How a 300-Year-Old German Word Became a $30 Billion Industry

The word sustainability is German. It’s over 300 years old. It was coined by a mining administrator who was running out of trees. And it had nothing to do with environmentalism. Three centuries later, it’s a $30 billion industry of spreadsheets, software, carbon credits, and questionnaires landing in the inboxes of small business owners across the world.

How it got from there to here is worth understanding.

Why?

Because the gap between what sustainability meant and what it’s become explains a lot about why the current system doesn’t work.

Pragmatic Beginnings

For most of human history, sustainability wasn’t a concept. It was just how you survived.

On every continent, for thousands of years, indigenous communities managed land the same way. Controlled burns to prevent wildfires and regenerate soil. Rotational farming to allow land to recover. Seasonal harvesting so fish stocks could replenish. Nobody called it sustainability. They called it “the way things were done.”

In Edo period Japan, an island nation spent 250 years in near-total isolation. No trade. Finite resources. Nothing was wasted because nothing could be replaced. Clothes were repaired until they became rags. Rags became paper. Paper became fuel. A very successful economy was built on “use everything.” They weren’t environmentalists.

Medieval European commons worked the same way with shared grazing lands, forestry rules, and water rights. Communities set limits on how much anyone could take. Not because they were green, but because overharvesting destroyed everyone’s livelihood. You graze too many sheep, the land dies, and everyone starves. Self-interest enforced restraint.

And then, in 1713, a Saxon mining administrator in Germany named Hans Carl von Carlowitz wrote a book called Silvicultura oeconomica. The mines needed timber — lots of it — for shoring up tunnels and fuelling smelters. They were running out of trees. His argument was simple: don’t cut more than grows back, or you destroy the resource that feeds your industry.

The word he coined was “Nachhaltigkeit.” Sustainability.

Again, this was not environmentalism. It was intelligent operational resource management.

The point? For most of human history, sustainability was just good management. It became something else entirely when industrialization broke the feedback loops that kept extraction in check.

Scaling Without Common Sense

Fossil fuels removed the natural limits, and suddenly, you could extract faster than systems could replenish. You could produce more than markets could absorb. You could pollute more than ecosystems could process.

Scale changed everything. One factory pollutes a river, and it’s a local problem. A thousand factories pollute a continent, and it’s a systemic one.

And the costs got externalized. The company profits while the downstream community gets sick. The factory produces cheap goods, and the atmosphere absorbs the emissions. The shareholders gain, and the public pays.

For 200 years, this has been called “progress.”

Public Relations and the Rebrand

The environment came back into focus in the 1960s, and not gently. Rachel Carson published Silent Spring in 1962. The Cuyahoga River in Ohio caught fire in 1969. People could physically see the damage. Dead birds, burning rivers, and smog you could taste. The response was regulation. Clean Air Act. Clean Water Act. The EPA. The approach was straightforward: stop poisoning things. And for the visible stuff — the rivers, the air, the obvious pollution — it largely worked.

By the 1980s, companies realized regulation was coming whether they liked it or not. Better to self-regulate than be regulated. “Corporate Social Responsibility” emerged, ripe with voluntary reporting, sustainability statements, and environmental pledges. The Brundtland Report in 1987 put “sustainable development” into the global vocabulary: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

This is where sustainability starts its transformation. It stops being a practice and starts becoming an industry.

The 2000s brought the frameworks. The Global Reporting Initiative. The UN Global Compact. CDP launched in 2000. Reporting became standardized, which meant it became a product. Companies started hiring sustainability teams. But most of those teams weren’t hired to change operations. They were hired to fill out reports. The gap opened between what companies reported and what they actually did. The reporting became an end in itself.

Then ESG became an investment lens. BlackRock’s Larry Fink wrote his annual letters telling CEOs that sustainability matters to investors. Rating agencies emerged — EcoVadis, Sustainalytics, MSCI ESG. Supply chain questionnaires cascaded down. Big companies, under pressure to report on their entire value chain, pushed reporting requirements onto their suppliers. The Paris Agreement arrived in 2015. The Sustainable Development Goals followed. The language became universal. Everyone was talking about sustainability. The question was whether anyone was actually doing it.

By the 2020s, what had been voluntary became a legal requirement. CSRD. EU Taxonomy. SFDR. Mandatory reporting arrived in Europe. The sustainability industry grew to tens of billions as software platforms, consulting firms, auditing services, certification bodies, rating agencies, training programs, and conference circuits emerged.

And at the bottom of the chain? Jim, the tire shop owner; Svenja, who owns a textile firm with 10 employees; and countless other small business owners are receiving 47-page questionnaires from their biggest customers asking about Scope 3 reporting. None of them has a sustainability team. Nor do they have the budget. But that doesn’t change the submission deadline. And many have the sense that they don’t figure this out, a major contract will be lost.

Ten-Dollar Labels and Letters

To add complexity to chaos, sustainability has become so confusing (despite being quite simple, if approached with a modicum of common sense) because so many different groups see it completely differently, and they’re all talking past each other.

Academia sees research, models, and peer review. Important work. Also largely disconnected from the reality of running a 15-person business. When a professor publishes a paper on Scope 3 methodology, it doesn’t help the owner of a 15-person sewing company figure out what to put in the form her customer sent her.

The haters say ESG is woke, that sustainability kills shareholder value, that it’s all a scam. They’re often funded by industries that benefit from no regulation. But they have a point when they say the current system is performative. They just draw the wrong conclusion. The answer isn’t to abandon environmental responsibility. The answer is to fix the delivery system.

The corporate world sees sustainability as reporting compliance plus brand positioning. A department, not a practice. Something you do in your annual report, not something that changes how you run your factory.

And then there’s the alphabet soup — ESG, CSR, CSRD, CDP, GRI, SASB, TCFD, SFDR, VSME. Every framework adds a layer. Each layer needs software, consultants, and auditors. Nobody asks whether a small business needs all of them. They just keep adding letters.

And of course, there are the three scopes. Scope 1 is what comes out of your building and vehicles. The gas you burn, the diesel in your trucks. Scope 2 is your electricity — indirect emissions from the power grid. Scope 3 is everything else. Your entire supply chain. Your customers’ use of your product. This is where it gets genuinely absurd for small businesses.

The Question That Matters

For 300 years, sustainability meant “manage your resources so your business survives.” Hans Carl von Carlowitz would recognize Jim’s tire shop as a perfectly sustainable operation — Jim manages his resources, serves his customers, employs his people, and plans to pass the business to his daughter.

Somewhere along the way, sustainability stopped meaning that. It became a compliance industry worth tens of billions of euros.

The question is: who does that industry actually serve?

This is Part 2 of a 7-part series on modern sustainability. Next: why the system is designed so that nobody moves first — and how game theory explains everything.