C-plus-C
Why is sustainability important?
The term sustainability was first used in the 18th century by the forestry engineer, Hans Carl von Carlowitz, and referred at the time to the fact that, in order to protect the economic basis of the forest, only as much wood should be removed as would grow back.
What the United Nations (UN) means by sustainability today is described in the 17 SDGs (Sustainable Development Goals) of there 2030 Agenda. These SDGs are worth reading and provide arguments for sustainablility, because they not only name the goals, but also explain why they are important.
Here are some selected arguments why it is important for a company to improve its economic, social and environmental sustainability:
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Economic sustainability means that the elements of the business basis are secured for the long term in order to be economically successful in the long term.
The critical elements of the business model in this regard are:
- Procurement of raw materials and intermediate products
- Production and sales processes
- Products that meet the environmental requirements of customers
- Qualified employees
- Compliance with a regulatory framework
The stability of the framework conditions in this respect cannot be taken for granted due to changes in nature and society, resulting among other things, from the climate catastrophe and increasing environmental pollution, and consequently adjustments to the business model are required (with as much foresight as possible) in order to be positioned for the future.
2. Social sustainability means dealing with all stakeholders (employees, neighbors, customers, shareholders,
etc.) in such a way that this both complies with applicable laws and social norms and keeps these
stakeholders stable as positively interested parties.
In concrete terms, this means, for example, dealing with employees:
- Fair and transparent hiring and departure processes
- Safe and healthy working conditions
- Performance-promoting production and sales processes
- Appropriate pay and helpful social support measures
- Non-discriminatory communication across all levels of the company
In view of the increasing shortage of qualified employees, this can also increase the attractiveness for potential applicants in addition to increasing work performance and retention time.
3. Ecological sustainability means only taking as much as "grows back" and is important on both a small and
large scale in order to maintain the basis of life in respective areas.
Humans' natural environmental needs for long-term stability include:
o Clean water, air and soil
o Biodiversity as much as possible to protect against disease and changing environmental conditions
o Sufficiently large, pristine buffer zones to compensate for short-term fluctuations
The example of water as a natural resource with its special regional context is a good illustration of the consequences of neglecting sustainability. Excessive (economically induced) water extraction, for example, leads to the drying out of green zones and can then trigger the following developments, among others:
- Greater environmental damage and, if necessary, interruptions in production after heavy rainfall due to the lack of natural flood protection.
- Changes in the microclimate due to the lack of natural temperature regulation of green zones lead to increased expenditures for necessary air conditioning.
- Similarly, a deterioration in air quality due to the lack of a forest's filtering effect leads to a deterioration in living and working conditions and ultimately to a reduction in the attractiveness of the work location.
On the other hand, the introduction of a sustainable (because closed) water cycle, for example, brings the following advantages:
- Independence from the stability of the regional water supply
- Less influence of local water prices on a company's financal success
- Communicative advantages over competitors when selling products and also when recruiting employees
The pressure to act in an ecologically sustainable manner is additionally increased by the fact that the changes can be very long-term and initially "invisible", but are often irreversible after a certain threshold.
4. Regulatory sustainability is a subcategory of environmental sustainability. But it is of particular importance
for companies because in the course of the current changes in nature and society, the regulatory conditions for
companies are also tightening (at an increasing pace!).
Examples:
- Extension of the obligation for non-financial reporting both with regard to the obligated SMEs and with regard to the matters to be reported through CSR-RUG and ESRS
- ISO 26000 as a general guideline for social responsibility
- Supply chain due diligence act ("LkSG")
- Tightening of emission regulations and heating law ("Heizungsgesetz")
It is obvious that it is more successful as a first mover to drive the market and competition in front of you, than to try to "sit out" the problem and only react to the pressure of the environment or when market shares decrease or costs increase.
C-plus-C can help with a neutral view from the outside and variad experience to find further sustainability arguments for the concrete business model of a company and (even more important!) develop appropriate solutions together with the company.