Economic Sustainability: Definition, Importance, and Examples

Economic sustainability is a broad set of decision-making principles and business practices aimed at achieving economic growth without engaging in the harmful environmental trade-offs that historically accompany growth. Ideally, sustainable development creates operational systems that consume natural capital (also known as natural resources) slowly enough that future generations can also use those resources. (Learn more about how to conserve natural resources.)

Sustainable practices can tackle the problem of humans’ collective ecological footprint in several ways. They can focus on reducing the depletion of the natural environment or come at the issue from the other direction by finding ways to reduce waste, limit carbon emissions, and utilize solar energy. The unifying principle behind economic sustainability is rejecting wasteful short-term processes and embracing the planet’s long-term well-being.

A sustainable economy is essential for various reasons, with justifications ranging from high-minded environmentalism to corporate interest.

1. 1. The longevity of the global economy: The worldwide reliance on unsustainable practices has a necessary end date since the planet’s natural resources are not infinite. Developing new processes and investing in different resources is essential for any commercial activity to continue for the long haul.
2. 2. The preservation of human life: Climate change caused by the overuse of fossil fuels has created a dire situation for Earth and humans’ ability to inhabit it. By trying to limit energy consumption and adjusting the approach to food production, humans have the opportunity to preserve the planet for posterity.
3. 3. Unrealized discoveries: The natural environment has long been a source of discovery and innovation. Therefore, the constant degradation of natural surroundings jeopardizes the opportunity to unearth new compounds and processes that could serve as the basis for new products or other economic benefits.

Economic sustainability can take many forms depending on how an organization adapts, including:

1. 1. Devising less wasteful systems: Innovating ways to reduce land use or make supply chains more efficient cuts down on the resources needed to produce a good or bring it to market. Learn more about how to reduce waste.
2. 2. Prioritizing low-impact economic development: Investing time and money in sustainable businesses to create a waste-free world is necessary for shifting concentrations of capital and momentum for the future economy.
3. 3. Switching to renewable energy sources: Converting operations to run on energy produced by solar or wind power rather than fossil fuels is one way an organization can prioritize the future. Learn more about the impact of fossil fuels.

Creating the infrastructure for economic sustainability is a complex process that involves the full cooperation of both the private and public sectors. On the individual level, however, retail investors can direct their money toward companies whose values and practices align with their own. Citizens can also encourage their elected officials to create economic plans that include sustainable development goals and caps on greenhouse gas emissions. Ultimately, it’s only through large-scale action and an overhaul of the financial systems that constitute the global economy that society can achieve environmental sustainability.

Get the MasterClass Annual Membership for exclusive access to video lessons taught by the world’s best, including Paul Krugman, Doris Kearns Goodwin, Ron Finley, Jane Goodall, and more.