Definition

business sustainability

Part of the Compliance glossary:

Business sustainability, also known as corporate sustainability, is the management and coordination of environmental, social and financial demands and concerns to ensure responsible, ethical and ongoing success.

In a broader context, social, environmental and economic demands are considered the three pillars of sustainability. Within the corporate world, they are sometimes referred to as the triple bottom line. The concept is a departure from the traditional concept of the bottom line, which evaluates all efforts in terms of their short-term effect on profits.

In traditional corporate cultures, social and environmental concerns have typically been considered to conflict with financial goals.  Depletion of non-renewable resources, for example, is obviously not a sustainable practice. However, because alternatives typically require investments in infrastructure,   continuing to rely upon fossil fuels is the least expensive short-term option.

The goal of sustainability requires a more extended timeline for return on investment (ROI) but once initial investments are made, they can actually lead to increased profitability.  One example is free cooling for data centers, which takes advantage of naturally-occurring phenomena to control temperatures. Although the technologies involved may require initial cash outlay, the renewable resources they rely upon are freely available and reliable, which will eventually pay off.

Similarly, investments in socially ethical practices may initially cost a business money but typically lead to enhanced recruitment, branding and public relations (PR), which all tend to lead to increased profitability.

See also: World’s Most Ethical (WME), supply chain sustainability, sustainability risk management (SRM)

This was last updated in November 2013
Contributor(s): Ivy Wigmore
Posted by: Margaret Rouse

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