What is sustainable development and why is it important?

Sustainable finance is an investment decision that considers environmental, social, and governance factors. This process leads to long-term investments in sustainable economic activities and projects. 

Finance is a leading factor that can influence sustainable outcomes and change. Climate issues at this late stage can only be resolved at a global level and require the active involvement of businesses and organisations around the world. The financial sector has the power and funding to bring awareness to sustainability issues and develop alternative sustainable practices.

With sustainable finance, economic growth while reducing environmental impact, minimising waste, and reducing greenhouse gas emissions can be achieved.

The Sustainable Development Goals set out by the United Nations aim to provide people with better opportunities without compromising the planet and savouring its natural resources for future generations.

There are 17 sustainable development objectives that address the global challenges faced by developed and developing countries including poverty, climate change, inequality, peace, and justice. They are as follows:

1. No poverty - Over 700 million worldwide still live in extreme poverty.
2. Zero hunger - 821 million people are undernourished, yet one-third of the world’s food is wasted.
3. Good health and well-being - Ensuring healthy lives and promoting well-being for all ages.
4. Quality education - It is estimated that 617 million children lack basic reading and mathematics skills.
5. Gender equality - Support women and girls and ensure their equal rights.
6. Clean water and sanitation - 40 per cent of the population are affected by water scarcity.
7. Affordable and clean energy - Three billion people still lack clean cooking fuel and access to energy-efficient appliances and technology.
8. Decent work and economic growth - To provide younger generations with work opportunities as one-fifth of young people are not in education, employment, or training.
9. Industry, innovation, and infrastructure - To develop basic infrastructure such as roads, water, and electricity in developing countries.
10. Reduced inequalities - The poorest 40 per cent of the population earn less than 25 per cent of global income.
11. Sustainable cities and communities - Encourage biking, walking, and public transport as nine out of 10 urban residents breathe polluted air.
12. Responsible consumption and production - Recycle paper, plastic, glass, and aluminium to sustain current lifestyles.
13. Climate action - The world must act now to stop global warming.
14. Life below water - Over three billion people depend on marine life to earn a livelihood. Keep the oceans clean.
15. Life on land - Forests are home to 80 per cent of animals, plants, and insects.
16. Peace, justice, and strong institutions - In 2021, over 89 million people fled their homes due to conflict, violence, and human rights violations.
17. Partnerships - Boost development finances and create new jobs.

Sustainability can be defined as the capacity to maintain or support a process continuously over time without compromising the needs of the future. With careful resource management, global development and conservation goals can be achieved together.

Sustainable development requires a significant change in the way the world manages its resources and encourages individuals, businesses, and countries to consider their social, economic, and environmental impact.

A sustainable approach to growth is both cost-effective and environmentally friendly. The mutual synergy between the need for development and sustainable practices allows efficient energy, inclusive growth, and green solutions to continue human development while simultaneously ensuring economic, social, and environmental sustainability.

Businesses and organisations play an essential role in contributing to the seventeen Sustainable Development Goals. Sustainable businesses consider environmental, economic, and social factors before making business decisions and investments. These organisations need to ensure short-term business profit does not translate to long-term liabilities.

Adopting sustainable business strategies, practices, and activities that benefit stakeholders today but do not compromise the natural system and resources of tomorrow. To support sustainable development businesses should protect, sustain, and enhance world resources that will be needed in the future.

To align business strategy with the Sustainable Development Goals framework, organisations should examine supply chains, carbon footprint, and employment opportunities, explore goals that best align with the business, and improve goal awareness.

The three fundamental pillars of sustainable development are environmental, social, and economic. These pillars represent the environment, social responsibility, and the economy. Often, these fundamentals are informally referred to as people, planet, purpose, and profit. They are the three major components that make up human existence.

Environmental, social, and economic sustainability areas refer to the practice that generates long-term economic growth without negative social or environmental impact.

Social sustainability within a business is the management of both positive and negative impacts of systems, processes, and activities on people. These people may include employees, workers in the supply chain, customers, stakeholders, and local communities.

Environmental sustainability is a business’s responsibility to conserve and protect natural resources from the environment to support the well-being of the planet now and in the future.

Economic sustainability is the process of creating long-term economic development for a company to provide financial stability while managing environmental and social factors and without exhausting natural and human resources.