Some incorrectly believe sustainability and the triple bottom line are only about the environment. However, both of these concepts are also about equity, human rights, and economic prosperity. From the original text of Our Common Future, we read that:

“Poverty is a major cause and effect of global environmental problems. It is therefore futile to attempt to deal with environmental problems without a broader perspective that encompasses the factors underlying world poverty and international inequality.”

In 2005, Environmental, Social, and Governance (ESG) was coined by United Nations Environment Programme (UNEP) Finance Initiative in the Freshfields Report and the Who Cares Wins report from UN Global Compact.

Today we can look to the Sustainable Development Goals (SDGs) for further evidence that sustainability is as much about people and prosperity as it is environmental protection. In fact, all are needed for life to be sustained. Sustainability tells us that all business decisions should be socially equitable, environmentally responsible, and financially viable.

A common, but quickly changing, misconception among some executives is that sustainability costs too much and that social and environmental issues are the responsibility of governments and the non-profit sector.

Considering how issues from climate change to human rights violations impact business, this misconception is an increasingly risky management strategy. Instead, research shows that sustainability not only is better for society but also has a positive financial impact when it is incorporated into a company’s core business strategy.

The graphic on the left shows four ways that sustainability can be financially smart for an enterprise, in the short and long term.

According to HBR’s “The Comprehensive Business Case for Sustainability,“ sustainability benefits a wide variety of corporate functions, including competitive advantage, risk management, innovation, financial performance, customer loyalty, and employee engagement.

To see companies at the forefront of realizing the business case for sustainability, check out Barron’s List of the Top 100 Sustainability Companies or the Wall Street Journal’s Top 100 Sustainability Leaders.

Companies that follow the triple bottom line framework in business think about and take responsibility for the impact their operations and products have on people, intended or not. A company focused on the social bottom line internally features sound health care, maternity and paternity leave, fair working hours, and advances diversity and inclusion. Externally, such an enterprise focuses on labor force rights in their supply chain, supplier diversity, and even the impact of investments. The “people” bottom line also focuses on the communities where the company does business. This includes reversing the inequalities that exist in access to education, healthcare, and clean drinking water.

Triple bottom line companies take pains to identify, reduce, or eliminate their ecological footprint. They strive for environmental benefit, recognizing the fact that doing so is the right thing to do and is good business.  But it’s not just about the money. Triple bottom line companies look at the entire life cycle of their operations and products to determine the true environmental cost. They measure this cost by looking at global impacts on issues like climate change, ocean acidification, biodiversity, and pandemics, and locally on resources like water, soil, localized air pollution, and the degradation of natural areas.

One of the most widely adopted responses to these social, economic and environmental drivers are the UN Sustainable Development Goals (SDGs): 17 goals to address global social, economic, and environmental challenges.

The goals are interconnected and intended to be met by 2030. Most businesses and business people serious about sustainability/ESG are familiar with and refer often to the SDGs. Moreover, tools like the SDG Compass have been created specifically to help businesses incorporate the SDGs into their strategy, culture, and operations.

Critique #1: Sustainability is about sustaining the business– attracting employees and customers, accessing new markets, lowering costs and avoiding regulations–and not about making any measurable changes to how it impacts people and the planet.

“What we call ‘eco-business’–taking over the idea of sustainability and turning it into a tool of business control and growth that projects an image of corporate social responsibility–is proving to be a powerful strategy for corporations in a rapidly globalizing economy marked by financial turmoil and a need for continual strategic repositioning…True or ‘deep’ sustainability requires restoring and protecting ecosystems and communities, and not, as every big brand is doing, first and foremost trying to use sustainability to enhance the efficiency of production and the quality of products to speed along growth.” (Peter Dauvergne and Jane Lister, Eco-Business: A Big Brand Takeover of Sustainability, 2013)

Critique #2: Sustainability is a distraction and drain on the profit-making function and legal responsibility of the enterprise

“The business [people] believe that they are defending free enterprise when they declaim that business is not concerned ‘merely’ with profit but also with promoting desirable ‘social’ ends; that business has a ‘social conscience’ and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers.”

“In fact they are—or would be if they or any one else took them seriously— preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.” (Milton Freedman, “The Social Responsibility of Business is to Increase its Profits”, NY Times, 1970)