What is sustainability and what does it mean? The answer to this question depends on whom you ask. Some focus on environmental impact alone, or emphasize the idea of the triple bottom line (measuring performance of organizations or communities on separate economic, environmental, and social dimensions). However, one of the best known general definitions emerged from a 1987 UN report about sustainable development, which was described as development “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” It is being increasingly acknowledged that economic, environmental, societal, and personal systems are interdependent and must be considered in an integrated way. In the business world, it is going to transform the ways we all work, live, and compete. The process has already begun and is fast catching up.
While sustainability reporting is currently voluntary, many believe mandatory disclosure is inevitable. Already, thousands of corporations around the world engage in sustainability reporting. Ernst & Young research shows that more than two–thirds of the Fortune Global 500 publish some form of sustainability or corporate social responsibility (CSR) report. The pressure to report on sustainability comes from all sides: the financial community, customers, employees, NGOs, labour unions/activists and government regulators. The major challenge, however, is measuring, tracking, and reporting sustainability efforts. These tasks are especially difficult in light of the fact that consumers and other stakeholders are increasingly demanding complete transparency on sustainability. Companies are often expected to share such information as their carbon footprint and the specifics of their manufacturing practices.It is interesting to see companies promoting their products by claiming lower “carbon footprint” which refers to the amount of carbon dioxide gas (C02) emitted in the entire production cycle of the product from many sources. CO2 is the primary gas responsible for Global warming and the climate change. Similarly, the Corporate Social Responsibility (CSR) covers working conditions of the employees, their salaries, community welfare. Also, the use of sustainable/recyclable resources and energy efficient equipment and processes is becoming a compulsion to be competitive. The biggest drivers of corporate sustainability investments are government legislation, consumer concerns, and employee interest in sustainability. A recent MIT survey has cited the case of Nike which began taking a deep look at its operations after it faced criticism over labor practices at its Asian suppliers. The early efforts were siphoned onto a team focused on compliance and social responsibility. A turning point came when the team began to ask about the long-term implications of its product design and manufacturing decisions. Where did the product materials come from? Were they toxic? What happened at the end of a product’s life? Looking into manufacturing, they found it took three shoes’ worth of material to produce just two – one shoe, in effect, ended up as waste at a cost of $700 million a year. As a result, the goal for zero waste got the attention of senior managers. It became one of several long-term goals to reach by 2020 – along with zero toxic materials, closed loop systems and sustainable growth and profitability. The company brought the supply chain partners into the process, like Dow, DuPont, and BASF. The new design and production methods are helping Nike to reduce waste by up to 67%, cut energy use by 37%, and slash solvent use by 80% compared with other Nike products.The companies that holistically integrate their sustainability strategy throughout the business are winning and creating new sources of advantage to deliver measurable business results.