The breadth of this definition has spawned many distinct interpretations of how society can (or must) adapt its behaviors and practices to enable continued growth and prosperity. There is, however, widespread agreement that sustainable development or sustainability reflects three inter-related dimensions: environmental quality; social equity; and economic prosperity. There also is general consensus around the idea that a reasonable balance among the three dimensions is a prerequisite to maintaining an organization, community, economy, or nation that is viable in the long term.
The term “sustainability” is in more common use within corporate organizations than sustainable development. This is probably because it is simpler, and is not directly connected to international development or poverty alleviation, which are major concerns to some stakeholders. Sustainability also seems more directly germane to the scale of a single organization, and so is more useful as an organizing principle for internal business or organizational improvement initiatives. We note here that many organizations have chosen to use different but related terms for what might be considered sustainability programs or initiatives. These include, most prominently, corporate responsibility, social responsibility, or corporate social responsibility. We understand why many organizations, particularly large corporations, have chosen such terminology. Nonetheless, we believe that it is self-limiting in that it tells only half the story. Sustainability is about both fulfilling one’s responsibilities (e.g., behaving ethically, minimizing adverse environmental impacts) and capturing opportunities to improve efficiency, effectiveness, customer satisfaction, growth, resilience, and profitability.
Moreover, a large and growing body of evidence demonstrates that well-targeted investments in improved environmental, social, and governance performance generate very healthy financial returns. That is, they more than pay for themselves, creating “win-win” outcomes. Numerous published studies examining the impact of such investments on corporate financial success demonstrate that more sustainable companies have the following attributes relative to their peers:
· Higher return on assets and equity
· Lower systematic risk, hence lower cost of equity capital
· Higher credit ratings, hence lower borrowing costs
· Higher intangible asset value, and
· Better stock price and total returns over time.
These findings demonstrate that there is a very strong business case for pursuing sustainability improvements, albeit in a disciplined, quantitatively based manner.
We believe that these principles can and should be applied in organizations of all types and sizes. These range from large corporations and public agencies, to small and medium-sized businesses, local government agencies, houses of worship, museums, apartment buildings, and even individual households.
As small business owners ourselves, we understand that time, attention, and money are in limited supply and must be used wisely. For that reason, we apply a disciplined, financially-based approach to the work that we do, and are committed to delivering value in every engagement that we take on. Improving the sustainability of your organization is to your benefit and that of your employees, customers, and community. We can help you find the source(s) of value and leverage it/them to control risks, improve efficiency, lower costs, boost morale, enhance resilience, and put your organization on a more solid financial footing. Contact us for a complimentary consultation.
[1] The Brundtland Commission (named after its Chair), was formed by the United Nations in a 1983 resolution.