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Sustainability Strategy

The new CSRD directive is expected to come into force in the very near future and will cover all business activities in Europe of companies with more than 250 employees or balance sheet total of 20 Million plus or Net Revenue in excess of Euro 40 Million.    SME's will be given a transition period to allow for a managed phasing in of the measures and proposals. It is expected that the SME sector will be required to report within three years from the effective start date.  In reality, however, many stakeholders (shareholders, employees, suppliers and customers) are already looking to SME' s to provide information on their carbon output.  Upward pressure from customers and suppliers will continue to grow together with downward pressure from National Government and EU Bodies.


 

Strategic Pillars

Practical aspirations with actionable content.   What matters most is not the words of the sustainability strategic document but the identification of tangible actionable items that can be quantified and addressed.
 
Quantifiable data that provides a benchmark for KPI reporting. Of central importance is the measurement of organisational carbon emissions as accurately as possible - either internally or using third party providers.  The use of upward margins of error can help when precise calculations might not be possible.  A Carbon Footprint Measurement for example is essential.
 
Develop both short-term objectives and a long-term vision within the same report.
 		 The sustainability strategy should have quantifiable changes in the short term as well as addressing more structural changes in a longer-term plan. 
 
Consider adopting a 'less is more' approach to the Sustainability Strategy
 		 A realistic and targeted sustainability strategy might be more valuable than a longer ambitious strategy that is not quantifiable nor achievable.  The buy-in of all stakeholders is required in any sustainability strategy and the simpler the aims and goals the more likely the success. 
 
Acute awareness of Green washing It is important that the sustainability strategy is sanity checked for any potential hint of greenwashing.  Being acutely aware of what constitutes greenwashing is essential in order to ensure that it is avoided in the development of a sustainability strategy.
 
Integration of sustainability measures within the framework of Board Level KPI reporting Similar to financial reporting the sustainability measures must be a feature of all board meetings in order to ensure they receive the resource and attention required.
 



 

Business strategy

Creating a sustainability business strategy

Strategy Article

Key Considerations

  • Role of the Finance Department
    The practicalities of monitoring and collecting the key data points for a sustainability strategy are all closely aligned with the accountancy profession.   The finance department of most organisations is generally the holder of all data points - the data is gathered retrospectively and draws heavily on invoices, purchases, mileage reports, travel expenses etc.  This would highlight very clearly the important role that the finance department should play in any sustainability strategy.  

     
  • Sustainability Strategy as an essential business requirement
    There is growing pressure from all stakeholders within businesses of all sizes to develop actionable and quantifiable sustainability strategies.  The EU is very advanced in implementing the CSRD proposal which will mandate increased reporting and accountability standards within the area of sustainability.  Well intentioned words in an annual report will be something of the past.  The most practical step a company can take is to carry out an initial carbon footprint measurement.  The completed report will survey the landscape and then be the crucial driver for the setting of practical sustainability goals and measures
     
  • Reduction, Carbon Neutrality or Net Zero Ambitions
    The sustainability strategy should consider making clear statements on each of the key ambitions above.   All three ambitions can be incorporated into one strategic plan with the possibility of being able to transition between the different goals.  The journey might set out initially with Reduction programmes moving to Carbon Neutrality and then a further transition to Net Zero. A sustainability strategy should outline clearly how and when such a transition might be possible.  



 

Hear from our experts

Book onto our upcoming webinars on Sustainability and Communication.

Introduction to Sustainability - Pat Kane, Founder @ PatKane.co + reuzi

Common definition, statistics and why businesses should care. The session includes tips, advice and useful information. the scale of the issue.

Communicating Sustainability - Fiona Donnellan, Founder @ Sustainable PR

When it comes to sustainability, brands can longer be silent. Learn how to promote your green credentials whilst building on your reputation and attracting potential new customers.

Fundamentally, you need to play defense on risk and offense on growth. That means figuring out how your climate strategy ties into the value creation story.

Laura Corb, McKinsey Listen to the Podcast