Skip to Content
Road through a forest

How to Draw a Road Map to Sustainability-Driven Value

Leaders who understand that sustainability has business value still need practical advice for taking action.

By Fawn Fitter | 6 min read

Business leaders are awakening to the bottom-line impact of climate change, inequality, and growing demands for transparency. Those who are “gold medalists” in understanding and embracing sustainability as a business issue are still uncommon. But millions more could join them with the right guidance.

 

Chris Coulter, coauthor with David Grayson and Mark Lee of The Sustainable Business Handbook: A Guide to Becoming More Innovative, Resilient and Successful, is a coach for these prospective sustainability champions. The book doesn’t try to persuade leaders that sustainability has business value. The authors assume readers already understand the “why,” and instead provide them with the “how,” a road map for creating, integrating, and executing a high-performance sustainability strategy.

 

Coulter, the CEO of insights and advisory consultancy GlobeScan, talked to us about why it’s so urgent for the millions of companies who have not yet embarked on their sustainability journey to start now, and how those companies can use sustainability to increase business value.

Q: It’s one thing to understand that sustainability is important, but another to act on that understanding. What stops leaders from moving forward? 

Chris Coulter: One of the subtle but critical barriers is the sense that this “sustainability stuff” is complex and intimidating. That’s why we wanted to provide a practical how-to guide to help them embrace it more quickly, given the urgency of doing so. The latest report from the United Nations Intergovernmental Panel on Climate Change is a dire warning that we need to accelerate our transition to a low-carbon economy. Ongoing inequality in all its forms is taking a toll on our societies. Regulators are beginning to drive important changes that will impact business.

 

The real challenge is to get things moving in the near future. Starting in 2024, the European Union (EU) is going to require any company doing business in Europe to report on its environmental and social performance, and also to do a double materiality analysis reporting on activities that are material to both their financial performance and their impact on society, the economy, and the environment. That will affect 55,000 businesses in the EU, and millions more globally with an EU footprint. If they haven’t already adopted a reporting infrastructure to incorporate sustainability into their broader accounting, they don’t have time to waste.

Q: How much time does it take for an organization to do sustainability effectively? 

Coulter: It takes at least two years to build up a successful program, starting with the foundational elements. That includes developing a corporate purpose; determining the most pressing and relevant sustainability issues (such as, materiality) for your particular company; setting goals that are specific, measurable, achievable, relevant, and timely; and creating a strategy for reaching those goals.

 

Then you have to put your strategy into action by getting each part of the business to identify opportunities that align with your goals and exploring how new business models might enable faster, more substantial progress on sustainability while also driving innovation. You might also want to aim for external recognition: getting consumers to prefer your brand or other companies to use your sustainability efforts as a benchmark. Then the business value of sustainability kicks in: building stronger relations with customers, investors, and suppliers; attracting and retaining talent; and exerting greater influence with governments and civil society to be a partner of choice.

placeholder

SAP Insights Newsletter

Gain key insights by subscribing to our newsletter.

Q: How can leaders start the process of measuring sustainability in order to manage it without feeling completely overwhelmed? 

Coulter: Sustainability requires too much interconnectivity across the organization to work without a centralized function, so leaders need to establish a sustainability unit and hire someone with appropriate expertise to lead and build it, just as they would if they were going to start a new R&D or technology function.

 

To determine where and how much to invest, they also need to build a business case that defines what they mean by “sustainability” beyond simply complying with regulations. That’s where you find your unique value proposition. Start by looking at what regulators, customers, employees, and other stakeholders are doing around sustainability and what they want. Next, look at what the competition is doing and why, and gauge whether you’re ahead of or behind them. Finally, determine your internal goals for sustainability and what practical steps will enable you to achieve those goals and create more value for both the business and society.

Q: How can organizations use their existing data to determine where to focus their sustainability efforts for the greatest impact or to go beyond that? 

Coulter: Leaders need to define and communicate to internal stakeholders what a sustainability mindset looks like in the context of the business. The best practice is to use the data you already have to analyze the company’s positive and negative sustainability impacts and how they affect business performance. Reporting on that lets you see what you already do and don’t know, how you compare to your competitors, and any gaps with regulatory requirements, such as the proposed U.S. Securities and Exchange Commission climate disclosure rules. From there, you can determine what other data to collect to make or maintain progress.

Q: As sustainability becomes more embedded in business decisions, what should leaders do to ensure that it continues to both support and drive strategy? 

Coulter: The first step is to make sure that sustainability is, in fact, embedded in your business decisions!

 

You have to understand where your organization can find value in sustainability, which requires a broad exploration of how it fits into your customer value proposition, your employee value proposition, your influence in the marketplace, and so on. Defining value leads to a strategy that elevates sustainability into something that’s not just incidental, but core to your business.

placeholder

Sustainability Data

The path to a more sustainable business.

This isn’t relevant only to companies that are massive or consumer-facing. One example from our book is Chicago-based logistics group HAVI, which is a major part of McDonald’s global supply chain and so needs to align with McDonald’s sustainability strategy. HAVI created its own sustainability initiative that goes beyond alignment to actively drive McDonald’s goals. The company is now helping to develop new Happy Meal toys made of renewable, recycled, biobased, and/or plant-derived materials – a project that will help McDonald’s eliminate 90% of the fossil fuel-based plastics in Happy Meals by 2025 and make HAVI an even more indispensable business partner in the process.

 

Reporting is key to ongoing sustainability. It’s not just delivering a digest of data. Good reporting and analysis defines, articulates, and puts a target on your goals so you can explain those goals internally. It also provides the basis for the narrative that leaders use to share your company’s unique approach to value creation and sustainability.

 

Being able to tell that story is important. Companies that aren’t focusing on sustainability now are seriously lagging the demands of the market and dangerously exposed to risk. In a hypertransparent world, they’re going to face revolutions by stakeholders who demand more commitment to and clarity about how they’re part of the solution to a truly existential issue rather than part of the problem.

Meet the Authors

placeholder
Fawn Fitter
Independent Writer | Business and Technology

Further reading

SAP Insights Newsletter

placeholder
Subscribe today

Gain key insights by subscribing to our newsletter.

Back to top