Externalities are environmental, social, and economic impacts from the operation and activities of an organisation borne by others external to the organisation. They are not reflected as a cost to the organisation, even though there is evidence to show that over time these externalised costs converge and get internalised by the organisation.
The ability of organisations to incorporate externalities into decision-making enables them to consider the implications of actions taken now and in the future. It summarises the essence of sustainability thinking and reporting.
