Wednesday, June 19, 2024

5 Questions that corporates should ask themselves before engaging with sustainability

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The urgent need for drastic changes to mitigate the devastating effects of climate change has led companies to shift to be more environmentally conscious by implementing changes across all levels of their business operations. Companies recognize the opportunities that come with engaging with sustainability as well as the benefits accrued it. As a result, companies have shifted to products that produce less carbon, switched to the use renewable energy and cutting down on plastic items. 

Despite companies responding to the demand for sustainability due to shared concern of the environment with customers, there is a risk of “greenwashing” whereby a company uses the term environmentally conscious without any substantial sustainability efforts to support their claims. To prevent companies from the risk of greenwashing, it is important to consider several questions when engaging with sustainability which include:

Does your corporate culture value the environment and social impact?

To prevent the risk of greenwashing, it is crucial for companies to consider whether the corporate culture prioritizes value creation for society just as much as value creation for shareholders. Creating value to society as whole requires identifying the important ESG issues relevant to the company. For companies to achieve environmental sustainability, they should begin by defining what sustainability means to them and develop a strategy. This involves the leadership team of both the executives and board making a decision to commit to incorporating sustainability as part corporate’s culture, rather than simply providing sustainability reports to investors. Additionally, this calls for the leadership team to re – align the business models and strategies with the sustainability. 

Have you successfully engaged stakeholders – both internally and externally?

The most essential aspect of identifying and prioritizing a corporate’s major sustainability impacts is stakeholder involvement. While there are many great research tools available, they are no substitute for hearing directly from the individuals and organizations that are most vital to the company. Engaging stakeholders involves prioritizing them and documenting reasons why certain groups are ranked more important than others. Through interviews and surveys companies, learn about the matters that are most important to their stakeholders and obtain an understanding of their expectations of the corporate’s responsibility performance. Using the input obtained from the stakeholder groups can further justify prioritizing certain issues over others. 

Is sustainability overseen from top to bottom?

When engaging with sustainability, accountability must be established at the board and executive levels in order to successfully manage a corporate’s sustainability impact. Many businesses assign oversight of sustainability impacts to a committee of the board, usually the nominating and governance group. Companies, on the other hand, can strengthen governance by showing how their board oversight is linked to other internal decision-makers. One way to connect with decision makers is to create a council of cross-functional leaders who work with the corporate responsibility team to establish objectives and measure progress. 

What are the objectives and targets of your sustainability efforts?

The objectives and targets of a company’s sustainability efforts are typically centred around reducing the environmental impact of their operations and promoting sustainable practices. These efforts may include reducing greenhouse gas emissions, using renewable energy sources, reducing waste and promoting recycling, conserving natural resources, and ensuring ethical and responsible sourcing of materials. In addition to the environmental benefits, these sustainability efforts can also lead to cost savings, increased efficiency, and improved reputation and brand value. Companies may set specific targets for their sustainability efforts, such as achieving carbon neutrality or reducing waste by a certain percentage, and regularly track and report their progress towards these goals. Overall, the objectives and targets of a company’s sustainability efforts are aimed at promoting a more sustainable and responsible business model that benefits both the environment and the company’s bottom line.

Has sustainability been integrated into incorporates business strategy?

Companies have increasingly recognized the need to integrate sustainable practices into their business strategies, not only to meet regulatory requirements and consumer expectations, but also to achieve long-term success and competitive advantage. Many companies have made significant efforts to incorporate sustainability into their business strategies. This has involved a shift towards more sustainable practices in areas such as energy consumption, waste reduction, and responsible sourcing of materials. Some companies have also developed sustainability frameworks or adopted sustainability standards to guide their decision-making and ensure that sustainability is integrated into all aspects of their operations.

Moreover, sustainability has become a key driver of innovation and growth for many companies. In addition, companies that prioritize sustainability are often seen as more attractive to consumers, investors, and other stakeholders, which can further enhance their reputation and competitive position. However, despite these efforts, there is still much work to be done to fully integrate sustainability into business strategy. Many companies continue to prioritize short-term financial gains over long-term sustainability, and there is a need for stronger regulation and incentives to encourage more widespread adoption of sustainable practices. Nevertheless, the increasing awareness of the importance of sustainability suggests that it is becoming a more integral part of the business landscape, and that companies that fail to incorporate sustainability into their strategies risk being left behind.

Dr. Edward Mungai
Dr. Edward Mungaihttp://www.edwardmungai.com/
The writer, Dr. Edward Mungai, is a global sustainability expert. He is the Lead Consultant and Partner at Impact Africa Consulting Ltd (IACL), a leading sustainability and strategy advisory in Africa. He is also the Chief Editor at Africa Sustainability Matters. He can be contacted via mailto:edward@edwardmungai.com

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