How do you adjust your sustainability strategy to meet market and stakeholder demands?

It is also a great place to re-evaluate your wider stakeholder needs and to readjust your businesses purpose. Customer demands of companies have changed with growing awareness of the climate calamity and the net zero targets. Employees are also preferring employers with great purpose in addressing the wider societal, environmental and economic challenges. Governments, regulators and neighbourhoods where the business operates are also getting conscious and demanding actions from businesses.

A great assessment tool is the materiality analysis on a regular interval and a regular pulse check conducted annually. There is nothing quite as insightful as hearing directly from key stakeholders - customers, suppliers, investors, and employees - as to how their expectations are changing and evolving regarding what ESG issues are most important for your company to measure, manage and be transparent on. Understanding these stakeholder trends and how they evolved over time helped one of my sustainability teams identify emerging and waning issues. Mapping these trends to the most important growth drivers for the company allowed us to prioritize/reprioritize where to focus our highest value add activities yearly. Key is to really listen.

In my opinion, sustainability is no longer optional for any organization. Sustainability strategy is not just aligning with policies, Future is about integrating sustainability in the DNA of the organization. Organizations that fail to do so will quickly see themselves isolated in the market place.

I agree, and would add that having embedded Environmental, Social, Governance (ESG) priorities at the core of your organizations strategy, the next step is to embed ESG across business units, ensuring that your organization achieves its defined ESG ambitions.

A lot of frameworks and benchmarks are still evolving and will continue to be so in near future. What is important is to recognize that first movers will capture market share and incremental opportunities. Advanced market players have already started to develop products and operating model, that will be future ready soon.

Historically sustainability reporting has been a year-end process that did not have full linkages to the business. As a result the reporting process in many cases has been unstructured, not integrated in systems and not serving performance management. The current regulatory developments provide the opportunity to not only meet future requirements, but also integrate these into systems, processes, risk management and performance measurement. Organizations need to do more than respond to reporting requirements. When strategy and reporting are executed well, it will impact many parts of your organisation: strategy, finance, IT, business management and sustainability.

Companies should also invest in infrastructure/resources to learn from the macro sustainability trends and to keep it's customers abreast of the changes some of which may include changes in customer behaviour. One such example is product use at optimum energy setting that not only saves energy and money for customers but also reduce Scope 3 emissions for the company. Engagement programs and awareness campaigns are extremely useful in this regard.

Another thing to consider is whether having sustainability aligns with your business goals or not. Sometimes, within small startup ecosystem, sustainability can involve huge costs that might adversely affect the PnL. Hence, one must align it with business needs and set up timelines accordingly.