According to the Borgen Project, Sustainability is “Our common future” or “The development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. From these particular definitions Sustainability and be reduced to two key concepts: needs and limitations. Needs refers to those in need – the poor of the World and the limitations refer to the imposed by the state of technology and social organisation on the “ability of the environment to meet present and future needs.”
How do we measure Sustainability?
To measure Sustainability is a challenge since the mid-1990s. John Elkington tried to do it by encompassing a new framework which ensures performance in American businesses. It was an accounting framework called Triple Bottom Line (TBL). Moreover, it went beyond the traditional measures of profits, return on investment, and shareholder value to adding environmental and social dimensions. TBL can be an essential tool to support Sustainability goals.
The TBL incorporates three dimensions of performance: social, environmental and financial, and includes environmental or ecological and social measures that can be difficult to assign appropriates means of measurement.
Academic disciplines organised around Sustainability have multiplied over the last 30 years. People inside and outside academia who have studied and practised Sustainability would agree with the general definition of Andrew Savit for TBL. The TBL “capture the essence of Sustainability by measuring the impact of organisation activities on the world, including both its profitability, shareholder values and its social, human and environmental capital.”
When talking about Business Sustainability, we are talking about measuring profit, nonprofit and government (federal, state and local level) sectors performance. Business Sustainability represents resiliency over time – a business that can survive and it is often defined as managing the TBL – a process by which companies manage their financial, social and environmental risks, obligations and opportunities. These three impacts are sometimes referred to as profits, people and planet, the 3Ps.
Many businesses and nonprofit organisations have adopted the TBL Sustainability framework to evaluate performance. A more robust definition is that Business Sustainability represents resiliency over time – companies that can survive shocks because they are intimately connected to healthy economic, social and environmental systems. These businesses create economic value and contribute to healthy ecosystems and healthy communities.
Putting the TBL into practice
The 3Ps do not have a standard unit of measure. Profits are measured in dollars, but how you can measure Social Capital or environmental or ecological health? By finding a standard unit of measurement is one challenge.
Another solution would be to calculate the TBL regarding an index. In this way, one eliminates the incompatible units issue and allows for comparisons among entities. e.g., comparing performance between companies, cities, development projects or some other benchmark.
An example of an index that compares a country vs the nation’s performance for a variety of components in the Indiana Business Research Center’s Innovation Index (there remains some subjectivity. The downside of this approach is the proliferation of metrics that may be pertinent to Measuring Sustainability. The level of the entity, type of project and the geographic scope will drive many of the decisions about what measures to include.
Economic Measures - Economic variables ought to be variables that deal with the Three Bottom Line and the flow of money. It could look at income or expenditures, taxes, business climate factors, employment, and business diversity factors.
Environmental Measures - Variables should represent measurements of natural resources and reflect potential influences to its viability. It could incorporate air and water quality, energy consumption, natural resources, solid and toxic waste, and land use/land cover. Ideally, it would help organisations identify the impacts a project or policy would have on the area.
Social Measures - Social variables refer to social dimensions of a community or region and could include measurements of education, equity and access to social resources, health and well-being, quality of life and social capital. Data for many of these measures are collected at the state, and national levels, but are also available at the local or community levels:
Businesses - The TBL and its value of Sustainability have become dominant in the business world due to accumulating evidence of greater long-term profitability.
When talking about Business Sustainability, we are mainly talking about measuring profit, nonprofit and government (federal, state and local level) sectors performance. Business Sustainability represents resiliency over time – a business that can survive shocks because they are intimately connected to healthy economic, social and environmental systems. Moreover, it is often defined as “managing the TBL” – a process by which companies manage their financial, social and environmental risks, obligations and opportunities. These three impacts are sometimes referred to as profits, people and planet, the 3Ps.
Many businesses and nonprofit organisations have adopted the TBL Sustainability framework to evaluate performance. These businesses create economic value and contribute to healthy ecosystems and active communities.
Companies recognise that aligning with non-profit organisations makes good business sense, particularly those nonprofits with goals of economic prosperity, social well-being and environmental protection. The concept of the Triple Bottom Line can be used regionally by communities to encourage economic development growth sustainably.
Business Sustainability requires firms to adhere to the principles of sustainable development. According to the World Council for Economic Development(WCED), sustainable development is the development that meets the need of the present without compromising the ability of future generations to meet their own needs". So, for industrial development to be sustainable, it must address a critical issue at the macro level, such as economic equity (poverty, community, health, and wellness, human rights) and environmental accountability (climate change, land use, biodiversity).
Some best practices foster business sustainability, and help organisations move along the path from laggards to leaders. These practices include:
• Stakeholder engagement.
• Environmental management systems.
• Reporting and disclosure.
• Life cycle analysis.
Firms that are sustainable have been shown to attract and retain employees more efficiently and experience less financial and reputation risk. These firms are also more innovative and adaptive to their environments.
Examples:
Tech or financial firms going to a paperless office environment.
A cell phone manufacturer is pursuing a "conflict-free" mineral resource SC.
A bank is committing to and accomplishing carbon-free operations.
Dave Food
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