Sustainability: Key Concepts and Principles

Sustainability is a broad and multifaceted concept that includes various initiatives, organizations, and agreements to promote the environmental, social, and economic well-being of present and future generations. Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their own needs through disproportionate or careless use of natural resources. To achieve this, it is necessary to strike a balance between economic growth, environmental respect, and social well-being, which represent the three pillars of sustainability.

The Sustainable Development Goals (SDG)

The Sustainable Development Goals (SDGs) are a set of 17 interconnected global goals established by the United Nations General Assembly in 2015 as part of the 2030 Agenda for Sustainable Development. They aim to address a wide range of global challenges, including poverty, inequality, climate change, environmental degradation, peace, and justice. The SDGs are designed to be a “blueprint for achieving a better and more sustainable future for all” and encompass a holistic approach to development, ensuring that no one is left behind.

The SDGs serve as a global framework for governments, businesses, civil society, and individuals to address global challenges through the key principles of universality, integration, and inclusion and work towards a more sustainable and equitable world. They foster collaborative efforts and partnerships to achieve measurable results by 2030.

The Paris Agreement

The Paris Agreement is a significant international treaty adopted on December 12, 2015, at the 21st Conference of the Parties (COP21) of the United Nations Framework Convention on Climate Change (UNFCCC) held in Paris, France. The agreement aims to tackle climate change and its adverse effects by requiring countries to take action to limit global warming and reduce greenhouse gas emissions. It became effective on November 4, 2016.

The main goals of the Paris Agreement are to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to strive to limit the temperature increase to 1.5 degrees Celsius. It also aims to increase adaptation and resilience to cope with the impacts of climate change, promote climate resilience, and reduce the development of greenhouse gas emissions without jeopardizing food production.

Additionally, it seeks to mobilize financial resources to support developing countries in both mitigation and adaptation efforts. The agreement establishes a comprehensive transparency framework for action and support, including reporting and review requirements.

The Paris Agreement signifies a worldwide consensus on the necessity to address climate change, involving nearly every country in the world in a collective effort and promoting increased engagement and action from all sectors of society. It sets a clear long-term goal to achieve a climate-neutral world in the second half of the century, guiding national policies and international cooperation towards sustainable and resilient development pathways.

United Nations Global Compact

The United Nations Global Compact is a voluntary initiative launched in 2000 to promote corporate responsibility and sustainability globally. It has thousands of participants from more than 160 countries, including companies, academic institutions, non-governmental organizations, and other entities. The main objective of the Global Compact is to align corporate strategies and operations with ten core principles divided into four main categories: Human Rights, Labor Standards, Environment, and Anti-Corruption. It aims to catalyze actions that support the broader goals of the United Nations, such as the Sustainable Development Goals (SDGs). This initiative is a key platform for promoting corporate responsibility and sustainability globally, supporting companies in adopting ethical and sustainable practices that contribute to a more just and equitable future.

Companies and other organizations that join the Global Compact commit to reporting annually on their progress in implementing the ten principles, known as Communication on Progress (COP). They also integrate the principles into their strategies and operations, promote them within their sphere of influence, and collaborate with other companies, non-governmental organizations, governments, and civil society to share best practices and develop collective solutions to global challenges.

The Universal Declaration of Human Rights (UDHR)

The Universal Declaration of Human Rights (UDHR) is a crucial international document that the United Nations General Assembly adopted on December 10, 1948. It outlines the basic human rights that should be protected universally and serves as a common standard of achievement for all people and nations. The UDHR was created in response to the atrocities of World War II and is considered a significant milestone in the history of human rights. It is widely acknowledged as the global standard for human rights.

The preamble of the UDHR explains the reasons for the Declaration, highlighting the inherent dignity and the equal and inalienable rights of all members of the human family as the foundation of freedom, justice, and peace in the world.

The UDHR consists of 30 articles that detail a variety of civil, political, economic, social, and cultural rights that belong to all human beings.

The Earth Summit

The Earth Summit, officially known as the United Nations Conference on Environment and Development (UNCED), took place in Rio de Janeiro, Brazil, from June 3 to June 14, 1992. This summit was a significant global conference that has had a lasting impact on international environmental policy and sustainable development. Among the outcomes of the Earth Summit is the:

The United Nations Framework Convention on Climate Change (UNFCCC), an international treaty focused on stabilizing greenhouse gas concentrations in the atmosphere to prevent dangerous interference with the climate system. The aim is to establish a framework for negotiating specific international treaties, known as "protocols" or "agreements," that can set binding limits on greenhouse gases. As of 2024, there are 197 parties to the convention, including nearly all countries and the European Union.

Conference of the Parties (COP)

The COP is the supreme decision-making body of the UNFCCC. It meets annually to assess progress in dealing with climate change and to negotiate and adopt decisions and resolutions to further the implementation of the convention.

The Intergovernmental Panel on Climate Change (IPCC)

The IPCC is a scientific body sponsored by the United Nations (UN) that evaluates the scientific basis of climate change, its impacts, and potential mitigation and adaptation strategies. The IPCC was established in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP). It publishes assessment reports every 6-7 years, summarizing the latest scientific knowledge on climate change. These reports are widely considered the most authoritative sources of information on climate change. While the IPCC does not make policy recommendations, its assessments provide policymakers with the scientific information necessary to make informed decisions on climate change.

The International Institute for Sustainable Development (IISD)

Established in 1990, the IISD is a non-profit organization committed to advancing sustainable development on a global scale. The mission of the IISD is to foster human development and environmental sustainability through research, analysis, and policy advocacy. The organization focuses on a wide range of issues related to sustainable development, including climate change, biodiversity, water management, energy, trade, and governance. The IISD functions as an independent, non-partisan organization with a diverse team of researchers, analysts, and policy experts.

ESG Criteria

Environmental, Social, and Governance (ESG) performance refers to measuring and evaluating a company's performance in three key areas: environmental responsibility, social responsibility, and corporate governance.

Environmental Responsibility evaluates a company's impact on the environment, including carbon emissions, energy efficiency, waste management, recycling practices, water use, and conservation efforts, pollution prevention and control measures, and biodiversity conservation initiatives.

Social Responsibility focuses on a company's impact on society, including its employees, communities, customers, and other stakeholders. This involves evaluating labor practices and human rights, diversity, equity and inclusion (DEI) initiatives, health and safety standards, community engagement and philanthropy, as well as responsible supply chain management and sourcing practices.

Corporate Governance refers to the systems and processes by which companies are directed and controlled. This may include board diversity and independence, transparency and disclosure practices, executive compensation and incentive structures, ethics and anti-corruption policies, as well as shareholder rights and engagement.

Evaluating ESG performance involves analyzing a company's policies, practices, and performance metrics in these three areas to assess its overall sustainability and social responsibility. Investors, analysts, and other stakeholders are increasingly taking ESG factors into account when making investment decisions, recognizing that companies with strong ESG performance are often better positioned to manage risk, generate long-term value, and contribute to a more sustainable future.