Introduction to Sustainable Business
New to the concept of business sustainability? No problem. We have you covered.
Start by learning what business sustainability means and how it differs from related topics, such as corporate social responsibility, shared value, and the triple bottom line.
Then, learn how to act. Often sustainability action begins within your home organization. But complex issue can require you to collaborate with other organizations or even society more broadly. We’ve compiled resources describing best practices on each of these paths.
What “business sustainability” means
By Tima Bansal, NBS Executive Director and Professor of Strategy, Ivey Business School
The term ‘sustainability’ is grounded in a commonly accepted definition: “development that meets the needs of present generations without compromising the needs of future generations” (WCED, 1987).
This definition emphasizes that business must consider the following in their operations: social equity, short and long term thinking, and trade-offs between using resources now or later. These implications are often overlooked, ignored, or misunderstood.
Why the term ‘sustainability’ is confusing…
I think part of the problem people have is that the word ‘sustainability’ is commonly used in other business contexts, including to describe sustainable competitive advantage and sustained growth.
The other problem is that that the definition— “meet[ing] the needs of present generations without compromising the needs of future generations” — seems unclear and its guidance to companies seems vague and unspecific. What does it mean for a company to assure the prosperity of future generations? Business sustainability seems more like inspiration than aspiration.
…but other concepts aren’t equivalent
People often find it easier to translate business sustainability to corporate social responsibility (CSR), shared value, the triple bottom line, or just managing environmental impacts. But these other concepts differ from sustainability in important ways.
CSR speaks to the corporation’s ethical responsibilities, whereas business sustainability speaks to sustaining systems over the long run. However, what is ethical for one person is not necessarily ethical for another. Some executives feel their firm is acting ethically by abiding with laws; others feel their firm must often go beyond the law’s requirements. For some managers, being responsible requires offering the minimum wage; to others, it means offering the higher living wage.
Furthermore, CSR does not speak to equity across generations.
Shared value argues that companies can generate value for the firm and society simultaneously. Like CSR, it too ignores the importance of time. Creating shared value often takes a long time, but many businesses are unable to see very far into the future.
Sustainability is also distinct from the triple bottom line, which simply requires businesses to consider three ‘bottom lines’ – social, environmental, and financial performance. However, just considering the three bottom lines, does not offer guidance on how to manage those bottom lines or make difficult trade-offs.
Making “sustainability” meaningful for business
“Meeting the needs of present generations without compromising the needs of future generations.” While sustainability’s definition can seem ambiguous, I believe that it offers corporate guidance and a vision of a prosperous future.
It is important to recognize that this definition applies to the entire economy, not to specific organizations. A single organization cannot secure the prosperity of future generations; every single firm consumes resources and generates waste. But collectively, organizations can ensure their wastes become the feedstock for other industrial processes – what is often called the circular economy.
Organizations must consider how their operations fit within the larger industrial ecosystem. If executives see their organization as part of a larger system, then they can see that they must collaborate to create a sustainable system.
How to act on sustainable business
You can think about sustainable business activities as occurring at three levels. We’ve curated our most actionable resources to help you get started at any level.
1. In your organization: Sustainability begins at home. How can you get your house in order?
2. With other organizations: Working with other organizations can increase the impact of your sustainability efforts.
3. With society: Solving sustainability issues will require collaboration by all parts of society, including local communities, non-profits and governments.