5 Steps to Strong Sustainability Business Actions
Updated: Sep 25, 2019
Over four million climate strikers, mostly young activists, came out in force on September 20th, 2019, demanding at 2,500 events in over 150 countries on seven continents that the time to act is now, for people, governments and the private sector. Too many companies in Asia are still behind the curve. What are your company’s climate actions? (By the way, if you still doubt the science behind climate change, go back to sleep - you’ll be extinct in no time)
While sustainability in businesses has become a popular topic over the past years, it mainly still is a focus on risk mitigation, compliance, and reporting. Understanding the risk for the manufacturing operations and the supply chain, and, understanding disruptions caused by extreme weather events is essential, but focusing on these alone are just reactive and adaptive activities. Often managed by a sustainability department, these activities require involvement from finance, product development, legal, brand marketing, and PR. But there's more.
The key to future-proofing your company is a business transformation of integrating sustainability into the company’s core strategy; it includes weaning off fossil fuel and committing to 100% renewable energy; and, it is more than that. Consider Daimler’s announcement to stop focusing on R&D for the internal combustion engine and instead bank on the development of electric vehicles. A strong sustainability strategy empowers an organization’s leadership to discover new market opportunities, building competitive advantage, deliver value and market growth as well as a new product or service innovation, and most importantly, contribute to a better world for future generations. The next generation of customers, consumers, and the workforce won’t accept anything else.
Five steps to building a strong sustainability business strategy
A robust sustainability policy describes the business’ intention and action regarding environmental and social impact, in alignment with and inclusion of the company’s stakeholders, transparently with committed, science-based targets, and performance metrics. If you’re not already there, get started now. Here are the five necessary steps:
1) Conduct a Sustainability Impact Assessment
A sustainability impact assessment is an exploratory exercise to identify social, environmental, or governance issues, and their significance to stakeholders and company strategy (key here is to identify nature as a stakeholder). You need to engage with your stakeholders and find the critical areas of your business’ social and environmental impact. What are the current positive impacts? Which ones are negative? This current-state or as-is-analysis provides a foundation for the next steps.
2) Set a Sustainability Strategic Direction & Get Started on Actions
Equipped with the learning of step 1, you can now set the direction for integrating sustainability into your business’ core strategy, and set preliminary targets and actions to achieve for a defined schedule. Risk and standard compliance-related issues are just one part; another one is resource productivities and energy efficiencies not only for own business operations but also in the supply chain. Moreover, there are opportunities as a result of step 1 that point to new product /service innovation and new market opportunities.
3) Fine-tune Actions and Sustainability Strategy
The work started in step 2 will deliver first results; now it’s time to fine-tune your actions and fully integrate a sustainability focus into your business’ core strategy. The focus needs to be identifying opportunities to positively shape your business’ triple bottom line for people, planet, and profit: positive outcomes economically, for the environment and people. This step is most important because it will help you define your company’s and business’ purpose. It will make you realize that your current company’s mission and vision may no longer be adequate for a future that the next generation of consumers and customers are demanding. Embedding this purpose in your daily business operations will build your company’s culture. It will create trust with customers to return to your products and services; investors and partners to stick with you; your workforce to continue work with you; new talent to join your mission. (And you’d need help. Hire talent passionate about sustainability; hint: Millennial).
4) Define Future Company Success on the Mid-, and Long-term
An immediate next step is setting mid- and long-term goals and targets as a direct result of reformulating your vision and mission definition. Sustainability goals focused on changing and improving the business’ social and environmental impact. Environmental performance targets need to be science-based; this allows for performance comparisons, reporting on substantiated progress or lack thereof, and communicating such progress to stakeholders. Many companies have started to align their targets with those of the UN’s 17 Sustainable Development Goals (SDGs); the SDGs are “a universal call to action” to achieve a wide range of sustainability targets across the planet, people and prosperity to be completed by 2030.
5) Commit, Measure, Report
To demonstrate your companies actions, and the well-thought-out strategy and purposeful mission behind it, remember to be transparent and reports back on your progress. More and more institutional investors are increasingly looking at sustainability performance KPIs when evaluating long-term investment targets. More and more consumers stay away from brands that take their business’ sustainability performance not seriously (and greenwashing these days is easily spotted). Good reporting requires good governance - how is sustainability performance managed and held accountable? The Global Reporting Initiative (GRI) provides a sustainability reporting standard guidance that helps businesses to “understand and communicate the impact of business on critical sustainability issues”.
The Bottom Line
The longer a company waits to integrate sustainability into their core strategy, the more it will miss out, the more it’ll become obsolete. More importantly, the less you jump into action, the higher the chance your company is going to be held accountable for its environmental and social misses. If you’re a CEO, a senior leader, or employee, ask yourself: can your business afford not to act? Can your brand afford being seen as a sustainability laggard, or a green-washer? Can your company afford to miss out on new markets and product innovations? The Asia Pacific market shows a clear urgency to accelerate actions.
It takes a great effort to turn around a company from zero to sustainability hero. If you haven’t started yet, the time is now or never.