Sustainability is defined as the quality of being able to continue over a period of time and represents a balanced approach to meeting the needs of the present without compromising the ability of future generations to meet their own needs.
The concept, christened as ‘Triple Bottom Line’ and also referred to as ‘Profit, People and Planet’, sits in contrast to the traditional single bottom line whereby the focus was more on profits and shareholder value return.
It was first popularised by John Elkington in his article titled ‘Cannibals with forks’ and took off in the period 1999–2001. It is now incorporated into many reporting standards around the world and is seen as a broader credo of strategic and impactful leadership.
Indeed, investors and consumers are increasingly aware of the environment, and many are prepared to reward companies keen on taking climate action — and to shy away from those that don’t. We have organisations joining initiatives like the UN Global Compact and Principles for Responsible Investment.
Reducing emissions not only makes companies more attractive for today’s climate-conscious investors and consumers, it also boosts competitive advantage, increases resilience in the face of regulatory pressures and rising carbon prices — and saves money.
For example, BlackRock, the world’s largest asset manager, has disclosed that in the past year it voted against directors at 49 businesses for failing to take climate action.
It also put another 191 companies on watch and announced its decision to divest from thermal coal. Notable companies like Enel Green Power and Kenya Electricity Generating Company are big on renewable energy generation.
Sustainability, however, is not only about the environment. It also means social and community development through Creating Shared Value (CSV) initiatives, otherwise known as social licence to operate. It is not a mere compliance aspect, not a good to have but must have for corporate success.
Under Polman’s leadership, Unilever launched the ‘Sustainable Living Plan’, a bold triple bottom line vision which aimed to halve the company’s carbon footprint and increase its social impact whilst also doubling sales and increasing long-term profitability. When Polman stood down from his post in 2019, the Unilever share price stood at $42 – a rise of 350 percent since the start of his tenure.
Commenting on the plan, he had this to say: ‘‘We are at a turning point in history, a point where we all need to change for human life on the planet to continue to prosper. A new business model with sustainability at its heart is vital for quality of life around the globe to improve.
Only businesses that grasp this will survive. Only those who grow sustainably will thrive.’’
