Sustainability

Sustainability is most often defined as meeting the needs of the present without compromising the ability of future generations to meet theirs.

Sustainability has three main pillars: economic, environmental, and social. These three pillars are informally referred to as people, planet and profits.

A growing number of organisations are integrating sustainability into their business strategy—realising they can do well by doing good.

What does sustainability mean in business?

In business, sustainability refers to doing business without negatively impacting the environment, community, or society as a whole.

Sustainability in business generally addresses two main categories:

1. The effect business has on the environment
2. The effect business has on society

The goal of a sustainable business strategy is to make a positive impact on at least one of those areas. When companies fail to assume responsibility, the opposite can happen, leading to issues like environmental degradation, inequality, and social injustice.

Sustainable businesses consider a wide array of environmental, economic, and social factors when making businesses decisions. These organisations monitor the impact of their operations to ensure that their short-term profits don’t turn into long-term liabilities.

Many successful organisations participate in sustainable business practices, however, no two strategies are exactly the same.

Sustainable business strategies are unique to each organisation as they tie into larger business goals and organisational values. Below are a few examples of what sustainability in business can look like.

• Using sustainable materials in the manufacturing process
• Optimising supply chain to reduce greenhouse gas emissions
• Relying on renewable energy sources to power facilities
• Sponsoring education funds for youth in the local community

Why is sustainability important?

Beyond helping curb global challenges, sustainability can drive business success. Several investors today use environmental, social, and governance (ESG) metrics to analyse an organisation’s ethical impact and sustainability practices. Investors look at factors such as a company’s carbon footprint, water usage, community development efforts, and board diversity.

Research shows that companies with high ESG ratings have a lower cost of debt and equity, and that sustainability initiatives can help improve financial performance while fostering public support. 

The overlap between social and environmental progress and financial gain is called the shared value opportunity. In other words, 'doing good' can have a direct impact on your company’s ability to 'do well'.

We are seeing huge growth in ESG opportunities as businesses of all shapes and sizes want to not only transition to net zero but also want to ensure that they are creating a culture and paradigm that factors in culture, diversity, equality and inclusion.

Within the Sustainability team we are focused on helping our clients by providing advice in the following areas:

• Circular economy projects
• ESG strategy development
• SBTi
• Streamlined Energy & Carbon Reporting
• UN 17 goals of sustainable development
• Carbon trading
• Social value reporting

ESG Factors

There is no one exhaustive list of ESG examples. ESG factors are often interlinked, and it can be challenging to classify an ESG issue as only an environmental, social, or governance issue, as the table below shows.

These ESG factors can often be measured (e.g., what the employee turnover for a company is), but it can be difficult to assign them a monetary value (e.g. what the cost of employee turnover for a company is).