Introduction to Sustainable Business

Sustainability and managing a business that works to contribute to sustainability requires a different perspective than many businesses currently have. Most businesses focus on profits, often with a short-term, annual, or even month-to-month focus. Sustainable business practices require a longer term and a systems perspective on how a business organization's actions impact the environment and society. It requires business managers being mindful and considering not only the traditional business concerns, such as revenues, costs, and profits, but also the effects their actions have on the physical environment and the well-being of future generations.

A systems approach can provide an important perspective on sustainability matters. Societal well-being and the sustainability of societal resources are interrelated and relevant for individual businesses and industries as well as for individuals, cities and towns, nations, and the entire planet. For example, on a local community scale, a resource-dependent community economy (e.g., a fishing community in Newfoundland, Canada) cannot achieve economic sustainability if it depletes its most valuable local natural resource - fisheries. On a global scale, global economic activity (by all individuals, households, and businesses collectively) that contributes significantly to greenhouse gas emissions and global warming cannot be sustained if natural resources and human population and health are adversely affected and not sustained.

Starting with the most simple systems perspective we can consider the interdependence between a single company and society as taking two main forms. Every firm impacts society through its operations in the normal course of business - for example, McDonald's with its packaging and BP with its oil drilling. These are called "inside-out" linkages. Then there are "outside-in" linkages with external environmental and societal conditions influencing businesses. For example, McDonald's depending on the supply of food and BP depending on the oil supply.

Another way of thinking about this system is to first think about the consequences of business, for example, how each business affects the economy, the natural environment, and the people (e.g., consumers and employees), and then to think about the context in which businesses operate in, including the natural, human, and social resources businesses depend on to operate and the legal and regulatory context businesses operate in. Systems thinking would have businesses be mindful and considerate of their operating context and consequences. And systems thinking could help business managers consider how the consequences (outcomes) of their activities affect the context in which they operate in the long term. So for example, if a timber company is depleting a forest it owns, it can think about how this will affect its operating context including its supply costs in the future.