Financial Sustainability

Financial Sustainability is essential for two reasons. Firstly, the majority of busineses will not pursue sustainability unless they see it as offering them financial benefits. Secondly, financial wealth is an important element of quality of life. However, contrary to traditional belief, the goal of financial profit does not have to be in conflict with the goals of social and environmental profit. Carefully designing products within their business, social and environmental systems can result in solutions that have long term financial viability and consistently generate financial profit and wealth. All of this can be achieved without damage to society or the environment and can potentially even generate profit in these areas.

A financially sustainable system should have the following characteristics:

  1. Generates long term revenue by constantly meeting customer needs.
  2. Does not rely on finite resources.
  3. Maximises profitability by minimising consumption of resources.
  4. Does not threaten the financial wellbeing of its customers.
  5. Does not have any significant liabilities.

The diagram below illustrates the key differences between a sustainable business system and a traditional business system. Sustainable products should be designed to function as an integral part of a sustainable business system.

Financial Sustainability

The above diagrams show only the business system, and assumes that it exists within an economy where the customers have a source of income.