In 1987, the United Nations’ Brundtland Commission published this definition of sustainability in its report, which called for a strategy that incorporated both economic development and consideration for the environment. Over the years, other definitions of sustainability have emerged, but the Brundtland definition remains a useful explanation that distills sustainability in a concise manner while also making clear the enormity and complexity of the undertaking.

A few short decades later we are facing a world that’s changing, and at a very rapid pace. The world also continues to become more complex, where the success of one organization is now highly dependent on the performance of other organizations, and the future success of any organization is dependent on the continued viability of the markets and communities it serves.

Organizations need to adapt quickly to these changes and respond to these complexities to ensure their future.

While sustainability strives to create and preserve value over the long term — beyond next quarter and surely beyond next year — there is also pressure to balance short-term gains with long-term value. Without question, traditional and satisfactory financial performance must exist alongside sustainability-related activities; they depend on each other for long-term viability. Taking a structured approach to sustainability is a way to reconcile these competing priorities.

Sustainability is about balancing operations with intention to preserve and sustain economic, environmental and social resources. There will always be uncertainties about succeeding over the long term, yet there are many opportunities for those organizations that choose to embrace change and execute on new norms and expectations from stakeholders. What these opportunities look like will differ from one organization to another — “what matters” from a sustainability perspective is dependent upon an organization’s focus, industry, business model and even its geography, just as it does for financial reporting.

As of the writing of this FAQ guide, there are many moving parts not yet settled when it comes to sustainability, particularly in the area of communication and reporting to stakeholders, including regulators. 2024 signals a more concerted effort by regulators to move companies from voluntary to required disclosures with the hope that the “alphabet soup” of frameworks and regulatory acronyms abates; but clearly, more change is yet to come in the next several years. In addition, localized sustainability requirements, i.e., “if you do business here, you owe us sustainability information,” have become a popular way of designing sustainability-related regulation and legislation that transcends the traditional incorporation and stock exchange nexus.

Our objective with this FAQ guide is to provide users with helpful insights, knowing that it cannot be an “end all, be all” publication due to the dynamic nature of the subject. We expect to add and update this information as the landscape shifts. What we do know is that sustainability is here to stay and will continue to be of interest and concern to a broad range of stakeholders who are also not going away.

A publication like this is never enough. Our hope is that it encourages dialogue and engagement to help address the risks and take advantage of the opportunities that sustainability presents to all of us.

Protiviti
March 2024