Clarifying the Meaning of Sustainable Business

TLDR

Sustainability management is widespread, yet studies reveal a disconnect between corporate claims and actual planetary impact, underscoring the need to distinguish effective from ineffective sustainability practices. This article seeks to clarify what constitutes truly sustainable business and how companies can effectively contribute to sustainability challenges. The authors review existing frameworks and propose a typology of business sustainability—Business Sustainability 1.0, 2.0, and 3.0—to guide effective contributions to sustainable development.

Abstract

While sustainability management is becoming more widespread among major companies, the impact of their activities does not reflect in studies monitoring the state of the planet. What results from this is a “big disconnect.” With this article, we address two main questions: “How can business make an effective contribution to addressing the sustainability challenges we are facing?” and “When is business truly sustainable?” In a time when more and more corporations claim to manage sustainably, we need to distinguish between those companies that contribute effectively to sustainability and those that do not. We provide an answer by clarifying the meaning of business sustainability. We review established approaches and develop a typology of business sustainability with a focus on effective contributions for sustainable development. This typology ranges from Business Sustainability 1.0 (Refined Shareholder Value Management) to Business Sustainability 2.0 (Managing for the Triple Bottom Line) and to Business Sustainability 3.0 (True Sustainability).