A sustainability strategy is no longer a nice to have. Demonstrating that you care about your people and impact on the planet is prerequisite to long-term organisational success. Around the world, regulators, investors, customers and other stakeholders are beginning to scrutinise corporation’s business models and demand that goods and services are delivered in a more sustainable way.
Defining sustainability
Sustainability is fundamentally about fulfilling the needs of current generations without compromising the needs of future generations. This is achieved by ensuring a balance between the three pillars of sustainability: social wellbeing, economic growth, and environmental care - also known as people, profit and planet.
ESG is another term that is commonly used to refer to a set of specific criteria to define Environmental, Social and Governance systems as sustainable. While ESG has received some criticism for being too opaque and misleading, the stricter reporting requirements around ESG have helped to remove some of the ambiguity surrounding the term ‘sustainability’ and provided greater focus for companies on what they should be improving.
What is a sustainability strategy and why is it important for businesses?
A sustainability strategy is a prioritized set of actions that focus investment and drive performance, creating environmental, social, and economic systems that can be sustained long-term. Sustainable development is incorporated into the short, medium, and long-term strategic plans of a business and signed off by leadership at the executive level. This involves detailing a clear set of sustainability statements, programs, plans, actions, and goals that outline how a business will compete in a particular market, or markets, sustainably.
What are the steps to creating a sustainability strategy?
Sustainability is a broad, complex and ever-evolving subject. Regulation is constantly being updated in many markets to reflect stronger commitments made by governments towards reducing emissions and protecting the planet. This can make it difficult to know where to start when developing your first sustainability strategy. Here are our six steps to sustainability success:
1. Know where you are starting from.
In order to know where you are heading you need to know where you currently stand. A baseline assessment should take a look at your organisation’s impact across the three pillars of sustainability:
The environment: How is your business currently impacting the environment?
The society: How does your business manage relationships between stakeholders and support communities?
The economy: How is your business balancing its financial obligations and need to be economically viable against its impact on other things?
2. Identify what matters.
When you first set out on your sustainability journey, there will likely be countless areas where you could focus your attention. Prioritising issues that are ‘material’ and core to the organisation is important in ensuring that the most fundamental issues are addressed well and the greatest impact is achieved.
For more information on how to prioritise your sustainability issues read ‘what is a materiality assessment and does your company need one?’
3. Establish the systems for accurate reporting
A strong governance system is essential to understanding whether the actions you are taking are having the intended impact. This means setting measurable targets, assigning responsibility for data gathering and tracking progress consistently. An additional benefit of collecting data is the ability to share your results with customers, employees and other stakeholders. Don’t be afraid to share your successes, as well as the areas where you have experienced challenges. See ‘The Rise of Greenhushing’ for more reasons on why sharing progress is important.
4. Ensure your sustainability meets international guidelines
Depending on the market you are in, there may be predefined requirements related to your industry that must be met. Even if there are not, it is always best to be aware of what international guidelines are recommending and how your company performs against them. The Global Reporting Initiative (GRI) is an international not-for-profit organisation that helps businesses to understand and communicate the impact of business on critical sustainability issues. The Sustainability Reporting Guidelines provide a framework based on principles, metrics and methods for measuring sustainability related impacts and performance by sector and topic.
5. Secure stakeholder input
Stakeholder input is essential in formulating a strategy that is comprehensive and robust. Seeking feedback from individuals and groups outside of management will ensure that stakeholder concerns are recognised and addressed. They can also help to provide an early warning signal and help companies stay ahead of competitors. Stakeholder input can be particularly helpful in helping to prioritise issues and shape how an issue is being perceived.
6. Strike a balance between long-term and short-term goals
The transition to a more sustainable business can be a long process. Equally, there are some things that can be achieved in the short-term to demonstrate progress. Organisations should select a variety of goals that will be achieved according to different timescales and that meet different ambitions. This will help to ensure the company is demonstrating progress while also setting goals that stretch it to be a leader in its industry.