What’s in a name?
Sustainability or… something else? What do these terms really mean?
Sustainability is pretty complicated at the best of times. Even the term can provoke some debate- I'm sure if you asked ten people to define ‘sustainability’ you’d get 10 different answers. This tends to be my go-to description for the industry I work in, however it still causes some confusion. For some, it can just mean how a business plans to be around in the future (and here, environmental and social issues still play a large part, though it’s not always assumed).
There are a myriad of other ways of talking about this subject and they all broadly mean the same thing, although of course there are nuances.
Here’s a whistle-stop tour of some of the terms you may have heard and how they differ:
Sustainability
Sustainability is probably the most ‘catch-all’ term of the lot, which is why I tend to use it. When speaking with businesses, I talk about sustainability in every sense of the word, which covers both environmental and social sustainability, and economic sustainability; that is, ensuring the company in question is still around in 10 years’ time. In order to do that of course, it needs to engage in environmental and social sustainability, and focusing on the ‘triple-bottom-line’ of people, planet and profit.
In a nutshell, sustainability refers to practices and strategies that meet present needs without compromising the ability of future generations to meet their own needs. It encompasses environmental health, social equity, and economic viability; and done well it balances the three.
The UN Sustainable Development Goals provide a good overview of all the areas encompassed by sustainability as a term – allowing for the fact of course, that not all businesses – or individuals for that matter – will necessarily face into all 17.
ESG
ESG refers to specific standards used to evaluate a company's operations in three areas: environmental impact, social responsibility, and governance practices. ESG metrics help investors assess how well a company manages risks and opportunities related to these areas, often influencing investment decisions. For these reasons, ESG is often used for businesses communicating or reporting at a corporate level.
While sustainability is a broad, over-arching concept focused on long-term environmental balance and social well-being, ESG provides a more structured framework for evaluating and measuring specific aspects of a company's performance related to sustainability.
Impact
Impact is a more general term, but it feels extremely pertinent; referring to the effects or changes resulting from business operations, actions or initiatives.
The language – and thinking - around impact has changed over the last few years; from a focus on companies minimising their impact or having a ‘less bad’ impact – to them creating a positive impact, through creating positive social, environmental, or economic outcomes.
Impact assessment measures how effectively actions achieve their intended goals. This therefore gives impact-minded businesses a strong focus on outcomes, centred on driving action and measuring results – and a culture of continuous improvement.
B Corp businesses are required to produce an annual ‘impact report’ which contains “Details of anything performance or operations-related that may significantly affect your social and environmental impact now and in the future.”.
Purpose
Purpose is the fundamental reason an organisation exists beyond making profits – the "why" behind its existence and strategy. It reflects the company's core values and mission; and should also speak to its commitment to contributing positively to society in some way.
A ‘true’ purpose-driven company aligns its business practices with its values and broader social goals.
Purpose provides the guiding principle that drives sustainable and impactful initiatives, effectively providing the ‘why’ to sustainability’s ‘how’ and impact’s ‘what’.
CSR
I’ve kept this on the list as while it has fallen out of fashion a little, it’s still used a fair bit in larger businesses. CSR is effectively a subset of sustainability, focused on the ‘voluntary’ actions a company takes to be socially responsible. It usually focuses on specific initiatives and programs and is, by its nature, more short-term in its thinking.
CSR tends to be more centred on social above environmental, and especially on business’s role within its communities, reflecting the company's commitment to ethical behaviour and contributing positively to society.
‘Better’
I’ve included this, as it isn’t a universal alternative to sustainability but it does do a job for businesses – in terms of taking action on key issues with a view to being ‘better’. It therefore can often refer to improved practices, products, or outcomes compared to previous or current standards. In the context of sustainability, "better" typically implies advancements towards more environmentally friendly, socially responsible, or economically beneficial practices.
Whilst it doesn’t have the structure of some of the other terms, as an ambition, it’s pretty solid. The Better Business Act is one example of where ‘better’ is being imbued with more meaning, clearly setting out an ambition for companies to do things differently for the benefit of all.
Green
Another word that’s fallen out of usage somewhat, largely because it can’t be quantified and became over-used by those who really shouldn’t have been using it – giving rise to ‘greenwash’.
‘Green’ is probably best described as another subset of sustainability, specifically focused on environmental actions and impact, and referring specifically to practices, products, or technologies that are environmentally ‘friendly’. Green initiatives often focus on conservation, renewable energy, pollution reduction, and sustainable resource use.
In some ways, it shouldn't really matter what we call it as long as we're all thinking about it and importantly taking action on it. However, there's a lot to be said for a universal understanding of a subject to ensure the challenge – and opportunity – is clear.
