Entrepreneurship is widely celebrated as an engine for progress that brings growth to the economy, makes the marketplace more competitive, makes individual firms more productive through technological change and creates jobs and added value and welfare for members of society. However, while entrepreneurship is generally lauded for the positive impacts and benefits it has provided to society, it is also true that entrepreneurial activities can have negative consequences such as environmental degradation or unequal distribution of wealth. Recognizing this situation, there have been calls for entrepreneurial skills and processes to be applied to mitigate and resolve some of the problems that entrepreneurs may have created, an idea which has provided the foundation for ecopreneurship and social entrepreneurship, as well as sustainable entrepreneurship.
Consumers are demanding greater transparency on environmental and social matters from the companies asking them to purchase their products and services, and investors are integrating corporate social responsibility into their assessments of the overall performance of portfolio companies. These trends have served as the catalyst for interest in “sustainable entrepreneurship”, which has been described as the continuing commitment by businesses to behave ethically and contribute to economic development (e.g., job creation that increases disposable income that generates tax revenues that can be invested in projects focused on sustainable development) while improving the quality of life of the workforce, their families, the local and global community as well as future generations. Sustainable entrepreneurship should be carried out using a business model aligned with the principles of “sustainability”, which means that the model does not deplete resources, but rather replenishes them (e.g., natural resources, human resources, knowledge and technology foundations etc.), and creates value and material and non-material wealth (i.e., well-being and happiness) for all stakeholders through actions which are ethical and just.
The sustainable entrepreneur is the only route to fulfilling sustainable development. Firstly, an entrepreneur and their enterprise have to be financially sustainable to survive within the current economic and regulatory systems. An organization just focusing on the environment as its goal without a means of income beyond government subsidy or philanthropy cannot be an entrepreneur, for example, a change of government or change of heart by the philanthropist could remove the income for that organization and stop the environmental work. In addition, concentrating only on environmental values could cause social damage, that is to say, creating a nature reserve can exclude the local community from resource traditionally harvested from the land the nature reserve now occupies. Similarly, concentrating on the social values can cause financial failure and environmental damage, take a fair trade organization as an example, it can help bring disadvantaged communities out of poverty but if the organization cannot sell the fair trade products its financial failure stops its good work. In addition, the fair trade organization could be damaging the environment through transporting goods across the world (contributing to climate change) and having little regard to the impacts of the production process on the environment (depletion of natural resources, pesticides, hazardous waste). Hence only those entrepreneurs that balance their efforts in contributing to the three areas of wealth generation can truly be called a sustainable entrepreneur.