Updated October 2023
The commonly used diagram of sustainability – consisting of three intersecting circles – is vague, difficult to apply and interpreted in a variety of ways to suit the user. But a couple of years ago I stumbled upon something much more inspiring and scientifically accurate!
A more recent diagram – commonly called the wedding cake because if its tiered structure – shows the economy as a subset of society and society a subset of the biosphere. This is the global ecosystem that encompasses all the living things on Earth and the relatively tiny and fragile part of Earth’s environment in which living things can survive. The source of this diagram is Lokrantz/Azote, in Rockstrom & Sukhdev (2016)
We know the world is far more complex than both the three circles and the wedding cake. The Earth’s biosphere interrelates and overlaps with four other earth systems – the hydrosphere, atmosphere, cryosphere and geosphere. Together they make the Earth habitable for humans and all other life. Looking at the Earth as a whole gives us a better understanding of the many
complex connections in our world and how humankind is introducing stressors that erode resilience, hasten decline and make future collapse scenarios more likely to occur.
Governance is a critical element of ESG that connects – and defines the relationship – between an organisation, its environment and society. An important task of governance is to ensure economic activity stays within the planetary boundaries humanity must not exceed in order to
remain safe. Without healthy ecosystems, the social systems – including the economy – will struggle to survive.
Governance is critical to manage environmental and social issues. It’s the framework and rules by which authority is exercised and controlled and the mechanism by which an organisation – and its people – are held to account. People in authority make the best decisions when they understand the full external context and align commitments, objectives and resources to “fit”. Good governance means having oversight and asking “Are we doing what we say we do?” Transparency, ethical conduct and accountability are essential elements of governance.
Failure of governance – environmental systems
Environmental crises are a failure of governance. The problems of climate change and biodiversity loss have been widely known for decades. In the 2020s they pose an existential threat to humanity because their importance was ignored or downplayed by public or private sector decision-makers. The uncomfortable facts were pushed aside – or even denied – in the quest for economic growth and private profit. The resulting effort and investment required to find solutions was inadequate.
To improve our resilience, we need to confront the facts relating to social ills, including the gap between indigenous non-indigenous Australians, as an urgent issue relevant to all of us. Profit and investment needs to be viewed through a different lens – as a way to improve the social fabric of society, repair degraded ecosystems and refrain from making an untenable situation worse. The economy and profits may grow – but we can no longer use this narrow benchmark as the sole measure of success. Some advocate for a steady-state business and economy, in which no-one lives below the poverty line and everyone has access to meaningful work and activities that improve their well-being. This is the world we want.
The United Nations Sustainable Development Goals (SDGs) are a blueprint for a better world. The details of which SDG relate to each circle in the wedding cake is easily accessible from the UN website. You can see all the goals and 169 indicators as well as how we are tracking as a global community towards their fulfilment. In the mean time, consider how our economy and society are dependent on a healthy biosphere and whether the three circle diagram reflects the huge task we have at hand.
In the 2020s the world has become more complex and unpredictable. So a primary aim of every organisation has become resilience – to remain viable and in tune with shifting societal needs and expectations. This requires a balance of flexibility, risk taking and control . And good governance is essential.