Sustainable development refers to progress and activities that enable current generations to meet environmental, social, economic, and other needs without compromising the ability of future generations to meet their needs. Sustainability occurs when current and future generations can meet their needs.
For many, the environment is the default association with the word sustainability. However, sustainability includes, is inextricable from, but is not limited to, environmental considerations.
A quick review of the 17 Sustainable Development Goals (SDG)s that the United Nations adopted in 2015 will identify the following 7 goals that directly relate to the environment:
- Clean water and sanitation
- Affordable and clean energy
- Sustainable cities and communities
- Responsible consumption and production
- Climate action
- Life below water
- Life on land
Several other SDGs, including the following, (arguably) do not relate directly to the environment:
- No poverty
- Zero hunger
- Good health and well-being
- Gender equality
- Decent work and economic growth
- Reduced inequalities
But on thoughtful examination, even these SDGs that are not directly related to the environment can impact and are impacted by environmental issues. For instance, agricultural practices on land or in water can affect the sustainability of food sources and the Zero hunger goal. Likewise, part of Decent work and Good health and well-being includes environmental management systems that safeguard workers from environmental harm.
The interdependence between environmental, social, and economic matters, or the pillars of sustainable development, is why environmental sustainability is critical.
Some core ideas behind sustainability are analogous to those that are top of mind for small-business owners, compliance officers, and many others across organizations. Take the concept of generational wealth, for example. The heads of many family-owned farms or other businesses take pride (and perhaps trepidation) in the thought that they must preserve corporate assets and earning capabilities for the next generation. It is no different with the environment or any other aspect of sustainability—carrying on business in a way that preserves the capacity of future generations to meet their needs.
Another core idea is the precautionary principle. Under the precautionary principle, organizations should not avoid, postpone, or disregard sustainability practices in the face of imperfect science, because the risk is potentially catastrophic and irreparable environmental harm. So, for instance, the science around climate change may be imperfect, but there is enough information and risk to take precautions that limit greenhouse gases in manufacturing and other activities. Precautionary measures that manage financial and other risks within organizations are right at home with precautionary measures that mitigate potential threats to the environment and sustainability in general.
Sustainability practices can include measures that also help organizations meet environmental, social, and governance or ESG criteria. ESG and sustainability are not interchangeable; meeting ESG metrics can support sustainability practices, but in and of themselves do not equate to sustainability. For instance, pay equity and board diversity practices can help organizations meet ESG targets but may also contribute to sustainability goals for Gender equality and Decent work and economic growth. (A future post will address ESG matters).
Apart from the inherent value of sustainability practices, there are increasing government, regulatory, consumer, public, and other imperatives to operate with sustainability as a core objective. As such, practices related to the environment, pay, working conditions, and other factors are no longer optional for organizations. Consequently, boards and senior management should view sustainability practices through lenses that recognize benefits, including the following:
- Compliance with laws and regulatory mandates
- Competitive advantages against peers that cannot appreciate the opportunities in sustainability practices
- Improved reputation and other goodwill in the eyes of the supply chain, customers, and others
- Reduced financial and other risks and improved ability to meet organizational goals
Meeting your duty of care
Make sustainability a board and governance focus and create or update sustainability policies. Log into the Operations and Marketing database in PolicyPro for the upcoming release that updates OP 5.05 – Sustainability, with tools to help you create and implement sustainability practices based on International Organization for Standardization (ISO) and other standards.
Policies and procedures are essential, but the work required to create and maintain them can seem daunting. The Finance and Accounting, Operations and Marketing, Not-for-Profit, and Information Technology databases in PolicyPro, co-marketed by First Reference and Chartered Professional Accountants Canada (CPA Canada), contain sample policies, procedures, checklists and other tools, plus authoritative commentary to save you time and effort in establishing and updating your internal controls and policies. Not a subscriber? Request free 30-day trials of the Finance and Accounting, Not-for-Profit, Operations and Marketing, and Information Technology databases in PolicyPro here.
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