Sustainability in business is a pretty hot topic. 15 years ago, few universities were offering academic degrees in sustainability or sustainable business. Today, such degrees are commonplace.
“Sustainability” has recently joined the ranks of other abstract concepts that just about every modern business is compelled to list as one of its core values – regardless of whether or not the organization actually practices it. Unfortunately, this fuzziness has contributed to an environment where it’s hard to know what sustainability really means. So, let’s discuss.
What Is Sustainability in Business?
Most people associate “sustainability in business” with terms like “green” and “eco-friendly.” There is some logic to these associations, but lets zoom out for a second and ask, what is sustainability in business? We define sustainability in business as:
“commercial systems that rely on environmentally and socially responsible practices in order to allow for
continued responsible operation into the future.“
This last dimension is where the root word “sustain” is really on display. Sustainability isn’t just an affection for the living world. It comes from an acknowledgement that any business entity affects and is affected by its environment.
Sustainability issues in business are not limited to the environment. Yes, it’s true that sustainability in business tends to be associated with environmental sustainability in business (more on that below). But the concept is much broader. It includes other concepts such as societal and economic sustainability. If a business pays employees so little that, over time, employees’ lives stagnate or even deteriorate, that is not sustainable.
Environmental Sustainability in Business
As was stated earlier, most people associate the concept of sustainability with environmental sustainability in business. The two concepts are related, yet distinct.
That said, climate change, biodiversity collapse, and the ensuing consequences is something that could effect every business in the future. These environmental consequences are at least in part, the product of human industry. Even by its own logic, the capitalist system can no longer afford to ignore its own consequences on the environment.
Forced migration, crop failure, and disrupted supply chains all work against the incentives of the capitalist system. Healing our economic system’s relationship with the environment will ensure flourishing into the future. Business owners must be proactive agents of change.
Market leaders who have been doing business in an unsustainable way may have the means to change, but it may be costly in the short-term. Of course, it’s a worthwhile sacrifice. If the world’s largest corporations don’t change how they engage with the environment, we will all suffer.
But, there is a silver lining: new opportunities to bring more sustainable business practices to market. Consumers will embrace alternative business practices that are more sustainable. As awareness of sustainability has grown in the general public, interest and favor for companies who are actually doing something positive increases.
Sustainability in Business Examples
Let’s look at some examples of sustainability in business.
Let’s say you manufacture a snack product that uses palm kernel oil as one of its ingredients. Like many other manufacturers, you rely on palm kernel oil sourced from forests in New Guinea. However, your distributors extract the oil by clear cutting forests that are some of the richest sources of biodiversity on earth. Further, your investment fuels massive social inequalities. Some people in a region are becoming very wealthy, while others are getting kicked off their land.
Not only have you harmed the biological, social, and economic environment – you have also harmed your ability to source palm kernel oil in the future. This is an unsustainable practice.
A more sustainable way of sourcing the palm kernel oil would begin with a deep study of the most ecologically sustainable ways of growing and extracting it. This would likely involve more long-term investment in healthy forestry practices. It has been demonstrated that a healthy cultivation of biodiversity actually produces more crops with more resilience than clear-cutting and mono-species agriculture. Further, sustainable sourcing would involve making sure that the social, as well as environmental, operation is conducted ethically and equitably, which will ensure health & resilience in both the workforce & supply chain into the future.
Arguments Against Sustainability in Business
When you see the true scale of devastation to be suffered as a consequence of climate change, you see that arguments against sustainability in business come from a perspective that values short-term gains.
At its essence, sustainability is about creating practices that can be sustained into the future. To argue against that only makes sense if everyone’s immediate short-term interests are prized above all else.
That said, one argument against sustainability in business – and to emphasize the above – comes from 1980. At that time, forests in the Pacific Northwest were being cut down rapidly to feed the paper industry. Climate change was not yet a widely-recognized issue, but protecting endangered species was. Protecting a particular owl native to that forest was used as the rationale for halting deforestation in the region. Environmentalists were ecstatic.
But for a whole generation of local loggers just about to begin their careers, this was a catastrophe. They had no other training to fall back on. The lucky ones pivoted to careers at places like Wal-Mart, but many jobs were destroyed. While avoiding the destruction of the planet is obviously a winning long-term argument, there can at least be arguments against sustainability in business in the short-term.
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Conclusion
A lack of sustainability in business is not only bad for the public, but it’s also bad publicity for companies. Here’s to change, sustainability, and a brighter future for all.
Additional Resources:
- Circular Supply Chain: A More Sustainable Option?
- Toxic Leadership: 5 Things to Avoid as a Leader
- Leadership: Where Everything Rises and Falls
- Pyramid Principle Applied