Sustainability: What It Is, How It Works, Benefits, and Example

Key Takeaways

• Sustainability means maintaining economic, environmental, or social processes over time without using up natural resources.
• It comprises three pillars: economic, environmental, and social sustainability, aimed at profits, planet, and people.
• Businesses often adopt sustainable goals such as reducing environmental impact and boosting social equity, but can face challenges like accusations of greenwashing.
• Sustainable practices can lead to financial benefits, such as reduced costs and improved company image, appealing to investors.
• Implementing sustainability involves identifying weaknesses, setting measurable goals, and continuously assessing results.

Sustainability is the ability to maintain or support a process over time. It is often broken into three core concepts—economic, environmental, and social—where many businesses and governments commit to goals, such as reducing their environmental footprints and conserving resources. Some investors embrace sustainability investments, known as green investments.

What Is Sustainability?

In the broadest sense, sustainability refers to the ability to maintain or support a process continuously over time. In business and policy contexts, sustainability seeks to prevent the depletion of natural or physical resources, so that they will remain available for the long term.

How Sustainability Works

Accordingly, sustainable policies emphasize the future effect of any given policy or business practice on humans, ecosystems, and the wider economy. The concept often corresponds to the belief that without major changes to the way the planet is run, it will suffer irreparable damage.

As concerns about anthropogenic climate change, biodiversity loss, and pollution have become more widespread, the world has shifted to embrace sustainable practices and policies, primarily through the implementation of sustainable business practices and increased investments in green technology.

3 Pillars of Sustainability

The idea of sustainability is often broken down into three pillars: economic, environmental, and social—also known informally as profits, planet, and people.

In that breakdown, the concept of “economic sustainability” focuses on conserving the natural resources that provide physical inputs for economic production, including both renewable and exhaustible inputs.

The concept of “environmental sustainability” adds greater emphasis on the life support systems, such as the atmosphere or soil, that must be maintained for economic production or human life to even occur. In contrast, social sustainability focuses on the human effects of economic systems, and the category includes attempts to eradicate poverty and hunger, as well as to combat inequality.

In 1983, the United Nations (U.N.) created the World Commission on Environment and Development to study the connection between ecological health, economic development, and social equity. The commission, then run by former Norwegian prime minister Gro Harlem Brundtland, published a report in 1987 that has become the standard in defining sustainable development.

That report describes sustainable development, or the blueprint for attaining sustainability, as meeting “the needs of the present without compromising the ability of future generations to meet their own needs.”

Exploring Corporate Sustainability

In business contexts, sustainability refers to more than just environmentalism. Harvard Business School lists two ways to measure sustainable business practices: the effect a business has on the environment, and the effect a business has on society, with the goal of sustainable practice being to have a positive impact on at least one of those areas.

Important

Corporate sustainability emerged as a component of corporate ethics in response to public concerns of long-term damage caused by a focus on short-term profits.

This view of responsibility encourages businesses to balance long-term benefits with immediate returns, and the goal of pursuing inclusive and environmentally sound objectives. This covers a broad array of possible practices. Cutting emissions, lowering energy usage, sourcing products from fair-trade organizations, and ensuring their physical waste is disposed of properly and with a smaller carbon footprint would qualify as moves toward sustainability.

Companies have also set sustainability goals such as a commitment to zero-waste packaging by a certain year, or to reduce overall emissions by a certain percentage.

Many corporations have made such sustainability promises. For example, Walmart Stores Inc. (WMT) has pledged to reach zero emissions by 2040. Morgan Stanley (MS) has pledged net-zero “financed emissions” by 2050.

The push for sustainability is evident in areas such as energy generation as well, where the focus has been on finding new deposits to outpace the drawdown on existing reserves. Some electricity companies, for example, now publicly state goals for energy generation from sustainable sources such as wind, hydropower, and solar.

Because these policies tend to generate public goodwill, some companies have been accused of greenwashing, the practice of providing a false impression that makes a business seem more environmentally friendly than it is.

The trend of reshoring—returning production and manufacturing of goods to a company’s original country—can also contribute to sustainability. Examples include a reduced carbon footprint via shorter supply chains.

Overcoming Challenges in Business Sustainability

The switch to sustainability can be difficult. The Santa Fe Institute outlines three major impediments for firms seeking to improve their environmental impacts: First, it is hard to actually understand the impact of any individual firm. Second, it is difficult to rank the environmental impact of some activities. Finally, it is difficult to predict how economic agents respond to changing incentives.

One sustainable investing survey finds that more than three-fourths of investors say companies should build sustainable supply chains, and almost three-fourths say companies should incorporate sustainability into their corporate strategies.

Not everyone concerned with investments shares the enthusiasm. In March 2025, for instance, the U.S. Securities and Exchange Commission (SEC) under President Donald Trump’s administration voted to end its legal defense of its Climate-Related Disclosure Rule, which would require large publicly traded companies to disclose climate action, greenhouse gas emissions, and the financial impacts of severe weather. The SEC had adopted the rule just one year earlier under President Joe Biden’s administration.

Then in June 2025, the SEC withdrew a proposed rule that would require enhanced environmental, social, and governance (ESG) disclosures from investment advisors.

ESG investing has also seen challenges, with open-end and exchange-traded funds suffering losses and six major U.S. banks—Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo—withdrawing from a net zero banking alliance sponsored by the U.N.

The Benefits of Embracing Business Sustainability

In addition to the social benefits of improving the environment and elevating human needs, there are also financial benefits for companies that successfully implement sustainability strategies. Using resources sustainability can improve the long-term viability of a business concern, just as cutting waste and pollution can help a company save money.

For example, using more efficient lighting and plumbing fixtures can help a company save on utility bills, as well as improve its public image. There may also be government tax incentives for companies that adopt certain sustainability practices.

Sustainability can also make a company more attractive to investors. A 2024 KPMG study showed that 59% of survey respondents are willing to pay a premium to invest in a firm that demonstrated high ESG maturity aligned with their ESG priorities. A 2024 Journal of Business Research paper, on the other hand, revealed that firms pay higher dividends to mitigate potential damage due to being perceived as exercising a negative social impact.

Based on interviews with senior executives across 43 global investing firms, the Harvard Business Review has argued that the perception among some business leaders that ESG issues are not mainstream in the investment community is outdated.

The “sea change” in investor attitudes described by the Harvard Business Review draws on the increased commitments of investors. The Principles for Responsible Investment, a U.N.-supported effort to bring these issues into investing, had 63 investment companies with $6.5 trillion in assets under management that committed when it launched in 2006. As of March 2024, it had over 5,300 companies with $128.4 trillion in assets.

Warning

While it’s tempting to support companies that seem environmentally friendly, some companies are less sustainable than they seem. This use of misleading advertisements or branding to create a false impression of sustainability is sometimes called greenwashing.

Developing a Sustainable Business Strategy

Many corporations are seeking to integrate sustainability practices into their core business models. Companies can adopt sustainability strategies in the same way that they develop their other strategic plans.

The first step to integrating sustainability practices is to identify a specific weakness or shortcoming. For example, a company might determine that it generates too much waste, or that its hiring practices are causing harm to the surrounding communities.

Next, the company should determine its goals and identify the metrics it will use to measure its achievements. A company might set an ambitious target for reducing its carbon footprint or set a specific percentage goal for diversity hiring. This will allow the company to determine objectively if its goals have been met.

The final step is to implement the strategy and assess its results. This requires continuous reevaluation, as a company’s goals may change as the company grows.

There are some common pitfalls for companies aiming for sustainability. One of them is the knowledge-action gap: Even though many executives set sustainability as one of their core business values, few of them take concrete actions to accomplish sustainability objectives.

Another is known as the compliance-competitiveness gap. While improving sustainability metrics can make a company more competitive in the market, these goals should not be confused with the mandatory compliance requirements that a company must adhere to. While sustainability is desirable, compliance is mandatory.

A Practical Example of Sustainability

An interesting example of a successful sustainability strategy is Unilever (UL), the parent company of Dove soaps, Axe body spray, Ben & Jerry’s Ice Cream, Hellmann’s mayonnaise, and many other familiar brands. In 2010, the company implemented the Unilever Sustainable Living Plan, a 10-year blueprint for reducing the environmental impact of its brands while providing a fairer workplace.

By the end of the Unilever Sustainable Living Plan, the company was able to announce major achievements in improving its environmental footprint as well as the company’s bottom line. By working to conserve water and energy, the company was able to save more than 1 billion euros between 2008 and 2018. Moreover, by creating more opportunities for women, Unilever also became the preferred consumer goods employer for graduate students in 50 countries.

In 2024, Unilever followed up its Sustainable Living Plan with four priority areas of sustainability—climate, livelihoods, nature, and plastics—in its Growth Action Plan 2030.

What Are the 3 Principles of Sustainability?

What Activities Promote Sustainability?

What Is Economic Sustainability?

What Are the Most Sustainable Companies?

What Products Are Not Sustainable?

The Bottom Line

As consumers become more environmentally conscious, more companies and businesses are finding ways to reduce their impacts upon the planet and their community. Sustainability practices allow companies to highlight their social benefits while continuing to attract customers.