Carel Mulder – Ince Strategy Director
Why is it that so many companies still think that when reporting on sustainability they are compelled to provide elaborate feedback on the natural environment and their business’ impact on this? And with it then print hundreds of copies of an extensive sustainability report. Is anybody else spotting the irony here? And to top it all, we then add a picture of a green tree, or a green leaf, on the cover of the report, or my favorite, the picture of the two hands holding a budding little plant.
If this is your idea of sustainability, you need to dig deeper! Sustainability is not only about the trees or your company’s impact on its natural surroundings, it is actually about the survival of the company and its ongoing ability to do business, and create value for its stakeholders.
Environmental sustainability obviously plays a crucial role in some companies’ business, some more than others; but the question begs: what about social and economic sustainability? Companies have always been reporting on financial issues, but the focus has shifted requiring a far more balanced overview on, and report of, all the aspects of sustainability.
We hear the words ‘sustainable’ and ‘sustainability’ almost every day, especially when dealing with integrated reports and reporting, and issues of governance. But what does it mean? Is it about nature, people, culture, the environment, the economy, money?
Sustainability is about all of these things and then some. It could be defined as an ability or capacity of something to be maintained or to sustain itself. It’s about taking what we need to live now, without jeopardising the potential for people in the future to meet their needs. It is about the ability to sustain, or the capacity to endure.
From a business perspective, sustainability is about operating within the means of the natural systems (environment) and ensuring that the business’ operations don’t harm other people (society and culture).
Business sustainability is often defined as managing the triple bottom line – sometimes referred to as profits, people and planet – a process by which companies manage their financial, social and environmental risks, obligations and opportunities. Sustainability is about understanding the interconnections among economy, society, and environment
A more robust description is that business sustainability represents resilience over time; businesses that can survive distress because they are intimately connected to healthy economic, social and environmental systems. These businesses create economic value and contribute to healthy ecosystems and strong communities.
Corporate sustainability is a business principle taking into consideration every dimension of how a business operates in the social, natural, and economic environment. It also formulates strategies to build a company that cultivates longevity through transparency and good governance principles, to create value over time.
To achieve this, businesses need to innovate and to execute, meeting market needs swiftly, effectively and on a global scale. Companies will need new ways of doing business and do this in a way that meets the needs of the present without compromising the ability of future generations to meet their own needs. The successful businesses of tomorrow will be those that create value both inside and outside the company.
This will mean managing for the long-term as well as the short-term; developing strategies that balance competition and cooperation, providing operations, products and services that meet social and environmental needs, developing business models that are able to stand the test of time and incorporating the real costs of environmental and social resources.
Sustainability for tomorrow’s enduring businesses will be about making money by meeting real and fundamental human and environmental needs.
Factual aspects sourced from Wikipedia.
In the next article: The application (the “how”) of sustainability