Generating environmental and socioeconomic outcomes is essential to becoming a sustainable business, but it's not enough. Mainstream business sustainability practices are proving insufficient for meeting global goals, especially as we face the triple threat of COVID-19, conflict and climate change. A business is truly sustainable only when it makes an effective contribution to sustainable development. That is, substantial and substantiated positive change that meets real needs.

2 min read | Last updated 11 June 2021

What is a sustainable business? It’s a question that most people can answer, but not fully. Most answers flock around two key themes: having a less negative effect on the environment and having a more positive effect on society. And many businesses are achieving both of these outcomes – they are becoming less unsustainable in some areas and more sustainable in others.

And yet, environmental damage is rising, global warming is accelerating and social progress has slowed. The UN Secretary-General’s 2021 report on SDG progress warns that the sustainable development goals are slipping from our hands:

  • the goal to end poverty by 2030 is out of reach due to COVID-19, conflict and climate change
  • tens of millions of people were pushed into chronic hunger in 2020
  • health services are disrupted in 90% of countries
  • the pandemic has been catastrophic for children’s learning
  • violence against women and girls has intensified
  • refugees in 2020 were at the highest number on record
  • unsustainable production and consumption is driving three planetary crises: climate, biodiversity and pollution
  • human rights have been shattered in some countries
  • and foreign direct investment is expected to drop by 40%, inhibiting recovery.

“Despite real progress being made by the business community, there is clear recognition that action is not measuring up to the size of the challenge.”

Lise Kingo, CEO & Executive Director of the UN Global Compact

It is becoming obvious that generating societal and environmental outcomes is essential to becoming a sustainable business, but is not sufficient for meeting global goals, especially as we grapple with the triple threat of COVID-19, conflict and climate change.

Business sustainability practices deliver good outcomes or reduce bad outcomes, but these changes are almost always measured from the business’s perspective. The resulting impact is not measured. Business outcomes are assumed to drive impact, but their actual impact may not be substantial, may not hit the targeted recipients and may not even be needed. Being a sustainable business is about making an overall effective contribution to sustainable development by delivering substantial and substantiated positive changes where they are needed.

“A business is truly sustainable when it makes an effective contribution to sustainable development.”

Dyllick and Muff, 2015 (pdf)

Global goals are so urgent and important that the 2020s could, should and hopefully will be the most pivotal decade in our careers, if not our lifetimes. No one underestimates the tremendous work required to transition a 20th century corporate into one that’s fit for the 21st century. Yet, the appetite for change and the desire to share learnings and collaborate are incredibly encouraging. Good luck to all businesses on this exciting pathway!