A 2010 Accenture global survey of more than 700 CEOs found that 93 percent see sustainability as important to their company’s future success. However, many business leaders struggle to build sustainability into their day-to-day operations.
The first thing that organisations and their leaders must accept is that there is no one-size-fits-all approach to embedding sustainability. Changes in the organisation as a result of embedding sustainability are different from the usual organisational change. Organisational change tends to affect an entity internally. However, when sustainability is integrated, its effects are far more wide-reaching as sustainability extends into the value chain of the operations.
In this respect, organisations have become more accountable to their stakeholders and society in general for the impacts of their EES risks. This is a different approach from the historical profit-driven approach as organisations now realise that their responsibilities extend further than the next financial quarter. There is an expectation for organisations to tackle issues posed by increase in population, climate change, burgeoning health issues and epidemics. For example, a pharmaceutical company may see an opportunity to innovate and create drugs to handle health issues but it should be aware of reputational risks if it develops desperately needed drugs and yet charge exorbitant amounts for such drugs.
A sustainability strategy is a framework to manage an organisation's economic, environmental and social impacts on its business as well as its stakeholders.
An organisation's sustainability strategy should be aligned with its vision and strategy, and should define the organisation's economic, environmental and social responsibilities as well as related future goals and objectives.
A clear and aligned strategy provides various benefits to the organisation, including easier communication of sustainability goals and objectives to gain support from key sustainability stakeholders including senior management and the Board of Directors (Board), and clearer alignment of economic, environmental and social efforts to maximise the effort invested.
Figure 1 below depicts how sustainability is embedded into the function of the Board. The Board is also responsible for ensuring the integration of values and stakeholder interests in corporate strategy.
Figure 1: The role of the Board relating to sustainability
An organisation’s Board of Directors plays an important role in developing a strategy for sustainability. Proper governance mechanisms can help a Board successfully integrate sustainability into its mandate. Below, is a strategy developed for Boards that are starting out and Boards that are ready to take it to the next level.
Stage 1: For Boards just starting out
Stage 2: For Boards ready to take sustainability to next level
The following are some of the key steps an organisation may consider when seeking to embed sustainability in its corporate strategy.