What is Sustainability?
Sustainability is the ability of people, businesses and governments to conduct activities in a way that does not undermine the ability of future generations to conduct the same activities.
Sustainability is defined as the capacity to endure. In ecology, the word describes how biological systems remain diverse and productive over time. For humans it is the potential for long-term maintenance of well-being, which in turn depends on the well-being of the natural world and the responsible use of natural resources.
In a world of increasingly scarce resources, where the ecology is under increasing stress from human activity, and the collective effect of this activity is actually impacting our climate, sustainability is a term that we will hear with increasing frequency.
For businesses, sustainability presents both challenges as well as an incredible opportunity.
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The sustainability challenges for business comes in the form of increasing prices for raw materials and expanding legislation regulating the environmental impact of business activity. As Cap and Trade regimes and Carbon taxes are introduced, emission behavior moves from an environmental concern to a bottom-line financial risk that needs to be effectively managed.
Alternatively, sustainability presents businesses an incredible opportunities to reduce costs, reduce compliance risk, improve reputation, introduce efficiency into the organization, create competitive advantage as well as act as a catalyst for product and business process innovation. |
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As businesses begin to address the challenges and opportunities of sustainability, one goal should be at the root of their efforts - moving the business towards a Sustainable Business Model (SBM). A Sustainable Business Model is one in which companies attempt to lessen and eventually negate any negative impacts on the environment or society resulting from their business activities.
While negating a companies impact won't happen immediately, certain principals should be central to the evaluation of business activities. A company should try to minimize business inputs (or source more environmentally friendly options), use these resources in an efficient manner (minimizing waste), and produce products and services that have less impact on the environment and society (easily recyclable products or services delivered using less travel or resources). |
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Sustainable business practices have quickly moved from the realm of environmentalism to the main-stream. There was a time when introducing environmentally friendly practices would almost always increase operating costs. In today's business environment, the complete opposite is generally true. In fact, the sustainability efforts most companies will do first will generally be ones that result in reduced costs and increased efficiency. |
Below is a description of some of the most important issues driving sustainability.
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Cost
A natural result of most sustainability initiatives will be a reduction in costs. Looking for ways to reduce consumption (raw materials, energy), increasing the efficiency and effectiveness of business practices, and exploring new and innovative product and services will all result in operational performance.
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Compliance
Compliance risk is an increasing challenge facing organizations. The number and complexity of international, national and regional regulations that address the environmental impact of product, services and business activities is increasing. Companies can expose themselves to considerable risk by not effectively managing these issues. |
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Reputation Risk
Reputation Risk can be defined as any action, event or situation that could adversely or beneficially impact an organization's reputation. Regulatory noncompliance, unethical behavior and perception of green washing all represent ways in which an organization can negatively impact their reputation. Behind financial and litigation risk, reputation risk in the global marketplace represents the greatest risk to an organizations long-term success. |
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Competitive Advantage
Sustainable practices can provide an organization significant competitive advantages in the form of reputation, lower costs, better compliance, greater levels of innovation and many others.
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Innovation
One of the most important benefits of beginning sustainability activities is innovation. At the core of the process of moving towards a Sustainable Business Model, organizations needs to take a fresh look at how they conduct business, what is going into their products, and how do their products effect the environment and society once they are sold. |
Top 10 Environmental Issues Facing Companies
These are the top 10 environmental issues facing humanity (as defined in Green to Gold, Daniel C Esty):
Climate Change - This catch-all includes rising sea levels, changes in rainfall patterns, more severe droughts and floods, harsher hurricanes and other windstorms, and new pathways for disease.
Energy. For big energy users, resource and energy productivity may become a major point of strategic advantage.
Water - Companies around the world now face real limits on access to water. A rising population and growing economies are putting substantial stress on resources. Pollution is increasingly a concern.
Biodiversity and Land Use - Biodiversity preserves our food chain and the ecosystems on which all life depends. A key factor in the decline of biodiversity is habitat loss. Many companies face pressure about their contribution to sprawl.
Chemicals, Toxins, and Heavy Metals - Part of what makes air pollution - and all forms of pollution - more dangerous is the presence of toxic elements. The legal liability surrounding toxins can turn out to be virtually unlimited.
Air Pollution - Significant air-quality controls on factories, cars and other emissions sources have radically reduced air pollution levels over the past 30 years in the United States, Japan and Europe. But the air is still not clean in many places.
Waste Management - The EPA estimates that the 1,200 Superfund sites across the United States will require about $200 billion to clean up over the next 30 years. Under the liability provisions of the Superfund law, anyone found responsible for the waste at a site can be held liable for the full cost of cleanup, even if the toxins were disposed of legally.
Ozone Layer Depletion - With a thinned ozone layer, the world becomes a more dangerous place, with reduced agricultural productivity, higher risk of skin cancer and other health problems.
Oceans and Fisheries - More than 75 percent of the world’s fisheries are over-exploited and beyond sustainability. For those whose livelihoods depend on fishing, recreation and tourism, the effect of declining fisheries may be severe.
Deforestation - Every company that uses wood, paper or even cardboard packaging has some stake in, and responsibility for, the state of our forests. |
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