Sustainable development: how does it relate to business practice?Posted on: January 19, 2023
We are currently at the intersection of some of the most-critical issues facing both our planet and its global population – including human rights abuses, poverty, the climate crisis, food insecurity, economic instability, social inequality and environmental degradation. Each issue on its own is an incredibly complex, multi-faceted and nuanced issue; there exist no instant, miracle solutions.
The United Nations Sustainable Development Goals (SDGs) are “an urgent call for action by all countries – developed and developing – in a global partnership”, aiming to deliver on the UN’s “shared blueprint for peace and prosperity for people and the planet, now and into the future.”
Responsible business practices and a commitment to global social citizenship have a vital role to play. Global sustainability advancement in any area – healthcare, education, economic growth, climate change, inequality – is not possible without a seismic shift in current operations and ways of working.
What is sustainable development?
The Brundtland Report, born out of the 1987 United Nations (UN) World Commission on Environment and Development, is where the concept of sustainable development got its name. The report defined it as, “development that strives to meet the needs of developing countries seeking to achieve a more sustainable world. Sustainable development addresses the needs of the present moment without compromising current and future generations to meet their own sustainable lifestyles.”
Sustainability in business and corporate social responsibility
Sustainable development has wide-ranging application to both the business world and corporate policy. Companies often mention their environmental, social and governance (ESG) efforts – the quantifiable, measurable factors that represent sustainable business practices – but what does this mean?
The concept of corporate social responsibility (CSR) refers to the responsibility that organisations have to the wider world. A management concept whereby companies integrate social and environmental concerns in both business operations and stakeholder interactions, CSR provides a framework for achieving environmental, philanthropic, ethical and economic progress.
The triple bottom line (TBL) – also known as the three Ps: people, planet and profit – is the idea that businesses should prepare three distinct bottom-line measurements to align business models and activities with a ‘green mindset’. Sustainable companies should actively contribute to economic growth, support social progress and promote environmental sustainability, as the three pillars of sustainable development demonstrate:
- Social – values that promote equality and respect for individual rights. Examples of increasing social impact include tackling the gender pay gap, offering flexible working arrangements, and prioritising Fair Trade products over others.
- Economic – contribution to economic development and growth, while limiting risks posed by production and operations. Examples of enhancing economic impact include adhering to the ISO 50001 standard, pivoting operations to renewable energy sources, and recycling products as part of a circular economy.
- Environmental/ecological – commitment to protecting the environment by reducing risks. Examples of boosting environmental impact include reducing carbon emissions to become carbon neutral/net zero, preventing water scarcity through mindful and reduced use, and practising responsible waste management.
Let’s explore these three pillars in greater depth, using case studies to ground them in their real-world context.
Social sustainability – IKEA
IKEA, the Swedish furniture manufacturer, has been an advocate of social betterment since the 1990s. As well as opposing child labour practices, they’ve donated more than $200m to global charity UNICEF to support access to clean drinking water for children worldwide, and their scheme Let’s Play for Change is designed to offer children safe spaces in which to play.
Alongside this, their supplier code of conduct, IWAY – that has been in practice for over 20 years –forces their suppliers to meet certain humanitarian standards. These include ensuring core worker rights, workplace safety and life-work balance for employees.
Economic sustainability – Adidas
Global sportswear giant, Adidas, is an example of a brand demonstrating how to effectively contribute to a circular economy, where pollution and waste is reduced or eliminated from the manufacturing process. In 2015, they entered a partnership with Parley for the Oceans – an organisation who tackle ocean plastic pollution, and started manufacturing shoes and clothing items from recycled plastics. Additionally, it helps to keep unwanted plastics out of the world’s oceans.
As well as using recycled materials, the brand is working to collect used products and extend their lifespan via re-use and re-commerce and repurposing materials more widely.
Environmental sustainability – Patagonia
Patagonia hit the headlines last month when its founder, Yvon Chouinard, gave away the global outdoor clothing company – valued at approximately $3 billion – to a non-profit organisation to help fight the climate emergency.
However, Patagonia’s vision had always been one of protecting nature alongside doing business. Since its first days, cuts of the company’s profits have been donated to environmental initiatives and causes. The brand also switched to manufacturing from organic cotton, gained FSC Certification, developed the Common Threads Garment Recycling Program – where old and worn base-layer garments are collected and recycled into new materials – operated out of LEED Certified buildings, and backed the 1% for the Planet Organization.
The benefits of conducting sustainable business
While the overriding aim of investing time and energy in a sustainability strategy is to contribute to a better future – both for the planet and its population – there are also tangible business benefits to doing so.
Businesses are viewed favourably in the eyes of consumers, regulators and investors – all of which serves to boost brand reputation. This competitive advantage may lead to greater market share and better financial performance.
Leaders aiming to improve their social, economic and environmental impact will naturally scrutinise business practices related to their product offerings, operations, procurement, value chain, employee relations and other aspects of their businesses. As well as highlighting new, innovative solutions, this could lead to cost-saving benefits.
Employee engagement and satisfaction is likely to increase. More and more, team members are regarding their employers as extension of their own identities and convictions. A company who is actively making responsible, sustainable efforts may observe an increase in employee retention and the number of high-quality applicants interested in its roles.
Increasingly, businesses are embracing their wider responsibilities due to moral convictions as well as profit. While there are undoubtedly benefits to be gained in the short-term, these shifts also support a more-resilient, profitable and sustainable future in the long term.
Champion sustainable business practices and ambitions in your sector
If you’re passionate about environmental, economic and social sustainability – and want to gain the skills to implement meaningful change – choose Keele University’s online MSc Management with Sustainability programme.
You’ll develop the skills and expertise to adapt corporate policies and practices in a bid to build a better world for future generations. Our flexible programme is designed to prepare you to advance into senior leadership roles, placing particular emphasis on building your knowledge of sustainable practice whilst developing an advanced theoretical understanding of the international business environment. Your studies will encompass green finance, operations and supply chain management, sustainability, people management, marketing, and much more.