‘Sustainability’ is not just a buzzword on business agendas, it is an urgent call to action for the corporate world. Incorporating more sustainable business practices is essential for the sake of people and planet, but also for corporate survival.
Requirements around reporting emissions and meeting other sustainability criteria are far from uniform. Nevertheless, businesses that fail to work in a more environmentally and socially responsible way will get left behind by competitors, risking non-compliance as the regulatory landscape becomes more complex.
Neither will the journey end, as goalposts move and official requirements, such as through the Corporate Sustainability Reporting Directive, increase over time.
International companies in particular face complex challenges, but there are ways to break these down on the road to greater sustainability.
Size matters to sustainability
The challenges and existing requirements vary greatly depending on the size, type and location of a business.
Faced with making changes to company policies, practices and suppliers, small-to-medium-sized business will have greater agility to pivot and adapt how they operate and who with. They may only have a local market and legislation to consider. On the other hand, these firms have less financial resources to allocate and becoming a more responsible business can initially come with some greater costs, such as switching to more responsible suppliers that may be less cost-effective.
Whilst a larger business may have a deeper funding pot and more people to support the sustainability journey, these organisations face a complex task where operations span multiple international markets with respective local legislation and supply chains to manage. Businesses that are actively growing and acquiring other companies must quickly bring these operations in line with their ESG policies to ensure uninterrupted accountability.
The importance of buy-in
As in any project, setting clear goals and earning buy-in from all stakeholders are crucial steps. The board, senior leadership teams and employees at all levels across the business need to be involved and invested, or else new initiatives will fail.
Organisations can overcome the initial reluctance to invest the time and effort it takes to build solid ESG values by educating teams on the value of more sustainable business. As well as the environmental and social benefits, there is no shortage of research into the advantage of being a more ethical business when it comes to hiring and retaining talent and the growing appeal to potential clients, which both ultimately impact operating profits.
Once you have buy-in, people need focus. ‘Sustainability’ is a broad term and it is important to break it down into what it means for your business and set clear targets. Working with a reputable sustainability platform such as EcoVadis, for example, will provide structure and help the management of ESG risk and compliance, meeting corporate sustainability goals, and guiding overall sustainability performance.
Creating a tangible plan and building a project with milestones that involve everyone in the organisation will help to future-proof new policies and people are generally more eager to participate if there is an end goal to reach, such as achieving a particular sustainability rating.
What action to take?
ESG efforts can focus on enhancing employees’ wellbeing and improving policies, actions and training, such as in relation to human rights, health and safety, diversity, equity, and inclusion. Refurbishment and recycling of IT equipment are also among potential measures.
At emagine, as well as the above, over the last year we have put greater emphasis on our commitment to uploading and disclosing firmwide data to reduce CO2 emissions by signing up to the SBTi (Science Based Target initiative) and using more green energy.
We have also signed a sustainability-linked loan with our bank, linking loans to ESG goals. The firm must live up to certain targets relating to ESG performance in order to get a discount on its fixed interest rates. This of course carries risk and demonstrates the firm’s commitment.
Navigating the green maze of regulations and standards
ESG is booming, maturing and changing every day. To embrace sustainable business, regular analysis of the ESG landscape and attending webinars, reading articles and leaning on professional networks is time well spent.
Some movements in the ESG space are not set in stone and can therefore be open to interpretation, and the number of new standards and trends that are constantly emerging can be overwhelming. This reinforces the importance of staying informed, so businesses can prioritise what matters to their organisation.
Managing new acquisitions
In our experience, when acquiring smaller companies, they are usually less advanced in their ESG initiatives. We can use our experience of adopting more sustainable practices to bring them in line with our existing operation, including achieving internal buy-in, relatively quickly. Businesses can greatly help this process by only exploring merger and acquisition opportunities with companies that have similar values from the outset.
Every business is on a sustainability journey, whether voluntarily or not, as official requirements and consumer expectations around responsible business grow. An increasing number of organisations are voluntarily taking steps, such as disclosing emissions data through frameworks such as the Science Based Targets initiative (SBTi). To remain competitive and survive long-term, being proactive will be essential as well as the right thing to do.
- Digital Strategy
- Sustainability Technology
