At the launch of the “Sustainable Living Plan” of Unilever, the then-CEO of the company, Paul Polman, delivered a spectacular speech about economic sustainability. Of all his words, the most notable one was shared on the company’s Twitter account: “We cannot choose between [economic] growth and sustainability—we must have both.”
In the modern world, people measure a nation’s growth through its economic growth. They overlook the impact of the development on the environmental, social, and cultural aspects of the nation’s community. That is why the term “Economic Sustainability” is gaining more and more fame. International organisations like the United Nations (UN) have taken into account Sustainable Developmental Goals to bring back the balance between economic growth and sustainability practices. “Goal 8” of the “Sustainable Development Goals” by the United Nations is “Decent Work and Economic Growth,” and the agenda is to support inclusive and sustainable economic growth, as well as decent employment for all.
What is Economic Sustainability? A Guide for the Curious!
The simple answer to “What is economic sustainability?” is that economic sustainability concerns adopting practices that facilitate long-term economic growth and ensure no adverse effects on the community’s social, environmental, and cultural dimensions. However, this definition does not provide a clear picture. There is a bigger picture.
Economic sustainability is not just about making profits; it’s about promoting long-term growth while caring for the environment, society, and culture. This approach ensures businesses and nations can thrive without harming our planet or communities. As per the Global Sustainable Investment Alliance, it is little wonder that we have seen a massive investment of USD 30.3 trillion worldwide in sustainable investing assets. Businesses are not just concentrating on their profits but thinking about the environment and the future.
Former United States Senator Christopher John Dodd once mentioned a very impactful line: “We learned that economic growth and environmental protection can and should go hand in hand.” This means we have learnt to balance economic goals with social and environmental responsibilities and create a future where prosperity and well-being go hand in hand. It promotes a healthier and more equitable world for everyone.
Economic Sustainability Practices
“Sustainable development is the pathway to the future we want for all. It offers a framework to generate economic growth, achieve social justice, exercise environmental stewardship and strengthen governance.” Ban Ki-moon, former Secretary-General of the United Nations and South Korean diplomat, mentioned this in his speech at the G20 Saint Petersburg Leaders’ Summit (2013). Sustainable development practices involve building and growing in a way that fulfils our needs today without harming the ability of future generations to meet their own needs. We cannot simply be selfish and continue to deplete the planet’s resources without considering future generations’ needs.
But why are we talking about sustainable development? Economic sustainability practices are closely related to sustainability development practices. However, financial sustainability is a mixture of economics and sustainability. It focuses more on the monetary aspects of sustainability practices.
Economic sustainability practices are diverse and tailored to organisations adapting to long-term growth while minimising environmental and social impacts.
- One critical approach is devising less wasteful systems, such as optimising supply chains and reducing resource use.
- Prioritising low-impact economic development by investing in sustainable businesses fosters a waste-free future.
- Switching to renewable energy sources like solar or wind power also helps organisations reduce reliance on fossil fuels.
Steps Taken Around the Globe Towards Economic Sustainability
Awareness about economic sustainability is increasing rapidly worldwide. Businesses have become aware that it’s not okay to just make profits without considering environmental and social sustainability.
- Retailers like BestBuy and Staples offer recycling services, while clothing brands like H&M provide discounts for donated clothes.
- In 2022, global investment in renewable energy reached around USD 495 billion, a 17% rise from the preceding year.
- As mentioned in KPMG International’s Survey of Sustainability Reporting 2022, the world’s top 250 companies demonstrate an impressive 96% rate of sustainability reporting. This rate will increase further with new regulations focusing on non-financial reporting.
Figure 1: Some critical statistics from KPMG International’s Survey of Sustainability Reporting 2022
- Emerging practices such as micro-farming and rooftop solar power are gaining traction, supporting local economies, and reducing environmental stress.
Economic Sustainability- More than a Buzzword!
Economic sustainability is not merely a buzzword; it’s a vital concept that holds the key to our collective future. It’s not only the responsibility of big brands or companies; it’s also our responsibility. It is an excellent sign that 44% of consumers are more inclined to purchase from a sustainable brand. The path to fully sustainable economic growth may be slow and full of hurdles, but the destination is worth the journey.
