The different facets of sustainability: economic sustainability

A green and environmentally-friendly economy

A sustainable economy is based on sustainable growth underpinned by three pillars: environmental (the environment’s capacity to continue to provide resources and eliminate waste), social (each generation’s right to benefit from the planet’s resources) and economic (the capacity to generate profits supporting populations and efficiently managing resources).

It follows that the economy is sustainable when it can generate profits, safeguarding human capital and the environment so that future generations can benefit from the resources in the same way as current generations.

In order to pursue sustainability, companies often modify their industrial systems which entails a large initial investment but ensures the natural balance and human well-being over the long term.
The state supports these initiatives by introducing laws and tax benefits and incentives for companies making small and large investments (in the public and private sectors) to optimise production and boost GDP (which, in turn, creates new jobs).

Five stages and four tools to become sustainable

To achieve complete sustainability, companies can apply a five-stage model.

Companies at stage 1 (pre-compliance) only occasionally adopt mostly internal sustainability policies (e.g., providing their employees with meal vouchers and healthcare assistance). Their sustainability policies beyond the company’s four walls are limited to donations to non-profit organisations.
The next stage (compliance) is when they start developing projects designed specifically to become sustainable (e.g., preparation of a sustainability report).
The third stage (beyond compliance) is when companies want to become fully sustainable (e.g., work/life balance).
The fourth stage (integrated strategy) is reached when companies gain awareness that sustainability gives them a permanent, tenable competitive edge. 
The last stage (purpose/passion) is achieved when sustainability becomes an essential part of the companies’ culture.

To progress easily from one stage to another, companies can use four tools:

1. Biotechnologies and energy efficiency: a steady move away from the use of fossil fuels (like oil) towards the increased use of renewable raw materials (such as solar, hydro and wind energy). As their name suggests, renewable energies do not run out and are potentially infinite (unlike fossil fuels that tend to run out over time);

2. Environmentally-friendly and low-polluting raw materials: some cleaning products are produced with chemical particles derived from petroleum refining. A good practice is to substitute these surfactants with molecules of natural and vegetable origin that are fully biodegradable and non-polluting;

3. Dematerialisation and sustainable production: the production chain is another fundamental step on the road towards sustainability. Companies must ensure that production waste is biodegradable and can be reused and recycled as much as possible. For example, a glass container can be reused more times than a plastic container;

4. Recycling of resources: the quantity of packaging used to sell products can be reduced to minimise the volume of domestic waste brought to landfills. If the packaging cannot be eliminated or reduced, one good solution is to produce it using fully-recyclable materials (such as paper) to limit the generation of waste.

Risk management to assess corporate sustainability

Risk management is used by companies to monitor risks and effectively allocate resources and capital, to grow company value and to manage uncertainties about the surrounding environment. A good risk management system allows companies to minimise risks and maximise the efficiency and effectiveness of their production processes.

Non-financial risks encompass the ESG (Environmental, Social and Governance) issues of a social and sustainability nature.

A successful risk assessment plan has five consecutive steps:

1. mapping of the contest;

2. risk identification and description;

3. measurement and estimate of the sustainability risk;

4. risk response;

5. risk oversight and monitoring

Virtuous examples of economic sustainability

Today’s world comprises increasingly careful consumers who give their business to low-environmental impact companies and by companies that meet these expectations with a sustainable structure able to reduce waste and pollution.

There is a vast range of praise-worthy sustainable companies that offer consumers real added value in every sector.

For example, we can cite the giants Nike and Adidas in the sportswear sector. Nike began collecting leather scraps generated by its own production and transformed them into fibre to be then used to create a new natural 100% recyclable material. Adidas turns plastic ocean waste into high performance sports footwear and clothing.

In the food and beverages sector, numerous brands have replaced their plastic packaging with compostable materials, such as the new Carte d’Or ice cream container, the Corona can pack rings and Lavazza’s compostable coffee capsules.

What does the future hold?

The current public health emergency has had a visibly huge impact on the global economy but it has not held back the pursuit of sustainability.

This crisis we are living through could actually be a springboard for companies interested in becoming more sustainable. It could be the right time to rethink operating methods and design innovative methods to generate value along the chain, from management (profits) to progress to society (people) to natural resources (planet).