Activating, Accelerating and Improving to Build a Sustainability Program
Sustainability programs help organizations align their long-term value creation initiatives with their corporate goals. Doing so within a measurable framework that supports accurate and transparent reporting is vital.
An effective sustainability program requires a comprehensive strategy that addresses short- and long-term goals, policies, reporting and data management infrastructure. Each of these elements is important in tracking progress towards realizing the organization’s sustainability objectives.
Sustainability is playing an increasingly prominent role in how companies operate, starting with their Boards’ view of risk management. Additionally, meeting regulatory requirements and building transparency throughout the supply chain and with capital allocators, customers and employees are key drivers of sustainability program adoption. Now is the time to shift from qualitative claims to quantitative measurement of performance and progress against holistic ESG metrics.
A sustainability program should consider three key areas and their strategic actions.
Activation
This initial phase focuses on identifying the fundamental pieces of a sustainability program such as determining ownership and objectives as well as understanding and measuring existing ESG activities that produce high quality decision useful information.
An important consideration is that the owner of the program needs to be highly respected in the organization as building and evolving a sustainability program is a multi-disciplinary effort.
Outcomes should include leadership alignment on the highest priority issues, organizational activation to turn theory into reality, and a framework development that guides program evolution.
Acceleration
Once the fundamental pieces of the program have been established, organizations should begin to set targets and develop an improvement roadmap.
Because a high performing sustainability program requires a multi-disciplinary approach, organization socialization and buy-in are critical. This can be accomplished by conducting a materiality assessment with key stakeholders and forming a working group to guide evolution of the program. Once these initial socialization steps are taken, it is time to identify new ESG activities and develop 5 – 10 KPIs, set aspirational goals, and identify initiatives that improve the company’s sustainability posture. Lastly, incorporate KPIs into the organization’s enterprise risk management framework and decide if the company is ready to report externally.
Outcomes should focus on quantitative targets that capture the organization’s ambition, performance baseline based on progress to date, roadmap of actions required to meet targets, and competitive benchmarks to calibrate across your industry peer group.
Improvement
The sustainability landscape continues to change and so does your organization. Continuous improvement concepts must be incorporated into ongoing management to support robust program evolution. This includes measuring progress towards targets, testing accuracy of reports, assessing the communication approach with key stakeholders, evaluating relevance of KPIs, benchmarking with peers, and review of information system needs.
Outcomes should consider a dashboard to measure progress and quantify results, streamlined and effective workflows to ensure consistent and reliable data, and key messages and proof points to bring your sustainability story to life with stakeholders.
