Sustainability refers to business practices, systems, and activities that lead to long-term positive economic, environmental, and social development. In other words, sustainability is the ability to maintain and improve quality of life without depleting the resources required for future generations to enjoy a similar or improved standard of living.
Sustainable practices such as reduced resource use, energy efficiency, and waste minimization decrease the environmental footprint of businesses and societies. Sustainability ensures that natural resources are used more efficiently and preserved for future generations, reducing the risk of resource depletion and helping in the conservation of vital ecosystems. Sustainability also helps combat climate change and pollution, leading to a healthier and greener planet.
Aside from improved lifestyles due to cleaner environments, sustainability also emphasizes social equity and ethical business practices, ensuring that opportunities are distributed more fairly across society and that people are treated with fairness and dignity. This can help in reducing poverty and improving the living conditions of the underserved and marginalized populations. It also involves community-oriented approaches, fostering a sense of community, increasing civic engagement, and making communities more resilient to environmental and economic changes.
Companies that adopt sustainable practices often gain a competitive edge. Sustainability can lead to new market opportunities, particularly as consumers and investors increasingly prefer environmentally friendly products and services. Sustainability also helps companies anticipate and react to environmental, social, and regulatory changes, reducing risks associated with resource scarcity, climate change, and human rights violations.
While ESG and sustainability are often used interchangeably, ESG is more investor-focused. ESG criteria are primarily used by investors to assess potential risks and opportunities that may not be captured by traditional financial analysis. These have been increasingly integrated into investment decision-making processes to identify companies with superior long-term performance prospects. Given its use for assessments, ESG often emphasizes measurable, quantifiable metrics that can be incorporated into investment models.
On the other hand, sustainability is more encompassing. This focuses more on the ability of an organization to maintain processes, systems, and activities indefinitely without depleting resources, harming natural cycles, and negatively affecting communities. Sustainability considers the overall impact of an organization on the planet and society, aiming for a balance across various pillars to ensure long-term viability.
While sustainability metrics can inform investor decisions, they are also used by companies to improve their operational efficiencies, innovate product lines, engage stakeholders, and align with global sustainability goals.
Keslio is an international sustainability advisory that helps companies and investors navigate their sustainability journey. We support our clients through various services, such as strategy development and implementation, reporting and communications, and greenhouse gas emissions calculations.
We’re passionate about supporting business leaders and their companies with sustainability and ESG and we’d love to help you. To talk to us and find out what Keslio can do for you, please use the section below to contact us, or email us at hello@keslio.com.
