t in since its inception.
Pillar three: The economy and its impacts on business
It is at pillar three, the economic pillar, where we find common ground with most businesses. To be sustainable, businesses must make a profit.
Activities that fit under the economic pillar include compliance, proper governance and risk management.
Let’s consider the oil company Shell as an example to explain pillar three.
Often deemed as ‘evil’, oil companies receive a lot of pressure to reduce the use of fossil fuels and switch to renewable sources. Investment in Shell occurs due to the returns Shell brings. But abruptly dropping fossil fuels will mean losing returns and thus investment. The adoption of renewable energy resources, therefore, has to be slow and incremental.
To achieve a successful balance, Shell has set targets to cut its net carbon footprint by 50% by the year 2050. If Shell meets these targets, Shell will have successfully balanced economic factors to meet the environmental climatic demands of being more sustainable.
Gorging on a finite resource to maximize profit has grave environmental and social costs. Yes, profit is vital for corporate success but it cannot be at the expense of the other two pillars. To truly understand why, read the next section of this article.
A model for sustainability: Three-nested dependencies model
There has been some debate over how the three pillars of sustainability interact with one another. The most accurate model proposed is the 3-nested-dependencies model.
This model represents a co-dependent reality between the environment, society, and the economy.
Human society and our economy are wholly-owned subsidiaries of the environment. Neither can prosper in the long-run without prosperous, healthy surroundings. Beyond the environment, economic success is then driven by the exchange of goods and services. This exchange is determined by social constructs and choices that make up a society. Economic success does not come with fragile, poverty-stricken, despondent communities.
In summary, a