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World leaders have adopted the 2030 Agenda for Sustainable Development and seventeen Sustainable Development Goals (SDGs) to tackle climate change, fight inequality and wipe out poverty. As one of the world’s largest economies, China has also announced its environmental sustainability targets to peak its CO2 emissions until 2030 and become carbon neutral by 2060. The pledge is more than just commitments to the environment, it is also an urgent call for companies to take sustainability as a business imperative.
Sustainability: From buzzword to boardroom talk
China’s sustainability targets mean legislation over Environmental, Social and Governance (ESG) and sustainability will become more common, incorporating factors into business strategies and decision-making processes is no longer a “nice-to-have” but a “must”. As many countries will enact sustainability regulations in the next few years, C-level executives and boards of directors must establish a sustainability agenda and deploy disciplines and strategies for these regulations in advance so they can meet the requirements in the future. With sustainability taking the center-stage in business, it requires corporate leaders to be ethical, forward thinking and determined to embrace sustainability transformation in a bid to turn commitments into real actions fostering a sustainably profitable business.
Driving your corporate-level sustainability agenda
But talking is one thing, acting is another. According to an IBM’s survey, when it comes to sustainability strategy, 86% of companies have one but only 35% have acted on it. Although many companies have established their sustainability plans, few of them have organizational structures that are designed to treat sustainability as a business imperative, leading to difficulty in embarking on their sustainability journey. Embedding ESG and sustainability in corporate strategy is not a one-time effort but an ongoing process that requires continuous efforts to manage stakeholder communications, and view and monitor sustainability initiatives.
To ensure the effective execution of a sustainability agenda, executives have a crucial role to play in developing practical steps across the organization and embedding sustainability into day-to-day operations. Here are four ways to drive your sustainability agenda forward effectively.
1. Address sustainability issues that matter for your organization
Many companies had established their sustainability plans already before they understood their key sustainability issues and needs, and it is the most common reason that a company struggles or even fails to execute its sustainability strategies. In fact, the definition of sustainable development varies according to the nature of a company. Companies should choose which issues – the specific ones, not overall – under the broader sustainability pillars they should focus on. The issues can range widely from building a green business to creating a sustainable supply chain, and managing environmental compliance to meeting ESG disclosure requirements.
Companies can then develop their sustainability agenda and strategy focusing on each sustainability issue the company is prioritizing. Identifying which issues should be prioritized can help companies make better decisions on resource allocation and save costs.
2. Cultivate ESG and sustainability talent
Neither strategy nor talent should be neglected from the sustainability agenda. ESG is a fast-changing industry that encompasses a broad set of issues, topics and regulations, new standards, requirements and strategies are expected to emerge and involve, which requires greater demand for ESG and sustainability professionals and advisory services. Leaders with the right qualifications in place serve as the fundamental basis for the development and execution of sustainability.
However, finding the right skill set is quite a challenge given there is a talent shortage in ESG and sustainability in the market. Instead of hiring new professionals, companies that have just started their sustainable development can train and upskill existing employees who have strong stakeholder management skills and an understanding of business operations and corporate strategy by providing internal or external training about ESG including regulatory conditions, due diligence, common frameworks and reporting skills. Apart from in-house ESG talent, companies sometimes need ESG specialists. In this case, for companies that are not sure what specialists they need, or only need it for a short period, an external consultant can be the best alternative to meet their needs. External ESG consultants can help the company review existing policies and strategies, structure ESG data and calculations, train existing employees and navigate framework and guidelines, helping the company to be well-positioned to proceed on its own.
3. Empower your sustainability team to make decisions
Be it a well-defined program and a qualified team, it is difficult to achieve ESG success without giving the decision rights to your sustainability team to execute the implementation of sustainability and the change management. ESG and sustainability is fast-growing and ever-evolving, empowering and giving decision rights to your sustainability team is material to stay on top of the latest trends and ensure appropriate measures are implemented in an effective manner.
Moreover, your team should also be empowered to hold other departments or sites accountable, for example, they can supervise and oversee the development of sustainability strategies as an individual committee by tracking the progress of and monitoring the performance of sustainability initiatives across the company so as to make sustainability-led decisions.
4. Leverage Technologies
The future is sustainability, so is digital. Digital transformation is intertwined with sustainability – neither can succeed without the other – altering the business landscape given today’s shareholders and stakeholders demand transparency and accountability in ESG metrics and performance. However, the process of collecting, analyzing and reporting ESG data is challenging and time-consuming, with the aid of digital technologies, companies can manage their ESG commitments effectively as fact-based data generated from various systems and applications can provide greater visibility and real-time insights into operations to support informed ESG-led decision-making.
For instance, IoT solutions that connect devices and systems can automate data collection and provide remote monitoring of energy usage and waste production, providing data that can be used in ESG reporting.
Moreover, regarding the “S” (social) pillar of ESG, a human resources management software can utilize employees’ data and help HR professionals tell their company’s story through ESG reporting, such as providing a holistic insight into Diversity, Equity and Inclusion (DEI) metrics.
How Companies can accelerate their ESG journey through FlexSystem’s Enterprise Resources Planning (ERP) Software?
FlexSystem’s ERP Software Solutions such as Human Resources Management System (HRMS) and Financial Accounting Management System can help companies collect and track ESG data, then provide comprehensive insight to optimize ESG reporting while staying compliant with the latest regulations. Contact us for more information.
