Economics/Business

Why is economic sustainability important/definition/main challenges

Economic and environmental sustainability is a hotly debated agenda these days, mainly because of the various and worrying predictions about environmental impacts and the scarcity of natural goods. In October 2018, an Intergovernmental Panel on Climate Change report portrayed a bleak future in the absence of significant global efforts to reduce carbon emissions.

The panel concluded that the world needs to reach “net zero emissions” — a state in which all human-induced carbon dioxide emissions are neutralized by removing the same amount of this gas from the atmosphere — by 2050. 

However, anyone who thinks that this idea is linked only to the political sphere and responsibility is wrong. In reaction to this news, expectations for organizations to make climate-relevant commitments have increased significantly. A Deloitte survey found that around 60% of companies feel more pressure from stakeholders to create and disclose plans that address climate risks.

Several segments are concerned with the effects of their production processes and increasingly seek to insert into their processes this global mentality provided by the digital transformation for a development that takes into account environmental and social issues, through sustainable business management . 

Therefore, we have prepared this text for you to understand more about economic and environmental sustainability in business. Keep reading!

The economic sustainability

Economic sustainability translates into the possibility of equal distribution, production and use of the wealth created by human beings, supported by secure and stable structures. Thus, this concept provides a new paradigm that aims to overcome the view of the economy as an end in itself and man as a tool for social use.

In other words, this sustainability in companies seeks to focus on quality and tries to offer well-being to society. It inserts some limits for development, after all, if growth depends only on the exaggerated use of natural resources, they will certainly end one day. That is why it is essential to preserve the environment.

Thus, economic sustainability means that one should think about economic processes in a more responsible way. A long time ago, even before this discussion started, financial results were notably what mattered in business.

Over time, this thinking has evolved, and today, many companies are looking for ways to grow economically while having less environmental impact or committing to important climate-related goals. Some strategies involve, for example, saving resources, reducing carbon emissions, using electronic signatures and digitization to reduce the consumption of paper, recyclable raw materials, among others.

What is the relationship between economic and environmental sustainability?

There is no way to talk about economic sustainability without linking it to the environmental concept. It is for this reason that the expansion of business to the environment has created many discussions these days. The economy initially seeks profitability without considering ecological principles – it works in a model considered linear.

However, in recent years, the great problem of this outdated system of producing without taking into account environmental issues has been noticed, since unbridled production harms the entire ecosystem due to the destruction of natural resources that are the foundation of production itself, in addition to to impact society and the future of the world.

This is a very important factor that, by itself, justifies the need for economic policies aimed at preserving the environment. The creation of environmental legislation, the concern with the effects of industrial processes, all this seeks to reinforce the requirements and validate the penalties for companies that fail to comply with the new global understanding, which is to consider environmental sustainability in business.

How important is economic sustainability for companies?

The importance of sustainable development is linked to the conservation of natural resources for the next generations. Nowadays, it is a fact that there is a negative impact on the natural environment when it comes to productive activity. Our society is based on the high consumption of natural inputs.

In this way, a scarcity of natural resources begins to supply all the demand, since there is no balance between industrial production and resource generation. In addition, several components of nature are finite and, therefore, it is essential that the whole society becomes aware and seeks new alternatives to promote sustainable development.

What are the main challenges of having a sustainable company? 

Nowadays, it can be mentioned that the biggest challenge related to sustainable development is the awareness on the subject, since it is still seen with a lot of suspicion about its benefits, both by companies and by the Government.

This conception means that there are still many destructive actions, such as incorrect waste disposal, pollution, deforestation, greenhouse gas emissions, etc., overloading nature with materials that can take hundreds or even thousands of years to decompose and permanently compromise. the fauna and flora.

The performance of some companies is an example of this. They cannot balance their economic claims with the necessary environmental preservation. And this fact comes up against another setback: the fragility in the inspection of environmental standards by government agencies.

Although our country has advanced legislation on the subject, it is often not applied correctly, mainly due to the flawed inspection structure. These difficulties demonstrate that society still needs to go a long way to effectively solidify sustainable development.

Tips for a more sustainable company

There are several ways to make a company sustainable with methods ranging from waste collection processes to the insertion of technological equipment with low levels of emissions. Therefore, some actions are important. See some of them below.

Promote process transparency

One of the concerns of sustainable companies is the social impact caused by their activities. Thus, it is essential to maintain transparency of its activities to the public, which means that the organization must demonstrate to those involved all the results achieved by its work, its carbon emissions, the influence of business activities in the communities in its surroundings, and among other aspects.

Avoid using paper

In sustainable development, documents and archives, for example, could be digitally replaced. This means that the company can transfer everything that was allocated on paper to virtual servers, using document scanning . Another point that drastically reduces the use of physical documents is the electronic signature , which is much more secure and effective these days, and cloud computing technologies – capable of saving time and physical space for document storage.

Train your team

For the company to become sustainable, the training of employees and leaders is an essential process: your team must have the necessary knowledge about the value and effectiveness of actions aimed at environmental preservation and put them into practice – so invest in training , lectures, announcements and even internal teams specialized in the agenda.

The importance of sustainable business management

One way to put the above and too many practices into the company’s daily life and make it more sustainable is to ensure that the organization has sustainable business management . 

Sustainable business management allows organizations not only to focus on reducing environmental impact and contributing to the social development of communities, but also to sustain themselves over time in a healthier way – all at the same time.

We recently developed a guide with tips to implement the concept of sustainability in your business management. The eBook contains the answers you need to overcome the challenges of building a cleaner, more sustainable and healthier company.

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