The three pillars of sustainability
The word sustainability has been increasingly used in a myriad of ways and has a context-specific understanding. While the concept itself is not new, it gained prominence after the United Nations' 1987 Brundtland Commission Report that reconciled economic development with the protection of social and environmental balance. According to the Brundtland report (Our Common Future), sustainable development was defined as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". Sustainability and sustainable development, conceptually represented under three pillars - environmental protection, economic development, and social development - has gained widespread prominence. Since then, it has been broadly intertwined with processes and actions of humankind to avoid natural resource depletion and to maintain ecological balance without hindering the quality of life.Why is sustainable development important?
Since the Industrial Revolution began, economic growth has mainly come at the expense of the environment. While economies, population, and resource demand grow continuously, the size of Earth remains the same. As a result, Earth overshoot day - which marks the day that humanity’s demand for ecological resources exceeds the resources Earth can regenerate within that year - is arriving earlier each decade. If humanity continues with this trend, Earth's resources will not be able to sustain its population. It is estimated that the global population will surpass 10 billion people by 2060.Sustainability as a tool helps adapt strategies in a modern world to uplift economies without exhausting natural resources. In September 2015, under the aegis of the United Nations, the 2030 Agenda for Sustainable development and its 17 sustainable goals (SDGs) were adopted by all member states. The goals address the global challenges faced by humanity in all walks of life and aim to achieve a sustainable future for all. Various actors actively contribute to achieving the SDGs; one such example is ESG exchange-traded funds investing.
Putting sustainability into practice
Governments have introduced various financial instruments that aid in long-term investments in sustainable economic activities and projects, supporting the shift to a low-carbon economy. One type of instrument is green bonds that fund climate and environmental projects.In today's competitive world, companies indulge in corporate social responsibility (CSR) initiatives to build a positive image for investors and customers, although most consumers believe corporations are not doing enough regarding most societal issues. A sustainability strategy integrates the policies and practices to create profits, consider the workplace and its locations, and try to be eco-friendly along the entire value chain. Many retailers and brands are rethinking packaging design and materials, and delivery systems to be more sustainable. The sustainability mindset also includes social issues like gender equality, happiness at the workplace, or taking responsibility for the communities affected by the company's activities. Amid growing pressure from investors, companies are increasingly embracing sustainability reporting on a regular basis.