Welcome to Sustainability 101.
In this post, we break down some key terms and definitions in the sustainability space for beginners.
This is a basic guide for confusing jargon and hot buzzwords, shaped into easy, digestible talking points.
If you have any recommendations for new terms in Sustainability 101, contact us or comment.
Table of Contents
Key Concepts & Terms for Sustainability 101
*credit to New Oxford American Dictionary for some definitions
When discussing the sustainability of a business model, we refer to the way a business makes money. Business models can tie to social causes as well. For example, for every pair of socks sold, Bombas donates a pair.
Carbon footprint refers to the emissions of greenhouse gases (carbon equivalent) from an individual or organization. If x company emits y tons of carbon every year, y is the carbon footprint of x.
Companies that are ‘carbon neutral’ achieve net zero carbon emissions. That means the given company offsets the amount of carbon they produce by removing carbon emissions elsewhere, or purchasing carbon credits.
Be careful when a company says they “aim to be carbon neutral by”. Double check to see if they have a clear plan.
Carbon offsets refer to the reduction of carbon emissions through the purchasing of credits or use of carbon trading schemes.
For example, if Amazon emits 1 million tons of carbon every year, but purchase 1 million tons worth of carbon credits (which would effectively remove the equivalent from the atmosphere), then Amazon can claim to be carbon neutral without changing their business model.
‘Carbon sequestration’ can be natural or manufactured. When capturing and storing carbon, we sequester it. That prevents it from entering the atmosphere.
Planting a tree is a good example. Also, whales are carbon sinks.
In a traditional linear economy, the process goes ‘make, use, dispose’. In a circular economy, we try to minimize ‘make’ and ‘dispose’, and maximize ‘use’.
Circular economies use products or services to their fullest. When the product lifecycle is complete, you must repurpose that material back into the production phase.
Climate change refers to the periodic change in Earth’s climate due to changes in the atmosphere.
This is a natural process on Earth, which has experienced numerous Hot periods and Ice Ages.
With that said, scientists are concerned that Earth’s climate is shifting at an unprecedented level given the short time span.
In a geological sense, lifeforms shouldn’t notice major shifts in climate during one life span. Climate change is intended to be a slow, gradual process (like a million years slow).
How well can a socio-ecological system mitigate climate risk?
Opposed to sustainability, which aims to create more climate resilient systems, climate resilience itself studies the capacity of existing systems to handle stresses and maintain functionality imposed by climate risk.
A closed loop economy is the most sustainable form of production-consumption. Similar to a circular economy, in a closed loop the input used to create a product is the same as the output.
In the case of Joe and the water bottle (see image in Circular Economy), producers will use the materials of Joe’s reusable water bottle to make another functioning water bottle… for Joe.
Conscious capitalism is a free-market economy that seeks to mutually benefit both people and environment.
Corporate Social Responsibility (CSR)
Back in the 70s, economist Milton Freidman famously claimed that corporations have no social responsibility, people do (paraphrasing here).
Today, business leaders challenge that doctrine; CSR programs have become a standard.
CSR programs incorporate some social cause or contribution into a corporation’s business model, or employee culture.
Cradle to cradle
This is another way of phrasing ‘circular economy’. The same product is used to create a new product, instead of manufacturing a product from scratch.
Deforestation occurs when a forested area is converted for non-forest reasons.
It can be particularly harmful to the environment because 1) the converted land usually outputs carbon 2) with less trees, that area is less capable of absorbing carbon dioxide.
The impact of a person or community on the environment, expressed as the amount of land required to sustain their use of natural resources.
We can talk about how we eat. We can talk about what makes our house hotter (and no, turning on the AC does not solve this problem).
Go ahead and talk about what type of house we’d like to pass on.
But it’s time to talk about how our houses, communities, and lifestyles impact Earth.
Your ecological footprint measures how much natural resources you use in your daily life and how much land your lifestyle requires.
Understanding which aspects of your lifestyle have the greatest footprint can help us make changes to reduce our fart-print on the Earth.
When an ecosystem is damaged, ecological restoration is the process that tries to artificially restore the ecosystem back to its original form. This is a difficult process.
Research suggests that once an ecosystem is damaged, it is nearly impossible to restore it back to its original form.
With that said, ecological restoration is still a critically important process.
Sort of like the “it’s better than nothing” mantra, but it’s like a lot better than nothing.
Environmental, social and governance (ESG)
ESG principles or programs are all over the place. Sometimes we use ESG interchangeably with CSR.
ESG refers to a business strategy that encompasses an environmental cause, social cause, and self-governing body in leadership that holds the company accountable.
Ethical or sustainable investment
An investment in a stock or company that incorporates ESG or CSR principles.
For more info on sustainable investing and how to start, you can read our post on sustainable investing from a JPM Wealth Management Analyst.
In less regulated markets like West Africa, corporations sometimes take advantage of producers and underpay or exploit trade.
Fair trade ensures a fair partnership between producers (e.g. farmers) and the manufacturers (e.g. corporations).
One example of where fair trade plays an important role is cocoa production. Learn more about Hershey’s exploitation of farmers in West Africa.
Geothermal energy is a renewable energy form derived from hot water or steam within the earth. It usually creates electricity.
Defined as a gradual increase in the overall temperature of the Earth’s atmosphere generally attributed to the greenhouse effect caused by increased levels of carbon dioxide, chlorofluorocarbons, and other pollutants.
This was the buzzword in the Al Gore days, but today we use climate change more frequently.
Global warming has always occurred in Earth’s history, but we are primarily concerned with anthropogenic global warming.
That defines how human behavior impacts the speed and intensity of Earth’s heating.
Humans are impacting the environment in unprecedented ways and the rapid changes are affecting the natural ecological processes (e.g., ice reflects heat out of the atmosphere and back into space) that would normally balance such changes.
Most of us learned about this in middle school science. Here’s a refresher.
The greenhouse effect refers to the trapping and build-up of heat near Earth’s surface.
When more greenhouse gases like carbon dioxide and methane are emitted, less heat jumps back into space. Some of it is re-radiated back to Earth’s surface, increasing the temperature of the lower atmosphere.
Greenwashing is a marketing tactic that inaccurately portrays a “green” or “eco-friendly” product or service to increase sales.
More people than ever are concerned about environmental issues, and it is easy to throw a green label with some words like “natural” and create the perception that a product may be positive for the environment.
For more on greenwashing, check out our Brand review page.
In economics, capital is often referred to as equipment, resources or machinery.
You may have heard the term “human capital”. It’s a bit different than the traditional use that may refer to money.
Natural capital is the world’s assets. Think soil, air, water, living things.
Natural resources are materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.
Think of things that are made up of Water, Earth, Air, Fire.
Natural resources refer to materials we harvest, utilize, and rely on to fuel all types of lifestyles.
Natural resources can be found in more rural areas that rely on basic materials like wood for shelter… but also in industrialized areas with commercial farms and factories.
Even your iPhone uses natural resources.
When something is organic, that means it is following the guidelines of a USDA-accredited certifier.
Well, what does that mean? A few things.
1) It doesn’t use pesticides or fertilizers.
2) It doesn’t usually genetically-modified ingredients. For more on organic vs GMO, check out this post about GMOs from a food activist.
Recycling refers to collecting and reprocessing a material so it can be used again.
A common form of recycling would be aluminum cans. These cans are melted down and reshaped for additional market use (rather than ending up in a landfill).
Recycling materials with toxic waste like electronics can be a little trickier. Learn more about recycling electronics.
Reforestation is the process of planting trees where a forest was previously held, but had been removed for commercial purposes.
If you’re interested in making an impact, One Tree Planted is a nonprofit dedicated to reforestation projects.
With $1, you can plant one tree. They recently partnered with the Jane Goodall Institute and are doing some pretty cool work.
Renewable energy comes from a source that is not depleted when used, such as wind or solar power.
Renewable resources are the AA battery to natural resources’ AAA. Renewable resources are like a battery pack; you can use them multiple times and still recharge quickly.
These energy sources include wind, solar, geothermal, and more, but they all have a rechargeable battery.
Non-renewable resources, like coal, oil, and groundwater have limited quantities.
A social enterprise is a for-profit business whose core business model ties to a social cause.
You can think of the example I used earlier about Bombas. Toms shoes also donates one pair of shoes for every pair sold.
Solar energy is energy derived from the sun. Solar panels are used to absorb the Sun’s radiation. This type of energy is captured, stored and regenerated into the electricity grid.
Solar energy is increasingly common in places like Africa due to their warmer climates.
What good is Sustainability 101 without defining Sustainability itself?
Sustainability is the ability of a system to be maintained at a certain rate or level.
It involves creating a system of permanence; a structure where people, planet and profit can live in harmony without compromising one or the other.
Over time, this word has gained popularity with mainstream media and become a buzzword for many industries.
In the ever-expanding lexicon of “sustainable buzzwords,” the most important concept tends to get overshadowed, environmental sustainability…. as defined:
- avoidance of the depletion of natural resources in order to maintain an ecological balance (New Oxford American Dictionary)
In my sustainable reviews of businesses, I talk a lot about supply chains.
A supply chain is the process from the initial point of a product to the point when an end user consumes the product.
In Sustainability 101 terms, we want to ensure a supply chain has the lowest environmental impact possible.
In the case of a laptop:
- A supply chain begins in the cobalt mine regions to gather the materials for integrated parts.
- There are about 66 individual minerals used in the creation of a computer.
- Next, we go to the manufacturing process where the computer takes it shape.
- Then, the post-production process begins. The computer is integrated with software.
- Now the laptop is shipped to the distributor
- It’s good to go; the laptop is shelved by the retailer
- Finally, the laptop is driven home by a dude named Ben so he can pretend to work and stream videos.
Triple bottom line
You may have heard of “PPP”. No, it’s not Puff Puff Pass. It’s People, Planet and Profit.
Businesses of all sizes incorporate a triple bottom line strategy – a business strategy that prioritizes people, planet and profit equally.
These businesses may encourage proper healthcare and maternity leave for employees, emphasize sustainable practices in their operations, and tie social causes into their business.
These businesses also retain a profit, and are important examples of how business and environment can work hand-in-hand.
The consumer value derived from a product, service or organization.
For example, using recycled materials is a value-prop for climate-conscious consumers.
Wind energy is created through wind turbines. This energy is collected through motion from heavy winds in farmy areas with open land (less trees = more wind).
This renewable form of energy has become increasingly common in the last few decades, but is far from perfect.
Turbines are clunky, require tons of precious metal, and can have a negative impact on surrounding wildlife. Still, this clean energy is abundant and there is much room for innovation.
Contribute to Sustainability 101
Thanks for checking out Sustainability 101. You can add to the Sustainability 101 list of terms and definitions in the comment section. If it fits, we’ll gladly add your term.