Global sustainability and climate change issues are on the rise, so it becomes crucial to make your business adapt to the needs of the planet and build a sustainable culture. This means your company’s actions and objectives should be equally grounded in social, environmental, and financial concerns. Nonetheless, the road to a green-oriented organisation is more often than not obstacle-ridden, so you’ll need to take several aspects into account to ensure a smooth transition. Each decision should be cautiously made and each step gradually taken so that you can reap the economic, fiscal, and material benefits of a sustainability-driven business.
Apart from doing this for the planet, you do that for your company’s good. You’d be surprised by the number of employees, investors, and consumers interested in buying from or collaborating with a sustainable organisation.
Therefore, you need to spread sustainability into your company’s agenda, and here’s how you can do it:
Develop a solid business case
The first and foremost step is developing a business case for your enterprise to get the needed funds. This is essential if you run a company moving from corporate responsibility functions to full ESG (Environmental, Social, and Governance) and sustainability operations division. Surely, if you’ve already taken the green route and disposed of sustainability functions that need to be funded, don’t hesitate to go for such a business case development exercise. But be sure you specify all the required information in this sense, i.e., the fiscal, economic, and material advantages explicitly motivated by government regulations and institutional investors. It’s also advisable to point to growth funds moving into ESG-specific ETFs (Exchange-Traded Funds), giving access to a prospective enhancement in shareholder value and capital.
Identify specific focus areas
For sustainable success, the next step implies identifying the key focus areas impacted by sustainability. Organisations typically have several areas of operations varying from supply chain and research and development to the delivery of the final product to consumers. It’s important to understand that your company may have other needs than competitors and that you should tailor a sustainability strategy based on these very needs. Thus, consider everything from opportunities and future trends to challenges when making this decision. Different sustainability aspects will suit different businesses, and each organisation will typically have a distinct economic, social, and environmental impact. You may also want to consider factors such as location, industry, and company size, as they’ll help devise a comprehensive strategy.
We recommend completing a materiality assessment for SDGs (Sustainable Development Goals) for a measurable impact. This will help you determine which objectives truly matter to your company and which topics should be further prioritised to reach these goals. For a retail company like Walmart, for example, the attention is directed toward both upstream and downstream operations, as the ultimate goals of such a business include sustainable packaging and sustainable resourcing. But for a manufacturing business, the focus would be on exploring the three Rs – reduce, reuse, recycle – as regards materials used in the production process. Companies like Miltek Denmark can help considerably in this regard, providing manufacturing businesses with balers and compactors specially designed to take waste management to the next level.
Formulate actionable KPIs
Now that you have a clear vision of your organisation’s future ensure you translate it into actionable targets and KPIs (Key Performance Indicators). Sustainable development goals come with numerous targets, which, in turn, are accompanied by various indicators called KPIs. These KPIs help your company measure progress toward targets. Ideally, you’ll link the formulated goals with proper SDGs, targets, and KPIs. And, if you find it challenging to develop targets, consider the SMART goals framework:
ESG integration and metrics
This is where you can harness sustainable culture’s economic, fiscal, and material benefits. Surprisingly or not, institutional investors pay special attention to ESG metrics and search for this kind of information on a company’s digital engagement channel. They consider various sources, including ESG disclosure materials and ESG data. But be sure you make use of these materials wisely and use them as tools to promote business value, not only marketing. Governments and NGOs (non-governmental organisations) also look for your ESG communications and disclosures, so ensure you’re serious about this share of information, as it can make or break your attempt to implement sustainable development.
Pay attention to stakeholders
It’s critical to take into account both the business and its stakeholders when working on a sustainability strategy. That’s because stakeholders contribute to the success of any business, and, more often than not, a company can’t survive without them. Potential partners, investors, customers and employees belong to this category. Also, stakeholders are internal and external, each presenting their own characteristics and requesting a distinct approach to sustainability. External stakeholders are mainly consumers and investors, while internal stakeholders involve a broader category – various departments like Investor Relations, Corporate Communications, and Corporate Finance also belong to this category.
Engage your suppliers
Every company, regardless of its size, has a supply chain in one form or another. Some understand the meaning of suppliers to a business, while others don’t, so let’s clarify something. Without suppliers, companies wouldn’t be able to manufacture or deliver their products. So, it’s critical to establish long-term relationships with your suppliers. This way, you ensure they plan resources to meet your business requirements, offer you a certain level of security, and devote their time to help you minimise costs in the supply chain. Now, you may wonder what this has to do with sustainability. Well, a lot. After all, it’s the materials you receive from suppliers that lead to the final product. And it’s up to you whether you use environmentally friendly materials or not. The recommendation is, of course, to go for the former.
If you’ve just started your journey toward sustainability, here’s how to devise a perfect strategy. As you can see, you need to allocate time to understand your business’s needs, build measurable goals, and form meaningful partnerships.