What is sustainability?
Sustainability is the ability to meet our needs in the present without compromising the ability of future generations to meet their own needs.
Historically, the concept of sustainability is linked to the struggle for social justice, conservationism, internationalism, and other movements of the past. In the late 20th century, these ideas culminated in the so-called "sustainable development".
Today, it is a key issue for the competitiveness of companies, increasingly important for their short, medium and long term strategies.
- Why? Because it is a growing demand from its various stakeholders - customers, investors, regulators, and employees - and because it contributes to its operational efficiency, risk management, and positive differentiation from competitors among other stakeholders.
The rapid depletion of natural resources, the impacts that human activity has on ecosystems and the biosphere, the high levels of social inequality and poverty that we face, and the lack of corporate management ethics are the enemies of a sustainable development model, capable of assuring future generations the opportunities and quality of life that current generations (still) enjoy.
In 1983, the United Nations invited former Norwegian Prime Minister Gro Harlem Brundtland to head the new World Commission on Environment and Development. After decades of efforts to improve living standards through industrialization, many countries were still dealing with extreme poverty and environmental costs were mounting. It was increasingly clear that economic development at the expense of ecological health and social equity would not result in lasting prosperity, i.e. the world needed to find a way to harmonize ecology and social cohesion with economic prosperity.
After four years of work, the so-called "Brundtland Commission" released its final report, "Our Common Future", which warned about the negative environmental consequences of economic development and globalization, and offered solutions to the problems arising from industrialization and population growth. Even though we are currently witnessing an evolution from the concept of sustainable development to that of regenerative development, it is in this report that the definition of sustainable development that is still valid today emerges.
"development that meets the needs of the present without compromising the ability of future generations to meet their own needs, ensuring a balance between economic growth, environmental care, and social well-being.", in Brundtland Report, 1987.
The dimensions of sustainability
Sustainability is a holistic approach that considers environmental, social, and economic dimensions, recognizing that all must be considered together for lasting prosperity:
Environmental dimension: natural resources must be conserved and managed, especially those that are non-renewable or fundamental to life support. To this end, actions should be implemented to minimize negative impacts on air, water and soil, preserve biodiversity, protect and improve the quality of the environment, and promote responsible production and consumption.
Social dimension: human rights and equal opportunities for all individuals in society must be respected. Promoting a more just society, with social inclusion and equitable distribution of goods with a focus on eliminating poverty is imperative. The cultural diversity of local communities must also be recognized and respected, avoiding any form of exploitation.
Economic dimension: refers to prosperity at different levels of society and the efficiency of economic activity, including the viability of organizations and their activities in generating wealth and promoting decent jobs.
Generally, corporate sustainability depends on the three dimensions that make up the ESG factors, that is, on environmental, social and governance factors. This last dimension of governance aims to ensure that companies adopt robust ethical management principles and comply with all legal compliance principles in the way they manage their economic activity and generate their profits.
Sustainability in companies
The concept of sustainable development has thus been taken up by a varied set of organizations: governmental, NGOs, public and private companies, and by society in general. In the case of companies, the growing movement towards corporate sustainability has resulted, in a first phase, in the appearance of new legal requirements that imply financial costs and, later, in the awareness and recognition that the integration of environmental and social aspects in decision-making processes can result in new business opportunities and have a direct impact on the creation of economic value.
Corporate sustainability is thus the ability of a company to manage its activity and create long-term value while creating social and environmental benefits for itsstakeholders.