The Three Pillars of Sustainability 

Introduction: What is Sustainability?

The world is increasingly focused on sustainability, driven by awareness of environmental degradation, the visible impacts of climate change on communities, rising consumer demand for eco-friendly and ethical business practices, and recognition of the long-term economic risks of resource depletion. At its core lies an understanding that a healthy planet underpins human well-being, social equity, and economic prosperity for present and future generations. 

Different definitions of sustainability have emerged because investors, regulators, consumers, and communities emphasize different priorities — from governance and compliance to equity and environmental protection. For CFOs and CPOs, this means sustainability must be approached through a broad lens, aligning strategies with all stakeholders while protecting financial performance and long-term resilience. 

One framework that facilitates this broad view is the “three pillars of sustainability.” 

What are the Three Pillars of Sustainability? 

The three pillars of sustainability are environmental protection, social equity, and economic viability. This can be summarized as the three “Es” of sustainability, but it is also sometimes presented as three “Ps”: “planet, people, profit.” 

So, how does this differ from ESG? The “three Es” model of sustainability (economic, environmental, equity/social) and ESG (environmental, social, governance) overlap heavily, but they do frame some things differently. 

Environmental is identical for both models, covering climate, resources, emissions, biodiversity, etc. 

Social / Equity is similar, but ESG’s “S” is broader (covering labor practices, human rights, diversity and community impact). The “Equity” framing puts stronger emphasis on fairness, inclusion, and justice. 

Economic vs Governance accounts for the main divergence. ESG includes “Governance,” meaning board oversight, executive pay, anti-corruption and shareholder rights. The “Three Es” substitute “Economic,” highlighting profitability, efficiency, and long-term economic resilience as integral to sustainability. 

In practice this means that ESG is an investor-driven framework, focusing on how environmental, social, and governance risks/opportunities affect enterprise value and compliance. The three pillars framework is a sustainability framing, balancing planet, people, and profit (or alternatively, prosperity). Governance is implicitly assumed as part of “how” an organization delivers, rather than a separate entity. 

In short: the difference is not so much in content (both cover similar issues) but in emphasis and audience. ESG highlights corporate governance and investor accountability, while the “Three Es” highlight economic sustainability and social equity as co-equal pillars with the environment. 

The Environmental Pillar 

The Environmental pillar in the three-pillar model assesses a company’s impact on the planet and its responsible management of natural resources, covering areas such as climate change, energy efficiency, water usage, waste management, and biodiversity. Key regulatory frameworks include the EU’s Corporate Sustainability Reporting Directive (CSRD) and EU Taxonomy Regulation, the ISSB’s S1 and S2 standards, and the UK’s Streamlined Energy and Carbon Reporting (SECR). 

This pillar focuses on how a company affects the environment and its natural resources, including:  

• Climate change: Management of greenhouse gas emissions, energy consumption, and strategies to transition to a low-carbon economy.  

• Resource management: Responsible use of natural resources such as water, raw materials, and the management of waste and pollution.  

• Biodiversity: A company’s impact on, and dependency on, natural ecosystems.  

• Pollution: Control and prevention of various forms of pollution.  

• Energy efficiency: Measures to reduce energy consumption and improve efficiency in operations.  

The Equity Pillar 

The Equity pillar, also known as the social pillar of sustainability, focuses on promoting social justice, fairness, and the well-being of all individuals and communities. It emphasizes equal access to resources, opportunities, education, and healthcare, alongside inclusive decision-making and cultural diversity, to create stable, thriving societies for both present and future generations. By providing equal opportunities, it allows all individuals to contribute positively to a sustainable future while benefiting equitably from economic development. Companies are increasingly subject to various legal frameworks and international standards, such as the UN Guiding Principles on Business and Human Rights, various international covenants on economic, social and cultural rights, and national laws like Germany’s Supply Chain Due Diligence Act (LkSG) and the EU’s Corporate Sustainability Due Diligence Directive (CSDDD). 

This pillar aims to build a stronger society by addressing structural causes of inequality and injustice: 

• Human rights: Companies are expected to respect international standards of human rights with regard to their employees, customers and suppliers. 

• Social equity and justice: Ensures that benefits are shared fairly, and disparities based on race, income, gender, or other factors are addressed.  

• Fairness and opportunity: Advocates for equal access to essential resources like food, water, housing, healthcare, and education for everyone.  

• Well-being and quality of life: Prioritizes the physical and mental health of individuals and communities, fostering social cohesion and resilience.  

• Inclusion and diversity: Values and protects cultural diversity, ensuring that all individuals are respected and included in decision-making processes.  

• Empowerment and participation: Encourages active participation in society and decision-making, giving people a voice in shaping their communities and future.  

The Economic Pillar 

The Economic pillar of sustainability aims to foster the long-term economic viability of an organization through practices such as promoting innovation and technology, managing resources efficiently, ensuring compliance and good governance, creating quality jobs, and ensuring fair trade and market health, ultimately balancing profitability with ecological and social responsibilities to ensure prosperity for present and future generations. The economic pillar of sustainability is less directly codified in regulation than the environmental or social/equity pillars, but there are still frameworks and standards that touch on it. However, corporate reporting standards include the IFRS Sustainability Disclosure Standards (ISSB), the Global Reporting Initiative (GRI, and CSRD. These all require companies to disclose how sustainability issues affect their financial performance and resilience, which effectively embeds the economic pillar. There are also competition and market regulations such as antitrust law, fair-trade regulations, and anti-corruption measures reinforce economic fairness and long-term viability. 

• Aspects that fall under the economic pillar of sustainability include:  

• Economic growth and stability: Supporting economic development in a way that ensures long-term financial stability and growth without depleting resources for future generations.  

• Innovation and technology: Investing in new technologies and innovative practices that increase productivity and efficiency while also reducing environmental impacts.  

• Resource efficiency: Improving the way resources are used to reduce waste, lower costs, and increase profitability, such as by implementing energy-saving strategies or renewable energy sources.  

• Good governance and compliance: While this is more explicit in the ESG framework, this pillar also requires companies to adhere to proper corporate governance, managing risks effectively, and complying with regulations to ensure ethical and sustainable business operations.  

• Fair trade and market health: Ensuring fair prices and practices throughout value chains and contributing to a robust and diverse market that benefits a wider population.  

• Long-term financial viability: Ensuring that businesses and economies can operate and thrive over the long term, making sustainability initiatives feasible and effective.  

• Cybersecurity: This sits at the intersection of the Economic pillar and the Governance pillar of ESG. Weak cybersecurity creates direct financial risk (disruption, fraud, ransom) and regulatory exposure. Standards include NIST in the USA, the NIS2 Directive in the EU, and international standards such as ISO/IEC 27001. 

Complementary Models to ESG and the Three Pillars 

While ESG has become the investor-driven lingua franca, and the three pillars of sustainability offer a balanced approach to people, planet and profit, there are other management models for aligning strategy, operations, and reporting. These include the Triple Bottom Line (TBL), popularized in the 1990s by John Elkington, who first coined the phrase “people, planet, profit.” It’s essentially the foundation of the three-pillar model and still widely referenced in corporate sustainability reporting. Balanced Scorecard (BSC): Originally a performance management tool, some organizations adapt it to sustainability by adding non-financial perspectives (environmental and social KPIs) alongside financial, customer, internal process, and learning/innovation metrics. 

There are also internationally mandated standards, such as the UN Sustainable Development Goals (SDGs), which are a global framework with 17 goals, often used by corporates as a reporting or alignment tool, particularly in Europe. Then there is Integrated Reporting (<IR>), a framework promoted by the International Integrated Reporting Council (IIRC), emphasizing six “capitals” (financial, manufactured, intellectual, human, social/relationship, and natural) to capture value creation. 

Finally, there are industry-specific frameworks, such as SASB Standards (sector-based materiality) or ISO standards (e.g., ISO 26000 for social responsibility, ISO 14001 for the environment). 

Why the Three Pillars Matter for Procurement 

These three pillars of sustainability matter to procurement because they guide purchasing decisions to support long-term business resilience, mitigate supply chain risks, enhance reputation, ensure regulatory compliance, and contribute to sustainable development goals. By incorporating these pillars into procurement strategies, businesses can reduce costs through efficiency, strengthen their brand image, protect human rights, foster community well-being, and minimize environmental impact by reducing waste and carbon footprints 

Conclusion: The Goal is to Achieve Balance 

Whether your organization follows the ESG framework or the Three Pillars of Sustainability, or a traditional management framework such as the Triple Bottom Line or the Balanced Scorecard, the objective is to achieve a balance between economic, social and environmental objectives.  

One of the central challenges in making sustainability operational rather than simply aspirational is the avoidance of so-called “silo wins” where progress in one pillar undermines another. Companies typically use a mix of governance processes and technology to maintain oversight. These include integrated KPIs that show trade-offs and synergies (e.g., cost per unit of CO₂ saved, ROI on waste reduction). Modern business intelligence and procurement platforms such as JAGGAER consolidate environmental, social, and financial data, so executives see cross-pillar impacts in real time (e.g., a new supplier scoring well on emissions but poorly on cost or labor compliance). Cross-functional sustainability steering groups (drawing on the expertise of leaders in finance, procurement, operations and compliance) review major initiatives to ensure balance across the pillars. Moreover, today’s frameworks such as Integrated Reporting (<IR>) and the EU’s CSRD push companies to account for interdependencies, forcing finance and sustainability teams to report in one narrative. 

In short: technology, including source-to-pay technology from JAGGAER, will give you the dashboards to pursue a balanced approach, while good corporate governance and the adherence to the frameworks discussed above provide the discipline to act on them.