There is no discussion about it: sustainability means environmental protection. And yet if you ask ten different people what the word sustainability exactly means, you'll probably get ten different answers. The same holds true for the description of sustainability on company websites and in brochures. Everyone is "sustainable" and yet no one does exactly the same thing. What is the actual reason for this? And aren't social and economic activities also sustainable?
The term sustainability originated in forestry where it refers to the principle of only cutting as much wood as can grow back at any given time. Over the past decades, the word has evolved and is frequently used in current discussions. The German dictionary Duden defines sustainability simply as an "impact that lasts for an extended period of time" while the Merriam-Webster explains sustainable as "capable of being sustained" - not very helpful. And that is why it is so tough to define sustainability: An impact on what? And how much time needs to pass in order for something be regarded as sustained?
Organizations like consultancies, NGOs, political parties and trade associations have their own definitions. Things get even more complex when non-English definitions for the word sustainability are added to the mix. In a similar way, the EU introduced the European Green Deal and uses the color green to convey their ambitions to battle climate change and take important steps forward. Here, green is considered synonymous with environment, but is it also synonymous with sustainability? We look at different perspectives and try to find a common definition.
One of the most important findings is the fact that sustainability is subjective - both for people and for companies. For people, the individual definition of sustainability often depends (among others) on age, origin, education and their ideology. While we hardly notice water scarcity in Germany, other parts of the world are frequently troubled by droughts. The same applies to the perception of urgency. Younger generations show their dissatisfaction with movements like Fridays for Future to generate buzz and awareness for the need of sustainable change. For companies, their own industry, supplier and customer relationships, and pressure from legislation are often determining factors in their own assessment of sustainability.
For companies, a materiality analysis (read more in our blog article) is a good start to understand which sustainability dimensions are most relevant to their own activities and external stakeholders. For example, in a purely economic sense, emissions and waste disposal are often more relevant issues than biodiversity. Irrespective, these findings need to be discussed and documented. Responsibility towards stakeholders, for example employees, customers and non-governmental organizations, should be considered in your materiality assessment on sustainable topics. And while the assessment may be subjective, subsequently made decisions often turn into effective measures for more sustainability - or put differently: actions creating a (positive) impact in the long term.
However, there must be limits to the interpretation of sustainability. While there are some standards on the market (eco-labels, certificates, etc.), there is still a lack of harmonization of the individual standards. This can lead to intransparency and confusion for customers and consumers. What is important is credibility, which can only be created by providing verifiable results, transparent information and solid documentation.
In recent years, some companies have used the lack of transparency to put themselves in a more sustainable light than they actually were. This is often referred to as greenwashing and needs to be strictly monitored and even penalized according to many. In every industry, there are black sheep, damaging the trust in the entire field. With this in mind, it is important to set a good example and to prove your company's credibility, competence and long-term commitment towards a more sustainable future. A major part of this is precise and transparent communication, verified with data and (external) auditing. Well drafted sustainability reports, which are already mandatory for larger companies, are a good example of this.
Sustainability is often synonymous with combating climate change, and "green action" is often attributed to environmental protection. But sustainability should be viewed more holistically. A new acronym was made popular and took the legislative and finance world by storm: ESG. The acronym stands for Environmental, Social and Governance. It is so popular as it attempts to capture all aspects of corporate sustainability and responsibility. Aside from environmental measures, social- and governance-driven actions should not be ignored, regardless of what may or may not be more important. A company that makes no profit is just as unsustainable as an organization that puts its employees at risk or fails to provide training.
These are some example of important ESG dimensions:
On a governmental level, some of these criteria have started to be monitored more strictly. Germany, for example, has just passed the Supply Chain Due Diligence Act (in short "Supply Chain Act") in 2021, which requires companies to identify, reduce and prevent risks to human rights and environmental pollution throughout their supply chain. And there is also a lot going on at the EU level as investors, consumers and companies demand more comparability between products and services to make smart, sustainable decisions. One important principle to highlight is the "do no harm" principle that is currently being drafted into EU regulation. It states that in the context of sustainable action towards a specific goal, no harm shall be caused towards another.
There are now a number of frameworks that aim to cover sustainability holistically, including the United Nations Sustainable Development Goals, which we would like to explore next.
Other than just setting standards for sustainable behavior, the United Nations (UN) has concretely defined Sustainable Development Goals (SDGs). For them, sustainability is not only about the action but also about the concrete attainment of goals globally. The Sustainable Development Goals serve as a reference for companies to evaluate internal processes and ideally align them with the targets. Due to the high profile of the SDGs, they also provide a good starting point to establish a sustainable business strategy. There are 17 Sustainable Development Goals as defined by the UN:
Innovative and sustainable companies have a competitive (economic) advantage. To name a few examples, these companies are better at mitigating risks, seize future opportunities, satisfy customer requests, follow new legislation, and attract a talented, purpose-driven workforce. Sustainability has a long-lasting impact (similar to the initial Duden definition above) and yet is subjective, as some components of sustainability may be more relevant than others within a given context. Keeping with the theme, we would like to conclude by stating our own definition: Sustainability consists of environmental, social, and economic activities that have a positive long-term impact on the individual as well as the common good.
Are you looking for support in defining sustainability for your company or anchoring it more deeply within your processes? We would be happy to assist you in identifying the key sustainability areas for your organization and industry. Contact our experts directly or learn more about our Codio Impact platform. With the help of our software solution, we enable you to continuously collect, analyze and process relevant sustainability data - and support you in preparing your company for a more sustainable future. We look forward to joining you on your sustainability journey!
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