Understanding Sustainability: Key Concepts and Practices

Posted on Feb 19, 2025 in Economy

Understanding Sustainability

Sustainability is a balance between:

  • Social equity: People.
  • Environmental protection: Planet.
  • Economic development: Profit.

Global citizen is the umbrella term for social, political, environmental, and economic actions of globally minded individuals and communities on a worldwide scale.

Sustainability:

  • Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
  • Improving the quality of human life while living within the capacity of supporting ecosystems.
  1. SOCIAL RESPONSIBILITY

Responsibility of an organization for the impact of its decisions and activities on society and the environment through transparent and ethical behavior.

  • Contributes to sustainable development including health and welfare of society.
  • Takes into account the expectations of stakeholders.
  • Obeys applicable law and is consistent with international norms of behavior.
  • Integrates throughout its organization and practiced in its relationships.

CSR – Corporate Social Responsibility, takes into account: People – Environment – Companies.

Ethics in a company means: mission, vision, and values. Ethics enters into every aspect of sustainable business, such as quality standards, honest payment terms for both customers and suppliers, staff relations, and tax returns to mention only some of them.

  • Milton Friedman – 1970 – stated that businesses have no obligation other than to maximize profits for their owners or shareholders. The manager has a responsibility to do what the owner says.
  • Alex Michalos – 1995 goes beyond maximizing profit calling it the “loyal agent’s argument”. The manager has to be a loyal agent of his or her employer and therefore has a duty to serve the employer. The manager has a responsibility to do what the employees say.
  • A.V Carroll – 1991 – (Most important) stated 3 categories in a pyramid for the responsibilities of businesses:
    1. Economic Responsibilities: must achieve satisfactory financial results.
    2. Legal Responsibilities: must abide by the nation’s laws and regulations.
    3. Discretionary (not mandatory) Responsibilities: the company may elect in order to meet the expectations of some of its customers or society. We think about other people, employees, owners, managers, etc.
  1. Corporate Governance

The goal is to create trust and transparency, which is necessary to support the structure; otherwise, it is not good governance. We must guide and give feedback as a basis.

Definition: Corporate governance refers to the amalgam of processes, customs, policies, laws, and institutions by which companies are directed, administrated, and controlled.

OECD – Organization for Economic Cooperation and Development. The OECD defines corporate governance as the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as shareholders, board members, managers, employees, and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs.

Principles of Corporate Governance:

  • Ensuring the basis for an effective corporate governance framework.
  • The rights of shareholders and key ownership functions.
  • The suitable treatment of shareholders.
  • The role of stakeholders in corporate governance. You have to decide.
  • Disclosure and transparency. How much info are we giving? The more information you give, the stronger you are = nothing to hide.
  • The responsibility of the board. Democracy, gender equity.

Sustainability goes on:

  • Countries: regulations.
  • Corporations: certifications.
  • Individuals: knowledge of our actions.

The 3 main resources in sustainability are: water, food, energy.

The UN Conference on the Human Environment took place in 1972 and created the World Commission on Environment and Development (WCED).

The WCED produced in 1987 (first definition of sustainability) the Brundtland Report that defined sustainability as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

We have to revise our position in and towards the environment but also to revise the position of the rich areas towards the poor areas on the planet.

  1. Economic growth vs. economic development

Long term – Short term

Structure

  • Economic growth: GDP what the country is able to produce in one year.
  • Economic development: Internal changes in the structure of the economies – who countries are investing in gender equity.
  1. CLIMATE CHANGE causes
  • Industries are growing = climate change. Northern countries create and the more affected are southern countries.
  • Human activity: greenhouse gases: increase in temperatures.
  • Increases in ocean temperatures and global sea levels.
  • Melting of polar ice caps.

Kyoto Protocol

International agreement linked to the United Nations Framework Convention on Climate Change (UNFCCC), which commits its Parties by setting internationally mandatory emission reduction targets.

Developed countries are mainly responsible for current high levels of greenhouse gases (GHG) emissions as a result of over 150 years of industrial activity.

The Kyoto Protocol was adopted in Kyoto, Japan, on 11th December 1997 and entered into force on 16th February 2005. The detailed rules for the implementation of the Protocol were adopted at the 7th Conference of the Parties (COP) in Marrakesh, Morocco (2001, Marrakesh Accords).

  • 1st Commitment period 2008 – 2012.
    • 37 industrialized countries and the European Community committed to reduce GHG emissions to an average of 5% against 1990 levels.
  • 2nd Commitment period 2013 – 2020.
    • Parties committed to reduce GHG emissions by at least 18% below 1990 levels.

From the second half of the 20th century -> linear economy: take->make->use->waste

more production, more consumption, more waste

Sustainability promotes -> circular economy: take->make->use->reuse->recycle->repair

Sustainable development: Difficulties related to the definition of sustainability show that sustainable development is a complex and multidimensional issue, which has to combine efficiency, equity, and intergenerational equity on economic, social, and environmental grounds.

1992 – The Rio de Janeiro declaration on Environment and Development described sustainable development as long-term continuous development of the society aimed at satisfaction of humanity’s need at present and in the future via rational usage and replenishment of natural resources, preserving the Earth for future generations.

  • United Nations Development Programme (UNDP) has been partnering with people at all levels of society to help build nations that can stand up to crises and drive and sustain the kind of growth that improves the quality of life for everyone.
  • UNDP helps developing countries attract and use aid effectively.
  • UNDP encourages the protection of human rights, capacity development, and the empowerment of women.

UNDP works in three main areas:

  • Sustainable development

The goal is to strengthen capabilities and opportunities to reduce poverty and marginalization – focusing on the most vulnerable and excluded population groups – in ways that are sustainable from economic, social, and environmental standpoints.

  • Democratic governance and peacebuilding

Bring equitable delivery of service to citizens, especially the poor, indigenous and local communities, and reinforce the rule of law and citizen security through the policies, legal frameworks, and strengthening of local governance institutions.

  • Climate and disaster resilience

UNDP’s work is to integrate issues of climate, disaster risk, and energy at the country level.

UNDP established an index to measure the level of human development. Human Development Index (HDI) consists of three components:

  • Health: A long and healthy life. Measured by life expectancy at birth.
  • Education: Knowledge. Measured by adult literacy rate and the combined gross enrolment ratio for primary, secondary, and tertiary schools.
  • Wealth: A decent standard of living. Measured by Gross Domestic Product (GDP) per capita (Purchasing Power Parity)

3 main factors: human development index (education, health, and wealth)

Main countries HDI ranking: Norway, Ireland, Switzerland

  • Other Indexes
  • UNICEF’s “Child-Welfare” Index
  • The UNDP’s “Human Poverty Index”
  • The UNDP’s “Gender Empowerment Measure”
  • Income Gini Index
  • Happiness Index
  1. MDGs to SDGs

The 8 Millennium Development Goals (MDGs), all by the target date of 2015, formed a blueprint agreed to by all the world’s countries and all the world’s leading development institutions.

Most of the goals were not achieved, they were measuring Africa, Asia, Oceania, Latin America and the Caribbean, Caucasus and Central Asia.

  • The 2030 Agenda of Sustainable Development = 17 Sustainable Development Goals (SDG)

    Economic pillar: no poverty, no hunger, good health, good jobs and economic growth, innovation and infrastructure

    Environmental pillar: clean water and sanitation, renewable energy, responsible consumption, climate action, life below water, life on land

    Social pillar: gender equality, quality education, reduced inequalities, sustainable cities and communities, peace and justice, partnerships for the goals