Sustainability as a Business Unit

Sustainability in business refers to a company’s strategy and actions to reduce adverse environmental and social impacts resulting from business operations. It also relates to incorporating sustainability related issues into the impacts, risks and opportunities of the business model. Beyond helping curb global challenges, sustainability can drive business success, create operational and cost efficiencies, and develop new growth opportunities.

Sustainability in the corporate environment has become an increasingly important priority and one that is driving strategic transformation globally. With the pressure to embed sustainability in business practices increasing, the need for a holistic, organised, and systematic approach is required.

What are some of the challenges facing organisations when it comes to sustainability?
The challenge to be addressed should be establishing a sustainability strategy, or incorporating sustainability into the current business strategy. Sustainability has long been on the agenda for many companies, however sustainability actions may be disconnected from their core strategies. Rather than taking a fragmented, reactive approach, treating sustainability as a key issue with a direct impact on results can drive business success. Consequences of not implementing a sustainability strategy could include increased exposure to external events, forcing your company to be reactive. This lack of streamlining across departments resulting in lost opportunities and inefficiency, potential for reputational risk, or regulatory fines.

Begin with the ‘Who’
Many businesses struggle with how to start building a sustainability strategy. Like any organisational strategy, it should begin by looking beyond your business and customers play a key role in determining the starting point.
If your business is part of a larger company’s supply chain, you may be impacted by the EU’s new Corporate Sustainability Reporting Directive (CSRD). While reporting under CSRD is mandatory for some larger companies, most SMEs won’t need to report directly. However, as part of the supply chain, you could be asked to provide information in the future. Therefore, it’s crucial to assess what your larger customers will require from you in the next three years as you develop your business’s sustainability strategy and roadmap.

Your ‘Now’ – What are you already doing?
While many businesses tend to focus on the environmental aspect of ESG, they may already be doing significant work in the Social and Governance areas. Social considerations encompass a wide range of activities, including community involvement, employee health and well-being, and labour and human rights. In fact, many of these practices are often embedded in staff handbooks and existing company policies. Recognising and building on what your business is already doing in these areas is an important step in shaping a comprehensive sustainability strategy.

Your ‘Future’ – Where Are You Headed?
For most SMEs, the key priorities are growing the business, adding value for customers, and attracting and retaining top talent. Developing a sustainability strategy can help achieve these goals. By considering customer expectations and conducting a situational analysis, businesses can identify the gaps in their sustainability efforts. This forms the foundation of a strategic roadmap, which might include steps like measuring the company’s carbon footprint or pursuing certifications such as EcoVadis for B2B or BCorp for B2C.

The ‘How’
As with any strategy, implementing sustainability requires proper resourcing, which can be challenging and costly, depending on customer expectations. At the roadmap stage, it’s essential to budget for these activities and carefully consider how the strategy will be executed. Establishing a Green Team or appointing Sustainability Champions within your organisation can help drive the implementation and ensure you meet your sustainability goals. Sustainability work also benefits from sponsorship and leaders who can drive the transformation. The wider leadership team plays an important role in collaborating across the company and delivering on key aspects of the sustainability transition.

They play a critical role by contributing diverse experience, resources and perspectives to drive the organisation towards achieving the goals laid out. The collaborator group and wider leadership team have key responsibilities in facilitating knowledge sharing, innovation and implementing sustainable practices.

If pulling a team of dedicated people from within your organisation is not an option, finding outsourcing sustainability support may be the best option. At Pragmatica, we act as an outsourced sustainability partner and provide tailored sustainability services as well as deep expertise, to help our clients to add value to their sustainability journeys.

BREANNA LARSEN Pragmatica Sustainability Executive

If you would like more information on bringing a sustainability partnership to your organisation and meet your specific needs, please get in touch with one of our experts: [email protected]

This Business Support article featured in the September/October 2024 issue of The Hardware Journal.