The sustainability agenda has moved on from installing a few LED light bulbs and putting in a few room thermostats. Businesses are under growing pressure from regulators, consumers, investors, employees and other stakeholder to become more sustainable, and to prove it.
That can be a difficult and complex undertaking for many companies which want to avoid accusations of greenwashing but don’t really have a full picture of their own upstream and downstream impacts.
According to head of KPMG sustainable futures Russell Smyth, the key is for organisations to be transparent in their ESG (Economic, Social and Governance) ambition, disclose their targets, and report against them.
“Organisations need to deepen their levels of engagement across their value chain both internally and externally, from suppliers to shareholders and employees to board members to understand and meet their stakeholders’ ESG expectations,” he adds.
“Clarity makes ESG more effective and easier to embed,” Smyth continues. “Identifying the issues that are material to an organisation and its stakeholders helps to prioritise day-to-day efforts and navigate the complex, ever-changing ESG landscape.”
Aideen O’Hora, co-founder of sustainability consultancy SustainabilityWorks, says it starts with the business owner’s understanding of sustainability. “We ask clients what they mean by sustainability and understand by it. They often think it just relates to the environment, but there are the social and economic sides as well. You need a balance of all three.”
O’Hora’s co-founder Karen Deignan agrees. “When companies are reporting we encourage them to think about it in holistic ways,” she says. “It’s very important to consider people issues and the governance and environmental sides as well.”
“The approach we take is to advise people to think about it in a structured way,” O’Hora adds. “Sometimes people react and take an ad hoc approach, but they need to take a longer term structured approach. At an early stage of working with a company, we encourage them to talk to stakeholders, customers, partners, board members and investors to get an external stakeholder perspective on the priority issues to work on.
‘Bold decisions’
“We very often find these conversations give companies a lot of comfort in making bold decisions on what to do. The word is a little bit overused, but it really is a journey. It’s not going to happen overnight.”
At that point, companies should home in on the issues that are most important for the business, says Deignan. “They should carry out a regulation and policy check as well. They need to look at what’s coming down the tracks. It could be waste or other environmental issues or the social side of things.”
After that, it is about developing a clear action plan. “This should span a number of years and it is important to make it part of the overall organisational strategy,” she continues. “The goals, actions and targets within the plan need to be assigned to people in the organisation. You need to get lots of different people involved in it as well. That requires a lot of co-ordination, and it will require multiple years if the company truly wants to be a sustainable business.
'There are trade-offs that have to be made and people need to be honest about them'
“Measurement and reporting are key. The communication piece is really important as well. You need to communicate to people about what the business is doing, why, and how it’s getting on. You need to show you are taking it seriously. It’s critically important to be honest in those conversations. There are trade-offs that have to be made and people need to be honest about them. This will ensure you can’t be accused of greenwashing.”
Accepting the need for an action plan is one thing, having the skills and capability required to develop one is quite another. “The ability to develop and implement corporate sustainability strategies was identified as one of the top skills priorities to enable the transition to a low-carbon economy in the Talent for Ireland’s Green Economy report we published last month,” says Skillnet Ireland director of communication and policy Tracey Donnery.
“Businesses do want to walk the walk but are not sure how,” she adds. “Business leaders and owners need the skills required to integrate sustainability into their overall business strategies.
“The Skillnet Ireland Climate Ready Academy has recently launched a Sustainable Leaders Programme in conjunction with Chambers Ireland to support leaders in that area. This new free programme for SME owners and leaders is geared towards helping them understand how to develop action plans and take concrete steps towards becoming sustainable businesses. Climate Ready already offers a wide range of talent development solutions in renewable energy and green technology, environmental, water and energy management, and sustainable strategy and sustainable finance.”
Online masterclasses
The Sustainable Leaders Programme features a series of online masterclasses on different aspects of sustainability strategy delivered by experts in the field. The focus is on corporate sustainability strategy and carbon management, and in particular how leaders can identify where they can build sustainability into their corporate strategy.
'Get the metrics and data together to understand your carbon footprint. That's just a number but it can guide you to the areas of biggest impact'
“The programme will help them put real and measurable targets in place for carbon reductions,” adds Donnery. “That will help people see it in a concrete way. It will also help them to develop an understanding of what actions to take. Peer learning from other businesses which are further on the journey on different aspects of sustainability is also important. That’s one of the things the academy is facilitating.”
Finally, Aideen O’Hara advises companies to start with the basics. “Get the metrics and data together to understand your carbon footprint. That’s just a number but it can guide you to the areas of biggest impact. These can be across the wider supply chain or anywhere and businesses need to ask themselves what they can do to lower that number. Also, look for incremental changes, those small actions which can deliver quick wins. They are very helpful.”