I’m glad to be hearing more and more people talking about economic sustainability because this means that we are finally getting the necessary public awareness we need to achieve sustainable development. But, what is economic sustainability?
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What is economic sustainability?
Economic sustainability is the economic aspect of sustainable development: the practice of maintaining the profitability of an organization by considering its environmental, social, and financial impact over time. It means that businesses must be able to pave their way in society and make a profit while ensuring they don’t negatively impact the environment or surrounding communities.
This economic sustainability definition also means that businesses need to create products that people want, in ways that protect and preserve the environment and society at large.
By looking at both an organization’s past finances as well as how it will fare in the future (through forecasting), it is possible to evaluate if a business is economically sustainable today or if there are areas where improvement can be made in order for them to remain so tomorrow.
What does “sustainable” mean?
The adjective sustainable comes from sustenance: food and drink we need to live day-to-day lives as humans on Earth.
A sustainable economy would be one where people continue living normal lives without having to worry about running out of things like food, electricity, or other goods.
In other words: an economy where everyone has access without worrying too much about whether supplies will run out soon enough that they won’t be able to afford them anymore.
From the linear model to the circular economy
The concept of economic sustainability came about in response to a growing realization that our current linear economic system isn’t sustainable; at some point, we’re going to run out of natural resources.
This is where the new model of the circular economy comes into play. In the circular economic model, the natural resources are recycled through the system rather than ending up in a landfill. This can allow indefinite economic growth without depleting the natural resources of the planet.
Economical sustainability isn’t just about improving your company anymore; it’s also about maintaining it so that you can keep doing business in the future!
The first step toward achieving this goal is recognizing that there is a problem.
Why is economic sustainability important?
Economic sustainability is important because it is the key to long-term economic growth.
Economic sustainability helps protect the environment, improve the quality of life for people in the community and create jobs. It also helps boost productivity among corporations and reduce waste, thus promoting social and environmental responsibility, as well as accountability among corporations.
Together with environmental and social sustainability, economic sustainability is one of the 3 pillars of sustainability (also known as the triple bottom line, the 3 principles of sustainability, or the 3 Es) and it’s one of the cornerstones of sustainable development.
Economic sustainability is essential for sustainable development and to reach the 2030 UN sustainable development goals (SDG). Because without a healthy economy is also impossible to achieve most of the social and environmental sustainability goals we are aiming at.
How to achieve economic sustainability?
There are many ways to achieve economic sustainability, but ultimately, it is down to the efficiency of the business. Efficiency in business means producing the same or more by using fewer resources.
A more efficient and sustainable economy can be obtained with many sustainable business practices also explained in the 6 Rs of sustainability, for example:
- Recycle waste: The aim is to get the benefits of recycling by reducing the amount of waste sent to landfill sites and use what you have wisely so it doesn’t end up in a landfill site where it will stay forever.
- Recycle energy: The aim is to use less energy from fossil fuels such as coal or oil so that we don’t run out because there isn’t enough left on Earth anymore.
- Reuse water: Using water more than once, saving water for crops/animals which need it.
- Reduce waste: This can be done by reducing the number of new materials used, reusing materials or recycling them.
- Reduce consumption: making products last longer, then repairing and reusing them.
- Reuse materials: For example, using the same material to make something else instead of buying new material.
However, going more at a macro level, the big players to achieve economic sustainability in business are:
- Industry 4.0 and sustainable manufacturing – industry 4.0 technologies offer huge benefits for manufacturing. In fact, thanks to their correct implementation are possible to dramatically improve productivity and business efficiency.
- Conscious economic decision making – By giving priority to environmentally conscious economic development.
- Prefer eco friendly products and services – like in finance and investments, where ESG metrics (Environmental, social, and governance) are becoming more and more important, businesses should give preference to green products and services. ESG and sustainability go hand in hand but are not the same thing.
Let’s learn more about those 3 important ways to achieve economic sustainability.
Economic sustainability examples in business
Here are some examples of economic sustainability in business!
1. Industry 4.0: Improve the efficiency of the business
Industry 4.0 technologies are the latest in automation and data collection and analysis. They can help companies increase efficiency, achieve economic sustainability, and improve overall business performance.
With industry 4.0 digital transformation technologies, companies can increase efficiency and sustainability. These fourth industrial revolution technologies offer many benefits and are designed to help reduce waste and improve profitability by using data collected during production processes.
Data centers use the latest machine learning and artificial intelligence algorithms to analyze this data and provide insights into what needs to be done next.
An interesting example of economic sustainability without a doubt!
2. Conscious economic decision making
Sustainable development is a term that encompasses numerous issues, including poverty reduction and environmental protection. Sustainable economic development, then, means that the economy does not have a negative effect on society and the environment.
To do so means considering both economic and environmental factors when making decisions about your business. For example:
- How does this project or decision impact our company’s ability to meet its financial goals in the long term? How will it affect our employees’ quality of life and health? What will be its impact on society at large?
- Is there an alternative way of doing things that causes less harm to people or the environment? Can we find ways to use fewer resources (like water) while still producing good results for our customers/community etc.?
- Are there ways we can cut costs without cutting corners—for example by using recycled materials as much as possible instead of buying new ones every time we need something made?
Every business leader aiming at economic sustainability should be making those considerations before taking any important decision.
3. Prefer eco friendly products and services
Both as a company and as a consumer, you should prefer to work with green technology companies, as well as eco friendly products and services. This means that you should try to:
- Reduce the use of natural resources, such as water, timber, and minerals.
- Reduce the amount of waste produced in your business.
- Increase the use of renewable resources, such as wind and solar power (see also: questions to ask a solar company beforehand) instead of fossil fuels like oil. This reduces the impact on the environment from mining, drilling, and extraction processes used to obtain these resources. It also helps to reduce global warming by reducing greenhouse gas emissions.
- Reduce toxic materials in products or services offered by your company through careful and sustainable product design. Ensure that only safe materials are used whenever possible without sacrificing quality or function.
- Reduce energy consumption by using energy-efficient products throughout all aspects of your operation when possible.
- Conscious hazardous waste disposal. Do not dispose of hazardous wastes without first checking with local authorities about how best to dispose of them safely. So they don’t harm people or animals nearby
- Reduce packaging materials and use recycled cardboard wherever possible.
conscious today, economic success tomorrow
Economic sustainability is one of the most important factors to consider when making decisions about your business. Whether you’re a solo entrepreneur or the leader at an international conglomerate, making sustainable and conscious economic choices today can help pave the way for economic success tomorrow.
Let’s look at industry 4.0 technologies as an example: these tools combine digitalization and automation in manufacturing processes to create more efficient and streamlined workflows. By using them, you can reduce waste while creating higher-quality products, which is good news for both your bottom line and our planet!
So how do we balance environmental interests with those of businesses? It all comes down to striking a balance between human, social, environmental, and economic goals. This is the core of the 4 pillars of sustainability framework to reach sustainable development.
Conclusion
Now that you know what economic sustainability for a business is, it would also be interesting to go deeper also on the other pillars of sustainable development. To do so, you can check the best social sustainability examples, as well as environmental sustainability examples and examples of sustainable development.
Here’s a quick summary of economic sustainability:
- A business must be profitable to be sustainable
- Making environmentally and socially conscious choices is key to achieving economic sustainability
- Economic sustainability can be reached by improving business efficiency and leveraging new technologies
Following this can help you achieve economic sustainability so that your business will be able to thrive in the future.
