Sustainable Development - What is It? Why does it matter?
Marie-Kristin Schürmann
February 22, 2021

Over the past couple of years, sustainability has become a common buzzword, and while most still associate this term with CSR initiatives and sometimes the more negative nuance of greenwashing, it is becoming more and more apparent that a company without a sustainable development strategy risks not benefiting from it in the long run.

We live in a time where almost everything is abundant, and yet we need more. At the current stage in world history, we are facing continuous population growth, countries running out of arable land and into large debt, millions of tonnes of food waste yearly, accompanied by famine and contaminated groundwater, corruption, human rights violations, a fast flow of information and even faster turnover rates of disposable consumer goods, and environmental abuse. The pace at which our global population is creating waste, polluting its environment, and exploiting human resources all in the name of universalism and desire is not looking to slow down any time soon.

All this while our natural resources are diminishing at an alarming rate and the socio-economic inequality gap widening.

Sustainable development can be broken down into three key areas; environmental sustainability, social sustainability, and economic sustainability. In 1997, John Elkington coined the triple-bottom-line that opposed to the single-bottom-line looks beyond short-term profit predominantly financially manifesting itself.

Now, when looking at the triple-bottom-line or the 3 P´s, Elkington was more concerned with the long-term impact our current human behaviour would have on the people and planet it affects and the potential profits that could be achieved socially, financially, and environmentally, if a sense of balance could be restored. After all the world sustainability derives from the words ‘sustain’ and
‘ability’ or the ability to sustain something on a more permanent basis.

To be able to further develop more sustainably we must learn how to live within the limits of physical, natural, and social resources. We must learn how to develop in a way that meets our own current needs i.e. by the use of modern technology, and without sacrificing the future needs of other generations.

Consequently, in 2015, the United Nations set up the 17 global Sustainable Development goals which aid companies and governments to minimise the negative impact a company has on the environment and society, or better yet increase their positive impact by 2030.

The 17 Sustainable Development Goals

Following these, companies and governments are being urged to be proactive in their social and environmental efforts. Thus, sustainability has become one of the main drivers of Innovation.

Sustainability, Competitiveness, and Innovation

Sustainability, competitiveness, and innovation should be central to making a business more robust and resilient while building or adapting new business models around the topic of sustainable development, as financial profitability goes hand in hand with having a positive impact on the environment and society.

Reducing costs and increasing profitability can lead to a competitive advantage by focusing on preventing both physical waste and other inefficiencies. Companies, especially manufacturing companies, must approach a closed-loop supply chain by eliminating waste and extending product life cycles. Likewise, following the product life cycles more closely will allow further investigation of true impact at each step of the value chain.

Moving away from linear thinking and towards a more circular model and circular economy allows for the true impact of waste and end-of-life products to be considered as part of an organisation's responsibilities rather than being considered externalities.

But sustainable development goes beyond the factors of eliminating waste, it touches upon many more factors that should all benefit from one another creating harmony and positive impact. These factors can include material science, social issues, laws and legislations, finance, human behaviour, internal company cultures, and economies.

The European Supply Chain Law that is currently under discussion is another reaction to companies not taking responsibility for their supply chains. New regulations could introduce new reporting requirements, calling for companies to meet certain standards, and providing monitored insight.

Therefore, companies and governments must also work together on developing new technologies which in turn will allow lowering the negative environmental and social impact they are currently driving. The use of new technologies, sensors, connectivity, and analytics can help along the way fostering new relationships and strengthen existing ones. Thus, implementing these sustainability standards can improve a companies economic value.

Also they must gain trust, not only from one another, but most importantly from current and future consumers, communities, and employees. Trust that can be supported and given by becoming more transparent, and by being able to provide in-depth insight across all tiers of one's supply chain (or value chain) and into operations. From the early stages of material sourcing, down to the farming or mining of raw materials to the disposing of the product at the end of its life.

Blockchain technology can gather blocks of information along the supply chain, chaining them together, and storing them securely in a decentralised digital record that cannot be altered or deleted. Since this data is safe, non-manipulatable, accessible and accurate it is considered highly credible and traceable.

Consequently, one can create a trusted and tight-knit supplier network, drive positive change, and ensure the future well-being of companies, countries, economies, environments, communities, and future generations’.

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