Understanding what sustainability means for an organisation is essential in implementing a sustainability strategy.
A good understanding of how sustainability affects the various functions and aspects of an organisation ensures that there is a business case approach to the adoption of sustainability by the organisation.
Organisations can maintain a competitive advantage and respond better to disruptions in their operating environment.
Management must evaluate this impact across the following areas to reap the benefits of adopting sustainability across the business.
On the strategy front, organisations can develop innovative and brand-enhancing sustainable strategies to further their growth ambitions and market expansion.
It also enables organisations to have relevant strategic ambitions to meet customer expectations, solidify differentiating competencies and maintain competitive advantage.
For products, organisations can design new products across the sustainability value chain that appeal to their customers and drive their growth by creating new opportunities.
From a finance perspective, integrating sustainability results in better application of judgments related to financial reporting through sustainability-related scenario planning for forecasting, budgeting, capital allocation and reporting.
On the risk management front, organisations can integrate sustainability risks into their existing risk management frameworks and enhance their risk modelling and stress testing capabilities while managing and responding to emerging sustainability risks.
Management can also apply sustainability within an organisation’s operations, such as aligning employee incentives and overall propositions with sustainability issues consistent with the organisation’s values and stakeholder expectations.
Organisations can also enhance their supply chains through their procurement teams to ensure sustainability risks are better managed and that suppliers adhere to consistent standards to minimise risks across their supply chain.
The technology and data infrastructure across an organisation could be enhanced by management from a sustainability perspective through a revision to data strategy, infrastructure, and policies.
It also involves the application of technology tools to aid the development and delivery of sustainability-related products.
The internal audit team is also an aspect of organisations that interacts with sustainability through the design of audit programmes across the organisation’s sustainability agenda, ensuring accountability and verifying the data relied on for decision-making internally and communication with stakeholders.
Some of the other areas that are impacted include legal and compliance, change management, communication and investor relations.
