmers receive a decent living wage.

Throughout this series, we’ll be taking a look at some industries in more detail, exploring the new sustainability initiatives that they’re taking and innovative technologies that have been created as we work together to create a more sustainable future for the next generations.