September 25, 2023

How to reach your ESG & sustainability goals

Last month our ESG experts discussed WHY you should be looking at sustaina-bility-related topics for your business and highlighted the top 5 mis-takes companies make.

We've summarized these here for you:

  1. Communicate too early:

You can interpret this 3-word sentence in many ways. So let us specify. Communicating in an overly positive way very early in your sustainability roadmap. Either internally to your employees or externally via marketing.

An example: We’ve all seen companies communicate proudly about the doppers they gave their employees, while they’re delaying plans to tackle their actual impacts. You can all guess why you shouldn’t do this. You’ll be branded as a green washer in no time.

However, that doesn’t mean you shouldn’t communicate. This brings us to mistake number 2.

  1. Communicate too late:

Sustainability integration is an investment in your mid-to-long-term business. This of course means that investments come first, returns later. And with any investments, the earlier these returns come, the better.

Acting on sustainability sends a very positive message to internal and external stakeholders. It would be silly to not leverage these positive actions. So don’t wait until you’ve reached your goals to start communicating.

Do keep these 3 words in mind. Humble, honest, vulnerable.

Don’t exaggerate your efforts, be honest about what you haven’t done yet, and dare to be vulnerable to your challenges and even failures. Dare to admit you’re not there yet, but that you’re trying to get there. That way you’ll avoid greenwashing and even generate goodwill surrounding your initial steps.

  1. Organize 1-dimensional ways:

There are many ways a company can set up a structure, which makes it impossible to truly become a sustainable company. You can actually see this as a way of greenwashing. Because you wouldn’t organize in these ways if you really found sustainability important.

So, what are these 1-dimensional ways?

  • Only bottom-up. Yes, you need to engage your employees. But you shouldn’t rely on their actions only. You need a strategy with targets and a roadmap to those targets.
  • Only top-down. Not all knowledge is gathered at the top. You’ll reach sub-optimal results (or no results at all) if you don’t engage different departments.
  • A separate ESG department doing their work in the margin, without a mandate to truly collaborate with different departments. If you can’t engage with the departments doing the actual work, you’ll have no impact whatsoever.

An efficient and effective structure has these 3 elements:

  • Central ownership: A central organ that keeps an eye on the strategy and the progress on the roadmap.
  • Decentralized engagement: Leaders in different departments, who know their domain and can thus estimate how they’re related to the sustainability efforts of the company.
  • Communication flows: From the central team to departments and vice versa. That way detailed operational information flows to the center, and strategic information and bigger market trends flow to the departments.
  1. Treat it like a compliance exercise:

What you see happening in lots of companies, maybe even in yours, is that management looks at sustainability through BAU glasses (Business-As-Usual). How can we continue doing what we’re doing, in the way that we’re doing it, but add some sustainability sauce to it, to comply with regulation?

If you treat sustainability as a compliance topic, you’re going to leave lots of opportunities on the table and open yourself up to mid to long term risks.

Dare to really look in the mirror and look at your current business model critically. What are your impacts? How vulnerable is your business to outside events? What are the risks of your current business model? Is it fundamentally sustainable?

If the answer to this last question is “No”, it’s a sign of good management to start transforming your business model now, when you can control the pace and can work with a gradual phase-in phase-out. Because eventually, whether it be in 3, 5, or 10 years, legislation will force you to change. By changing now, you can set the pace AND leverage your actions as differentiating factors in the market.

  1. Consider it a one-and-done:

Sustainability as a legislative and business topic is not going away. Approaching it as a one-time project towards a report or audit is rather shortsighted. You should organize for a marathon and handle it that way, at a pace you can sustain.

By implementing the right processes, governance, and organization structure to manage this strategic topic, just like you handle the financial or operational side of your business.

But don’t forget about the IT side of things either, such as tooling and systems to monitor and calculate all relevant topics. Using Excel and Word will only work for so long.