“Humanity has the ability to make development sustainable to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs”. This is the official definition of sustainable development, according to the United Nations (UN). But what does it really mean?
Most people associate sustainability with environmental causes. It is also common to identify the relationship between economic growth and natural resources. There is nothing wrong with this interpretation and there is also a historical reason for it, which we will discuss in this post. What we will also discuss below is how the concept of sustainable development got a broader, holistic definition, one that incorporates social issues. Finally, we will present ways in which your business can adapt and prosper in a world where society asks for more transparency and accountability. So, keep reading!
A bit of history
In 1987, a UN document entitled Our Common Future, defined the modern concept of sustainable development. Also known as Brundtland Report – after Gro Harlem Brundtland, the president of the World Commission on Environment and Development (WCED) – the text was written by the WCED after documenting the impressions of government representatives, experts, research institutes, non-governmental organizations, industrialists, and the general public for several years. According to the Brundtland Report, sustainable development is “a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development and institutional change are made consistent with future as well as present needs.” The definition also emphasizes the preservation of natural resources, as “at a minimum, sustainable development must not endanger the natural systems that support life on Earth: the atmosphere, the waters, the soils, and the living beings.”
The focus on the environment remains during the United Nations Conference on Environment and Development (UNCED) held in 1992 in Rio de Janeiro. The Rio de Janeiro Earth Summit brought together representatives from 172 countries to outline actions that would promote sustainable development on a global scale.
The results were compiled in the Agenda 21, a 40- chapter non-binding document highlighting some of the most urgent world problems with an action plan for governments to follow a “commitment on development and environment cooperation”. It is not surprising, therefore, that a direct association has been created between sustainable development and the environment.
Sustainable Development beyond the environment
Climate change and the loss of biodiversity are indeed major challenges to sustainable life on our planet. Nevertheless, the idea behind sustainability requires a holistic approach; that is, one that considers the whole of ecological, social, and economic issues in an interconnected way.
To better understand this concept, let us do an exercise. First, consider the number of resources needed to maintain the world’s population of 7.5 billion people. We are talking about food, water, air, energy, housing, physical space, employment, transportation, etc. Now consider that in the last 60 years, the population has grown quite rapidly, consuming more resources require an earth 70% larger to manage carrying and feeding this amount of people, without time for nature to recover. Following this exponential growth, the population is expected to grow another 1.3 billion, in the next 15 years. This means that cities will need to grow so much that they will have to expand into agricultural areas. Or that the car fleet circulating on the streets should double; that China, for example, should increase meat consumption by 40%. Water demand will increase by 30%, while the demand for food and energy is expected to rise by 50%. This increase in demand will eventually cause prices to rise, which will further impact current populations already living in poverty therefore, increasing inequalities and the social gap between rich and poor. In short, we are not able to pay the price for this growth.
A balance between all resources is nothing less than mandatory if we are aiming for a world that can sustain life.
There are 3 important aspects to consider when talking about a balance between all systems:
1. Changes to one system could have consequences for the other systems.
2. Progress focused exclusively on one system’s goals does not necessarily imply a positive impact on others.
3. A problem that is usually “fixed” within one category is better solved with an all-systems approach.
For example, economic progress does not necessarily mean a positive impact on the environment and society. Likewise, a problem such as cholera is not only related to poverty, but also the lack of infrastructure, degradation of the environment and poor access to information, so it will not be solved by treating the patient.
Sustainability and sustainable development
It is then possible to think of sustainability as a long-term goal, while sustainable development refers to the several steps to achieve it. These steps were outlined by the UN in a new list of goals; one that reflects this more systemic view of sustainable development.
2030 Agenda and the SDGs
The Sustainable Development Goals (SDGs) are part of the UN 2030 Agenda for Sustainable Development. This is a new action plan designed for the years 2015 to 2030, for governments and all interested parties to achieve collaboratively a better and more sustainable future for all. With the SDGs, the UN managed to unify in one set of goals the environmental issues together with the social aims from the Millennium Development Goals, a previous program, which ran from 2000 to 2015.
There are 17 interconnected global goals, each one with its list of targets, but all integrated within 5 main areas: People, Planet, Prosperity, Peace, and Partnerships. People, planet, and prosperity refer respectively to social, environmental, and economic aspects of sustainability. However, considering the current world challenges, different partnerships are of the highest importance to strengthen collaborative work. Moreover, without peace, marked by justice and solid institutions, it is impossible to achieve the SDGs.
The 2030 Agenda and the SDGs are guidelines that must be adapted locally; a set of global indicators is used to review and monitor its implementation. It is each country’s responsibility to put the program into practice. However, the SDGs encourage collaborative and creative work by corporations, organizations, communities, and change agents, based on learning and experience exchange. In other words, the SDGs have created a network of guidance and exchange that can be adopted by everyone, so that “nobody is left behind”.
Sustainability for business: the SDGs as a guide
If you are reading this blog post, there is a high chance that you are in the business world, part of a perhaps medium or small company. You may be wondering, then, how relevant all this is to you. Or eventually, how your company can adopt a sustainable agenda and have a positive impact on the future.
On top of the creation of a sustainable world, where there is no room for poverty, prejudice, hunger, where human rights are respected, and there is gender equality, where natural resources are used without destruction, where technological progress goes hand in hand with nature, and so on, there are other reasons for companies to choose a sustainable agenda and adopt the SDGs.
Society’s call for greater transparency and accountability is increasing fast. According to a 2019 Accenture survey, more than half of consumers say they would pay more for sustainable products that are designed to be reused or recycled. Another survey by the Stern School of Business at New York University shows that consumers are following through with their intentions as a growth in sales of sustainability-marketed products of around 50% was observed recently. Adding purpose to your business can generate a unique competitive advantage well-suited to discerning consumers and investors. Also, new opportunities for market growth can generate new revenue.
A closer look inside companies paints a similar picture. A series of recent studies show the advantages of Diversity & Inclusion for your team. A 2019 McKinsey analysis shows that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. The study concludes that “the most diverse companies are now more likely than ever to outperform less diverse peers on profitability.”
Seeking sustainable development should also be part of your company’s risk assessment, as it can guarantee business continuity. After all, several factors could disrupt your supply chain or the whole of your business. The current Covid-19 pandemic is just one example of how important it is to be adaptable and resilient. The latest World Economic Forum Global Risks Report puts climate change as the “stand-out long-term risk the world faces”. Other studies on floods and droughts, and fires, or even fluctuation in fuel prices show that such disruptions can cut the share price of companies by 7% and can have lasting consequences.
Creating shared value
We strongly believe that sustainability is not a buzzword and that sustainable development is the only way in which companies can create value and survive in the long term.
The idea behind sustainable development is no longer new, but it remains a big challenge to break free from the current paradigm of temporarily enriching shareholders, and at the same time expand the understanding of value creation as something that extends to all stakeholders including the biosphere and future generations. Our mission remains to embed this vision into the core of all business models, whether through solutions such as the 4D Sustainability Canvas or the content we publish on this blog. If you want to be part of this movement, don’t forget to subscribe to our newsletter using the box on your right and follow us. See you again soon!
This article was written by Gabriella Rodrigues, Ph.D, PMP. Gabi is a historian, archaeologist, made into professional problem solver and change agent, always driven by social responsibility.