Defining sustainability
For many people and businesses, “sustainable” means “environmentally friendly” or “green.” For some businesses, an expanded interpretation of “sustainability” implies managing environmental, social, and governance issues—making it clear that they consider sustainability an external issue to be managed rather than a core concern of the business.
At SBSA, we believe that sustainability is fundamentally about survival over the long term. Surviving an extended period of disruption requires access to critical resources and a highly developed ability to adapt in the face of change, both foreseeable and unforeseen.
But sustainability goes beyond mere survival; it also means recognizing and seizing opportunities, especially those that offer solid long-term prospects. Ultimately, a healthy business requires that the business context—the economy, society, and natural environment—also be healthy.
Resource realities are driving the urgent need for sustainability
New and rapidly changing realities today around resource depletion, energy constraints, and the global move to limit carbon emissions are significantly altering the business environment. Whether you consider these issues from a science, policy, or economic perspective, the rules of the game are changing. Consequently, the risks to your business (encompassing physical, regulatory, competitive, legal, and reputational risks) are increasing.
Adding to the challenges of accurately indentifying and assessing risk—and reward—is the complex interconnectedness of the global value chain, national economies, and world banking systems.
Our global economy is becoming more and more constrained by natural resources. The rising middle classes of China, India, and other emerging economies compound the resource challenge. It is no surprise that a recent McKinsey Quarterly article stated that enterprise leaders must “build the constant improvement of resource use into an organization’s processes and strategies.”
With our collective future so full of underlying uncertainties of global scale, how can organizations plan for and navigate these challenges?
Reframing: Sustainability is the business of business
At SBSA, we propose that firms reframe sustainability as business sustainability: the ability of a business to survive and thrive over the long term by 1) balancing economic, social, and environmental considerations, and 2) managing risks and seizing opportunities associated with disruptions.
This definition changes the emphasis from addressing “society’s” interest in sustainability to “enlightened business self-interest” —seeking value creation aligned with a fundamental, disruptive shift in societal values and environmental constraints. Rather than just “managing” sustainability issues, the firm incorporates sustainability as a core consideration of the business context.
Moving beyond business continuity/resilience: business sustainability
A sustainable business takes a longer-term view and considers not only the short- or medium-term disruptions addressed by business continuity or business resilience but also important shifts in the business context. The following table compares and contrasts these three approaches to addressing disruptions.
