Leadership

Sustainability, Defined?

Sorting out what one of the era’s biggest buzz phrases actually means.

By David Hakensen

Businesses everywhere seem to be talking about sustainability.  But what does "sustainability" mean and why do so many companies have a different definition of what constitutes a sustainable organization? 

If you ask five people for their definition of sustainability, you'll likely get five different answers. Some will say sustainability is equivalent to "corporate social responsibility."  Some call it corporate citizenship. Others identify sustainability with the environment, and health and safety because their companies have been tracking their efforts in this area. Still others view it as a part of a broader environmental, social and corporate governance movement. And there are skeptics who view sustainability simply as a company's PR efforts to be "green."

There's no correct answer, but there are some definitions among corporate thought leaders engaged in the discussion of defining sustainability that might demystify it for the rest of us. 

John Elkington, founder of the think tank and research organization SustainAbility, and author of the book Cannibals With Forks:  The Triple Bottom Line of 21st Century Business, has articulated one of the most popular definitions of sustainability, suggesting that it is an "accounting and reporting framework that measures an organization's progress along three lines:  economic prosperity, environmental quality and social justice." Or, said more simply in defining his principle of the Triple Bottom Line, it's about "people, planet and profit." 

The United Nations Brundtland Commission, in its 1987 report Our Common Future, wrote, "sustainable development seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future." 

The decades-long period of flux in terminology isn't surprising to David Rodbourne, vice president at the Center for Ethical Business Cultures at the University of St. Thomas.  "What is meant by any of these terms is often impressed on business by the force of external events, social changes and advocacy groups that have expanded on the idea of ‘what are the responsibilities of business beyond satisfying shareholders?'" 

Our point of view expands the myriad definitions to include some important areas that deserve to be included. Sustainability should be viewed as an umbrella concept that encompasses environmental quality, social justice, business ethics, governance, employee health and safety, diversity and philanthropy.  Looked at this way, it's clear that sustainability becomes an integral part of any company's business strategy. 

How a company manages its three major resources-the "people, planet, profit," as Elkington calls it-provides the basis for receiving society's "permission to operate"; building the "bank of goodwill" for when times are tough and, most important, a strategic approach to sustainability that can have a positive impact on a company's bottom line.

When viewed in this light, sustainability is first and foremost a business strategy. And building that strategy begins with looking closely and thoughtfully at the business, then using what is learned  to operate for long-term success-meeting the company's current needs in ways that help ensure that future generations can meet theirs. 

Rodbourne sees the real value of the sustainability discussion as helping shift thinking and strategy from the short term to a much longer, multi-generational time frame.  "How will the business operate differently if it commits to sustainability and adopts a longer-term perspective? What changes does this require for investments, R&D, products, services, supply and distribution chains, stakeholder relationships and metrics to drive management decisions?" 

As such, sustainability is much more than the footprint a company's operations have today. It's a path to chart for the future that brings together smart, disciplined management of financial resources, responsible use of natural resources and strategic investment in human resources-both within the company and in the communities in which it serves.  

However sustainability is defined, corporate leaders are in agreement that it will continue to be a major force to be reckoned with. In a report late last year based on interviews with 1,500 global corporate executives and managers from a cross-section of companies and industries, the MIT Sloan Management Review found that 92 percent of the respondents said their company was addressing sustainability in some way. However, in the same survey, 70 percent of respondents said that their company had not developed a clear business case for sustainability.  

With that in mind, companies are wise to begin considering a well-thought-out sustainability initiative that embraces some of the focus areas defined here. Such an effort can lead to meaningful, measurable results for a business in the form of significant cost savings, new business opportunities, enhanced brand reputation, higher employment engagement and partnerships that support your goals.