The interest in sustainability has grown over recent years and is shared among a variety of national and international organizations, special interest groups and corporations around the world. Sustainable business practices are becoming a worldwide business requirement. Some of the main sustainability requirements have been stated explicitly by many different organizations. A widely cited definition of sustainability is attributed to the United Nations Brundtland Commission and reads as follows: “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987).
Another set of requirements describes the broader and more specific application of sustainability and can be seen in the ten principles of the UN Global Compact which was enacted in 1999. The ten principles establish a set of core values for organizations to follow and encourage those organizations adopting the principles to influence their partner organizations to subscribe to the principles as well. The ten principles address a set of universal issues in human rights, labor, environment and anti-corruption.
Corporate sustainability starts with a company’s value system and a principled approach to doing business. This means operating in ways that, at a minimum, meet fundamental responsibilities in the areas of human rights, labor, environment and anti-corruption. Responsible businesses enact the same values and principles wherever they have a presence, and know that good practices in one area do not offset harm in another. By incorporating the Global Compact principles into strategies, policies and procedures, and establishing a culture of integrity, companies are not only upholding their basic responsibilities to people and planet, but also setting the stage for long-term success(UNGC). Another example that is widely acknowledged is a set of guidelines for corporate social responsibility (CSR) published by the International Institute for Sustainable Development. The CSR Principles focus on the social dimension and do not align with the full scope of sustainability. The primary area of agreement between the two sets (CSR and The Ten Principles) of principles is the intersection on the environment.
The Concept of Sustainability
- Until recently, sustainability efforts have been centered around the consumer. Consumers made the choice of where and how to buy, to recycle, and how to go about recycling packaging and products at the end of their life cycle.
- Supply chain sustainability is still a relatively new idea. Variation in levels of adoption, maturity, metrics and management differ by nation, industry and company. Within supply chains, partner relationships are often insufficiently integrated for optimal interaction. Nonetheless, supply chains designed to combine rising profit and falling customer costs, while resulting in higher living standards and lower environmental costs, are creating new best practices.
- The Brundtland report pointed out the necessity of the society to create new coordinated strategies among all the stakeholders. However, this generic definition is difficult to apply for companies because it does not provide a solution to determine the future needs. Sustainability requires corporations’ commitment to maintain the integrity of social and environmental systems while undertaking their business operations. In fact, many companies have adopted sustainable practices as a potential source of adding value, reputation building and revenue increase.
Sustainability Explained
Sustainability is a term that is used to describe how to preserve resources or maintain resources. It often associated with things like recycling, using renewable energy like solar and wind power, and preserving natural species like rainfall. Simply put, sustainability has the capacity to endure or continue. If a product or activity is sustainable, it can be reused, recycled or repeated in some form because it has not exhausted all the energy and resources that were used to create it. Sustainability can be broadly described as something that can maintain itself, such as the biological systems. Sustainabilityhas been at the center of international discussions related to trade and development for over two decades. Current explanation of sustainability aims to set any approach to society and environment degradation which allow the human society and economy to grow.
The most widely quoted definition of sustainability comes from the UN Brundtland Commission in 1997 which defines sustainability as “Creating the need of present without compromising the ability of future generation to meet their own needs”. As an example of sustainability, it can be argued that in the past customers bought cola drinks that are contained in aluminum cans and after drinking them, they throwed the empty cans wherever they wanted. Today, such practice is not sustainable.
Sustainability is very often represented by three diagrams suggesting that there are three pillars of sustainability – economic viability, environmental protection, and social equality.
Sustainability is becoming better defined vertically within an organization, and better defined horizontally in terms of metrics, measurements and standards globally across industries. Sustainability is becoming more integrated with other traditional supply chain operations processes due to related innovation, new technologies, new processes and stakeholder preferences. Lean management and sustainability are a natural combination, but there will be further innovation in the way service standards or supplier performance integrates with sustainability.
Definition of Sustainability
Sustainability has been at the center of international discussions related to trade and development for over two decades. In 1987, the UnitedNations World Commission on Environment and Development (World Commission) provided what has become a widely-used definition saying sustainability is the ability of society to “[meet] the needs of the present without compromising the ability of future generations to meet their own needs.” Yet, this is not a new idea to humanity. The focus on future generations is longstanding among indigenous people of the Western Hemisphere. The Great Law of the Iroquois states, “In our every deliberation, we must consider the impact of our decisions on the next seven generations.
For example, supply chain sustainability interacts with almost every supply chain component, whether in simple or complex supply chains. Supply chain sustainability practice should be a consideration in decisions involving strategy, tactics, goals, processes, trade-offs and outcomes in all levels of supply chain management. In fact, senior management is by far the best single influence to supply chain sustainability practice. The customer is the second largest influence, and employees are the third largest influence. Triple bottom line sustainability may intersect with risk or strategy practice in addressing long-term uncertainty in the availability of people, markets and resources necessary for lasting business success.
The objective of supply chain sustainability is to create, protect and grow long-term environmental, social and economic value for all stakeholders involved in bringing products and services to market. Through supply chain sustainability, companies protect the long- term viability of their business and secure a social license to operate.
At every stage in the life-cycle of specific products there are social and environmental impacts, or externalities, on the environment and on people. In addition, governance, or the accountability of organizations to their stakeholders for their conduct, is important at every stage throughout the supply chains
Key Drivers of Sustainability
- Competition for Resources – The world’s population is projected to increase to more than 9 billion people by 2050. Rising living standards will result in both expanded markets for goods and services and unprecedented demands on the planet’s natural resources.
- Climate Change – Our current fossil-fuel based economy has led to a growing concentration of greenhouse gases in the atmosphere that is driving more extreme weather events, more severe and frequent cycles of drought and flood, and rising sea levels
- Economic Globalization – The integration of national economies into the global economy brings opportunities for business, but often with significant risks.
- Connectivity and Communications – Advances in digital communication over the last two decades have reduced not only the time it takes to build a reputation, but also the time it takes to destroy one.