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Sustainability has two important dimensions in treasury and finance, environmental sustainability and financial sustainability.

Environmental sustainability

Environmental sustainability involves making decisions and taking actions which expressly take responsibility for the impact on the environment, and avoid depleting or degrading natural resources such as soil, water, forests, and biological diversity.

Financial sustainability

Financial sustainability is achieved when an organisation is able to earn sustainable financial surpluses and generate cash in the medium and longer-term.

For example in order to pay back borrowings, with interest, over time.

Historically, it was generally considered that there was a conflict between environmental sustainability and financial sustainability.

Arguably though, it is perhaps only environmentally sustainable businesses which are fully financially sustainable.

This proposition suggests that there need be no conflict between an organisation’s environmental and financial objectives, when a sufficiently long-term view is taken.

See also