Guide to Economic Sustainability: Uncover Definition, Tips, and Strategies for Lasting Success! If you want to understand what sustainability is, you can start by learning how sustainability applies to everything from finance to the environment to social structures. Economic sustainability is important because it describes how societies can maintain their current financial structures and what steps might be necessary to improve the system for greater sustainability long term. Understanding sustainability in finance can help you learn more about current systems, how they work and why sustainability is important in many fundamental systems.
In this article, we define economic sustainability, provide examples to use as a guide and share tips to help you implement economic sustainability strategies in the workplace.
What is economic sustainability?
Economic sustainability is the practice of conserving natural and financial resources to create long-term financial stability. A system that’s sustainable can last far into the future with minimal negative impacts.
In finance, this can mean reducing the worldwide consumption of valuable resources to ensure they’re available to future generations to create financial stability and wealth. For example, by reducing the usage of fossil fuels and focusing on alternative fuel sources, companies, governments and consumers can help reduce the global impact of emissions and pollution from fossil fuels.
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Examples of economic sustainability
Here are some examples of economic stability:
Alternative energy sources, such as wind power, solar power and hydropower, can offer a more sustainable, clean and affordable solution to energy needs. Much of the world depends on fossil fuels like coal, oil and gasoline, which have a limited supply and create greenhouse gas emissions.
Alternative energy sources depend on infinite natural processes or resources, which may make them more sustainable and affordable in the long term. Reducing fossil fuel consumption can help reduce tax burdens for consumers, decrease the costs of environmental impacts and create more energy equity among low-income populations, which can increase economic productivity.
Many farms are adopting sustainable agricultural practices to reduce soil degradation, which occurs from over-farming, and to reduce animal product consumption. Reducing food consumption and focusing on regenerative farming can help improve soil health, crop yields and the quality of farmed food and resources.
Regenerative farming is a practice farmers use to rotate crops for better soil health, instead of farming the same crops, like corn, all year. Improving soil health and reducing animal product consumption can help keep food costs low, reduce carbon emissions and environmental damage and encourage better habits.
Cryptocurrencies and blockchain technologies
Cryptocurrencies are digital monetary assets that exist on a blockchain. A blockchain is a digital ledger that’s both decentralized, meaning a single entity doesn’t control it, and accessible to the public. Cryptocurrencies and blockchain technologies can offer economic sustainability through the following practices and methods:
Hedging against inflation: While physical currencies are subject to inflation, cryptocurrencies can be a store of value, hedging against inflation spikes.
Creating a public record of financial transactions: While cryptocurrency users are anonymous on the blockchain, transaction details are still part of the ledger, increasing the transparency of financial transactions and potentially addressing financial inequity.
Performing practical functions: Many cryptocurrencies perform practical functions, like tracking goods in a supply chain, verifying product authenticity via digital signature or providing accessible value for low-income nations or areas.
Recycling and pollution reduction
Recycling and reducing pollution is a common economic and environmental stability practice that can help increase the value of materials. For example, a company producing aluminum cans can sustain operations by recycling used cans and creating molten aluminum for recasting, instead of mining for aluminum ore.
This practice can reduce the company’s environmental impact, saving the region both cleanup and restoration costs and reducing the organization’s mining costs. Reducing pollution can also help reduce worldwide cleanup and restoration costs and the costs of climate change.
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Creating more sustainable fisheries can help reduce the environmental and economic impact of overfishing the oceans. Side effects of overfishing can include population declination, bycatch, or catching other species along with fish, and fishing equipment made of plastics and other materials discarded in waterways.
Adopting more sustainable practices, like reducing fish consumption worldwide and reducing bycatch and fishing pollution, could create a more sustainable fishing environment, resulting in more stable profits and economic health for the fishing industry. It can also help ocean populations recover, which is crucial for ecosystems across the globe.
Tips for implementing an economic sustainability strategy
Here are some tips for implementing an economic sustainability strategy:
Focus on reducing environmental effects. Companies can focus their economic sustainability strategy on reducing their environmental effects for a more healthy, sustainable long-term environment and an abundance of natural resources.
Set firm financial goals. Setting financial goals is often a core component of economic sustainability because goals help a company decide how to increase profits, provide benefits for team members and continue operations without reducing outputs.
Focus on team members. Productivity is often necessary for sustained economic growth. Companies can focus on increasing their staff’s satisfaction by creating competitive wages and benefits packages, making the workplace safer and adopting strong moral values.
Work with other businesses and organizations. Collaborations can be helpful for creating economic stability because they allow companies to pool their resources to solve economic problems, such as inequity, environmental damage and job creation.
Other types of sustainability
Economic sustainability is one of the three pillars of sustainability that the United Nations outlines. Here are the other two types to consider:
1. Environmental sustainability
Environmental sustainability is the act of reducing environmental damage and minimizing natural resource consumption. The goal is to stop natural resources from depleting over time. This might include practices like reducing fossil fuel consumption, logging and deforestation and creating more sustainable consumer practices.
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2. Social sustainability
Social sustainability is the practice of creating equal access to natural resources and necessities like water, food and clean air. It also helps create more equitable systems of employment to ensure that companies don’t exploit workers for profit. Social, economic and environmental sustainability depend on one another, meaning that when companies can achieve social sustainability, they typically also achieve economic and environmental sustainability.