FAQs

What does 'sustainability' mean?

Responsible concepts such as sustainability or sustainable development first appeared in 70s and were widely used by practitioners in environmental and development areas. In these years, sustainability was employed to de ‘scribe an economy in equilibrium with basic ecological support systems (Stivers, 1976). On the other hand, the most accepted and widely used definition of sustainable development was proposed by the Brundtland Commission which stated this concept as “[…] a development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (World Commission on Environment and Development, 1987, p. 43). Apart from the several definitions of sustainability, the model proposed by Elkington (1998, 2004), called the Triple Bottom Line (TBL), has been taken as a reference to materialize the sustainable concepts in management environments. From a microeconomic perspective, this model simultaneously considers economic, Brazilian Journal of Operations & Production Management Volume 9, Number 2, 2012, pp. 39-50 41 environmental and social goals, at whose intersection there may be activities that not only positively affect the natural environment and society, but which also result in long-term economic benefits and competitive advantage for the companies.

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Why is it so urgent to do something now?

Earth will be home to 9.8 billion people by 2050¹ – that’s 33% more people on the planet within 31 years. Population growth is expected to have a far-reaching impact on economies, industries, societies, businesses and individuals.

The world has warmed before, but never this quickly, and it is due in large part to human activities. For instance, the changes in the Arctic between just six years ago and now are shocking. People in most parts of the world are seeing and feeling the impacts

We can limit global temperature rise to less than 2 degrees if we take action now. We need all countries and all sectors of society to act now—it is in the interests of everyone.
It is doable. Taking climate action now makes good economic sense. The more we delay, the more we pay. We can promote economic growth, eradicate extreme poverty, and improve people’s health and well-being by acting today.

how can I start?

Overcoming climate change will not happen overnight. People are creatures of habit and we find it difficult to change. Plus, people can quickly feel overwhelmed by the magnitude and complexity of the problems the world faces; they experience ‘apocalypse fatigue’. 

The solution? Start small.

We invite you to become aware of your current lifestyle and the impact that comes with it. Take the WWF’s Footprint questionnaire (based on the UK), or calculate your ecological footprint with this tool developed by the Global Footprint Network, which provides concrete tips and will show you where you can improve.

 

Food for Thought

If your carbon footprint calculated in the questionnaire is more than you anticipated, just remember that it is difficult to do everything. Be kind to yourself, appreciate your current efforts, then find out which actions for mitigating climate change would work for you. Taking this measured and strategic approach is especially important to avoid falling into an ‘inevitable doom scenario’ and experiencing  apocalypse fatigue. Watch this TEDtalk by Espen Stoknes to learn what apocalypse fatigue is, and how to transform it into action on global warming.

Looking for more challenges? Have a look at the suggestions and tips related to the SDGs provided here.

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I'm afraid we'll lose money if we have to be sustainable

Our shareholders demand a profit, that's why we can't be sustainable

Many companies believe they cannot shift to more sustainable practices as this would damage the profit margins and shareholders demand their dividends. For decades, maximising profits has been the primary objective in most companies, which boils down to maximising shareholder value. But often, the shareholder model is holding companies back from sustainable business practices. An alternative approach is to broaden the objective of the company to optimising the total or integrated value. This approach combines optimising the financial, social, and environmental value (people, planet, profit). In that way, the interests of stakeholders are ranked equally important. This shift, from the old shareholder model to the new stakeholder model, requires new rules for corporate governance and decision-making on corporate investments to deal with the different interests. It basically means incorporating the social and environmental dimensions.

But here is the crux of the matter; the million dollar question. The old view is that taking social and  environmental concerns into account will cost investors money and generate lower financial returns. A new emerging view is that there is no need to sacrifice return when investing in solutions for sustainable development. In other words, investors should invest in the future to preserve the value of their investments. The underlying premise is that social and environmental standards are tightened over time. That could be caused through regulation and taxes, such as carbon taxes. It could also be caused through reputation effects, such as campaigns by NGOs or consumers avoiding wrong products. Let me give you an example. Coal will not be used anymore, when carbon taxes are introduced over time. Another example. Underpayment in developing countries will disappear, as these countries tighten their social legislation in the future. Finance is about anticipating such changes. From a risk perspective, financial institutions have already started to avoid financing companies with unsustainable business models, built for example, on fossil fuels or cheap labor, because these are expected to be unprofitable investments in the future. Fossil fuel companies are thought of us becoming stranded assets, when future carbon taxes or improved technology moves the business case to renewable energy. The reduced cost of solar energy and wind parks is already shifting the playing field of investments in the energy sector. It gets more exciting when we switched from the risk perspective to the opportunity perspective. Some advanced investors look for companies that provide solutions for water, healthcare, or renewable energy. These investors tend to look beyond financial markets, which only convey financial information. They conduct fundamental analysis of company's business models to uncover the social and environmental value next to the financial value. By doing a broad analysis, covering the financial, social, and environmental dimensions, investors aim to select companies of the future. Companies that do well in the future will also provide an appropriate financial return.