Economic Sustainability – What Is It and Why Is It Important?
When people hear the term ‘sustainability’, their mind usually goes to actions that work to protect the planet. For example, reducing, reusing, and recycling, parting ways with fast fashion, and planting trees to restore biodiversity.
However, economic sustainability is also an essential part of a thriving, climate-resilient planet. It combines sustainability technology, practices, and tools that make money. Continue reading as we break down everything you need to know about economic sustainability and why it is so important.
What Is Economic Sustainability?
Most people understand economics and sustainability, but when the words are put together, it creates a bit of confusion. Not to worry, though; we’re here to explain it to you.
Put simply, economic sustainability relates to practices that seek to establish the long-term economic development of a country or business while simultaneously managing the social, cultural, and environmental aspects of its activities.
It is a true balancing act where the aim is to achieve economic growth and generate profits without negatively affecting members of society or the planet. You’ll see mentions of economic sustainability in the United Nations Sustainable Development Goals (SDGs). The SDGs consist of 17 goals that offer a road map for governments and countries to establish sustainable and long-lasting growth.
Some of the social issues touched on in the goals include gender equality and fair labour. Meanwhile, some environmental issues within the set of goals are protecting water and air from pollution and encouraging more responsible and conscious consumption of products and services. Economic sustainability involves evaluating the ecological impact of an economic activity.
It is a broad set of business practices and decision-making principles. The ideal scenario is to ensure sustainable development that creates systems that consume natural capital or natural resources.
In addition, that it does so slowly enough so that our future generations can utilize these resources. The big principle behind economic sustainability is moving away from short-term processes and acting on the planet’s long-term well-being instead.
Transitioning To a Circular Economic Model
The idea of economic sustainability came about when people began to realize our current economic model is far from environmentally sustainable.
Our current model is the linear model, which means we create products, use them, and discard of them. Unfortunately, this model is not very considerate of the Earth’s resources, and if we continue to follow it, we will run out of natural resources.
By contrast, the circular economic model sees natural resources recycled through systems so they do not enter the landfill. Ultimately, it is all about keeping items in circulation to avoid excessive resource use and conserve so we can protect our planet. This economic model enables indefinite economic growth without depleting our Earth’s natural resources.
This is why we so desperately need to be focusing on economic sustainability. Additionally, it is vital to realize it is not just something to improve your brand’s image.
Economic sustainability is about survival so you can continue doing business in the future. We recognize there is a problem, and now we must fix it. Economic sustainability allows us to seamlessly transition to a circular economic model.
Why Is Economic Sustainability Important?
Economic sustainability is an important issue, especially for businesses. These enterprises cannot achieve long-term growth if they continue to use up human and natural resources.
We can no longer continue to harm the planet and expect long-term and ongoing economic growth. Continuing to do this would destabilize the context in which the business operates.
It’s clear that increasingly businesses are starting to care for the planet and seek to protect it. Consumers today also care about saving the environment, so businesses that embrace this goal too are sure to succeed financially. Ensuring your economic activities are aligned with the planet’s needs also has a lot of advantages for businesses, as well as ensuring a long-term future on the Earth.
For instance, economic sustainability allows businesses to look at their operations and make savings, particularly in relation to waste. Embracing social practices also helps to limit turnover and creates a more positive workplace full of productive team members.
Becoming economically sustainable could also impress governments and clients too and boost customer loyalty which could help you win more business.
We need a sustainable economy for several different reasons. For one thing, our reliance on unsustainable practices will not be able to last forever because the planet does not have an infinite pool of natural resources. Therefore, creating new processes and investing in different resources is absolutely essential for the long term.
Additionally, working to reduce energy consumption and changing our approach to food production will allow us to preserve the Earth for posterity. Our natural environment has also been a source of innovation and discovery for many years.
Allowing climate change to accelerate could jeopardize the opportunity for us to uncover new discoveries for new products and other economic advantages. For instance, processes and compounds.
What Are Economic Sustainability Factors?
Economic sustainability is about using the resources that are available to you responsibly in a way that does not negatively impact the Earth and all living on it. Numerous factors come into play for an economic activity to be deemed environmentally sound. Some of these include the following:
- Local economy
- Market presence
- Return on investment
- Innovation
- Shareholder value
- Growth
- Risk
- Fairtrade
- Profit sharing
- Risk
- Indebtedness
- Business performance
Social and environmental factors should also be taken into account. For example, social justice, indigenous rights, and health and safety. On the environmental side, reducing emissions, tackling water and air pollution, conserving resources, and restoring biodiversity, for instance.
How Do We Achieve Economic Sustainability?
Now that you have a greater understanding of economic sustainability, you are probably wondering how we can achieve it. What it comes down to is the efficiency of businesses.
Efficiency, put simply, refers to producing the same amount of products or more by using fewer resources. In order to achieve economic sustainability, we need to look to the six R’s of sustainability and environmentally-friendly business practices.
We need to recycle our waste efficiently to avoid as much rubbish as possible from entering landfill sites. On that note, we must also use what we have wisely.
It is said that every piece of plastic ever created still roams our Earth. That is a scary statistic. The reason is that it is not biodegradable and takes hundreds, if not thousands, of years to break down.
With plastic too, it only becomes more harmful when it does finally decompose. Adding onto that, we must work to use less energy, especially from dirty resources like fossil fuels.
This will help us conserve resources and ensure we don’t run out. Also, we curb our emissions as we are not pumping harmful gases into the atmosphere. These gases harm the Earth and human and animal health.
Water is also a very precious resource which is why we need to conserve it as much as possible. One way to do this is by reusing water. Many companies are now recycling their water for use in their operations.
Additionally, we must tackle our waste issue at large by reducing our accumulation of waste. These go hand in hand with the last point, but we drastically must reduce consumption and material use. It’s all about being more conscious and taking responsibility.
Examples of Economic Sustainability
Economic sustainability is a practice being adopted globally by businesses and government agencies to reduce their carbon footprint. Let’s take a look at some incredible examples of economic sustainability in action!
1. The Drive For Recycling
Recycling remains an incredibly important eco-friendly practice in 2023. Businesses realize this, and a number of organizations have actually made businesses out of the concept of recycling or, indeed, its counterparts. For example, e-cycling, precycling, upcycling and downcycling.
For instance, online vintage and secondhand shops have made a resurgence, as well as apps that allow users to buy and sell seamlessly. Additionally, some communities have committed to the practice of economic sustainability. Kamikatsu in Japan, for instance, has been working tirelessly on its goal to become zero waste.
Currently, residents here can separate their household waste into a whopping 45 categories. As a result, they are composting food waste and reusing their waste as much as they can. They are also washing plastic items so they can be recycled and will not contaminate other waste.
Economic sustainability is all about reducing waste and meeting the needs of the circular economy. These various platforms help to achieve this by keeping items in circulation and making waste suitable for reuse.
What this means is not as many resources will need to be used to create new items. Instead, the current products will be utilized again without further depleting our Earth’s resources.
2. Tackling Overfishing with Sustainable Fish Farming Practices
Overfishing is having detrimental effects on our beloved oceans. Most see fish farming as the be-all solution to our overfishing problem. However, this approach has its own unique set of problems. For instance, fish farmers must continue fishing in the oceans to feed the fish they farm.
Additionally, the fish they farm is usually a lot less healthy than the fish found in the oceans. So what is the solution here? Sustainable fish farming practices.
As fish farming techniques are constantly improving, we can now transition toward a more economically sustainable method. One of the latest farming techniques under this umbrella involves treating fish waste and then utilizing it as top-quality fertilizer. Then, filtering and reusing the wastewater.
There are lots of other great practices too. Another one is utilizing other ocean resources like scallops, kelp, oysters, and muscles, as well as fish and rotating pens, to establish a more natural growing, healthier environment in the water. These new methods could require more time and money, but the overall environmental impact is much less, and the health of the fish that are farmed is significantly improved.
3. The Rise Of Urban Farming
Urban farming, or as it is otherwise referred to, micro-farming, refers to farming on commercial or residential property of fewer than five acres. It is an easy method for a community to enhance the food security for locals and improve local economic growth while also benefiting the planet.
Urban farms have incredible advantages for the Earth. Some of these include reducing carbon emissions because the food does not have to travel. Additionally, better public health and less use of herbicides and pesticides. When urban farms replace traditional grass yards, farmers make sure they are providing a biodiversity-friendly area and are using fewer resources like water.
Many organisations have cropped up over the past few years that are pushing the idea of urban farming. It not only helps the planet, but this kind of farming also encourages education, connection and community outreach. Overall, this farming method is a much better solution for the planet.
4. Working Exclusively With Green Brands
A final example of economic sustainability in action is when a business or brand works exclusively with other green brands. In other words, solely collaborating with environmentally sustainable suppliers and providers.
How does this have an impact? They, too, are working to reduce their use of natural resources and tackle waste. Therefore, by doing this, you make your supply chain economically sustainable.
This not only boosts your efforts, but you can take inspiration from their efforts too, and ideas on how you can improve. It’s all about taking action and constantly driving small changes that have an impact!
Summary
Economic sustainability is a crucial factor when making decisions regarding your business. We need to strike a balance between our business interests and protecting the planet.
At the end of the day, if we do not make changes, we sacrifice the planet, which greatly impacts our business operations. Now that you understand economic sustainability, we would recommend looking at how you can act more sustainably in your organization.
Each business is different, but everyone can make efforts to conserve resources and reduce waste. The result of this is improved efficiency and reduced costs, as well as becoming more climate-resilient!
