There is no universally accepted definition of sustainability. Various terms and definitions pertaining to sustainability (such as “corporate responsibility”, “corporate citizenship”, “sustainable development”, “ESG”, “CSR”, “triple bottom line”) have emerged in the past few decades and have been used differently in various contexts, but essentially they all serve a common purpose. The most widely used definition globally is that developed by the Brundtland Report of the United Nation’s World Commission on Environment and Development, in 1987. It describes sustainable development as:
‘Development that meets the needs of the present without compromising the ability of future generations to meet their own needs’1
Stakeholder pressure and changing market conditions (refer to “Why Is Sustainability Important”) are pushing more organisations to find new ways of doing their business in order to remain competitive and prosper in the long term. Some may wonder whether being sustainable means an organisation needs to sacrifice its bottom line. Case studies and research have shown that being sustainable is beneficial to the long term performance of business. Please refer to “Benefits of Embedding Sustainability” for more information.
CSR is "the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the work force and their families as well as a local community and society at large"2. The common assumption is that the main difference between sustainability and CSR is that CSR focuses on the social aspect of business, however the differences are far more nuanced. CSR comprises contributions made by an organisation to society. It tends to focus on philanthropic activities, and not necessarily address sustainability-related concerns connected to an organisation’s business operations. Sustainability however, is more forward-looking and focuses on managing the organisation’s impacts on the economy, environment and society whilst securing its own future. This means tackling issues such as resource scarcity, ageing populations and economic inequality, all of which not only impact society but also business.
The terms EES (economic, environmental and social) and ESG (environmental, social and governance) are not clearly differentiated and often used interchangeably. EES is commonly considered the 3 broad pillars of sustainability. ESG is a term used extensively, particularly by the investment community, and describes the environmental, social and governance matters that investor consider in the context of corporate behaviour.3
1 World Commission on Environment and Development, "Our Common Future", 1987
2 World Business Council for Sustainable Development, "Corporate Social Responsibility"
3 United Nations Environment Program Finance Initiatives and World Business Council for Sustainable Development, "Translating environmental, social and governance factors into sustainable business value: Key insights for companies and investors", 2010