Let's step back for a moment and think what exactly 'sustainability' means, since it is misused a lot. In a literal sense, it means 'making something live forever.' This, of course, is plainly impossible to do and therefore not a terribly useful definition. The definition used in policy and NGO circles goes something like 'meeting society's needs today without compromising the needs of future generations.' This, in turn, is a highly loaded definition: Who is to judge what anyone's needs are? How can we know what future generations might need relative to today's? To see how loaded it is, think about the day-to-day goods and services we consume today and ask whether they were considered 'needs' one hundred years ago: For example, would our ancestors have thought that we needed computers? Cars? Television sets? Cinema? Or, any of the hundreds of such things that we want, and take for granted, today in the course of our normal lives?

The bottom line is, these traditional definitions of sustainability have a condescending, and frankly, impractical view about the world as it is and what people's wants are.

Corporations live in a practical world. They manage scarce resources and juggle the conflicting needs and imperatives of multiple constituencies, all with a view to create value. From these corporations' point of view, sustainability is fundamentally about meeting people's wants for goods and services by consuming limited resources, and keeping the (corporations') footprint associated with the side effects of such use as small as possible.

This, in turn, means efficiently using air, water, minerals, metals, fossil fuels, and other natural (including biodiversity) resources, in a manner that mitigates - or even zeroes out - the footprint associated with pollution, waste, and emissions. Hundreds of good companies - whether it's a Walmart trying to drive efficiencies in its supply chain, an Apple in its product design that emphasizes conservation, or an Infosys in its building and data center processes that obsesses over energy efficiency - adopt this view.

For such forward-thinking companies, sustainability has become closely aligned with being efficient by becoming less wasteful and more resourceful. In the process, it is integrally aligned with their strategies to reduce costs and thereby, increase value.

Surely, there are some that will try to use it 'as a mask' to look good. However, those will be short-lived efforts, perhaps even short-lived companies. At the end of the day, the ones that do not see the links between sustainability and efficiency will leave value-creation opportunities on the table, thereby not being able to compete against their more efficient peers. In the process, they will be the first to fall by the wayside.

Integrating Sustainability
The way companies make sustainability an integral part of their business is to make sure that it is aligned with the value-creation process. Value-creation is, after all, the primary purpose of business. Where does value come from? That's no mystery: value comes from producing an extra dollar (rupee) of revenue for a given cost (i.e. revenue synergies), or producing that revenue at a lower dollar (rupee) of cost (i.e. cost synergies), or from efficiencies in how we invest capital to produce value growth for the future.

Next, we want to do a careful audit of whether and how being more sustainable matters with regard to each of the three. For example, are our customers willing to pay more to buy our product if it is seen as more sustainable compared to one that our competitor sells? Can a focus on sustainability lead to more energy efficient  processes, thereby not only lowering our costs but also by lowering our carbon emissions and other forms of pollution or waste? As to our investment practices, the company needs to ask questions such as: What does sustainability means in terms of whether and how I need to retool my supply chain? My retail chain? The way in which I make my capital budgeting decisions? Redesign my business processes?

Companies that have ingrained sustainability most deeply - and there are many today - are those that have begun to link executive compensation to sustainability-related metrics. Specifically, depending on which part of the value chain they manage, linking compensation to goals related to water use, raw material use, energy use, carbon dioxide emissions, waste, pollution, and toxic emissions.

Lending A Helping Hand
The implications for society from corporations becoming more sustainable are simply enormous.

Consider the case of greenhouse gas (GHG) emissions, which science says is the cause of global warming and climate change. 75 per cent of GHG emissions come from carbon dioxide, almost all of which, in turn, comes from burning fossil fuels (oil, coal, natural gas). Who burns fossil fuels? Primarily corporations by their production and consumption of energy. Thus corporations, creating emissions from producing goods and services to meet society's demands, are the key contributors to the rising atmospheric concentrations of GHG. If society is going to find a solution for global warming, corporations are front-and-center to making that happen.

Here's where it gets interesting. Where will these solutions come from? It's not going to come from governments or the UN, but from corporations becoming more energy- and carbon-efficient, or producing their energy from non-fossil fuel-based sources (such as nuclear and renewable), or their being able to capture and put away carbon dioxide via technologies called 'carbon capture and sequestration.'

This is also the good news, when we think about it: corporations are the cause, but they will also ultimately be the solution to our sustainability problems: the R&D, the talent, the technologies, the financing will all have to come from the many companies around the world that are making these things happen, every day. (Incidentally, it's worth asking, why would they do it? Because they can make a profit doing so.)

What makes it even more urgent and important to do on a mass scale is given where most of the world's growth is coming from: countries such as India and China, which have some of the most inefficient corporate sustainability practices. As more and more of the world's production and wealth-creation opportunities shifts to such locations, the pressures on the natural environment become worse and more irreversible.

The opportunities are immense to adopt and adapt the best practices and processes in corporate sustainability, thereby becoming more efficient in the use of natural resources and produce less waste, pollution, and emissions. Global corporations have a central role to play in making this happen, by diffusing such technologies throughout their worldwide value chain, especially to those parts that are the most inefficient, sustainability-wise.

An IIM Bangalore alumnus Professor Anant K. Sundaram is a finance faculty at the US based Tuck School of Business at Dartmouth.