There is a new model for sustainable business in the world, one that may work to create better strategies in today’s changing environment.
The new business ethos must be done at the board level. Only good governance can help a business move from the past, where sustainable strategies have been both individualised and often inefficient, to the future.
Strategies for governance at this stage include:
- Emphasizing long-term value creation over sustainability oversight and performance scrutiny.
- Strengthening board stewardship of sustainability.
- Aligning incentives to sustainability performance.
- Recruiting board members with expertise to understand the strategic implications of sustainability issues.
- Providing training on material sustainability issues.
- Creating external advisory councils.
BSR has developed a new framework to help guide businesses through their necessary evolution to attaining and influencing sustainability. This three-part structure is broken down into three requirements that business can utilise for their own, and the worlds, benefit.
To be sustainable, companies need to ACT. In order to act, a company needs a properly written sustainability plan.
Most strategies for sustainability are written in isolation and don't take into account a businesses broader goals or organisational context. Too often sustainability strategies lack the necessary preparation for legitimate implementation.
Additionally, sustainability has taken a back seat to the requirements of short-term profiteering. Emphasise needs to be placed upon long-term value creation, to find ways to move beyond temporary performance pressures that can prevent progress on sustainability.
To implement sustainability the correct way, business strategies need to have sustainability at their foundation. Sustainable concepts need to be reframed into terms and metrics that better fit the organisation's performance goals, and reporting must take into account the impact that the companies sustainability measures have had, as well as the value (financial, press, relationships) of their sustainability efforts to date.
Businesses need to enable their key stakeholders to take ownership of sustainable decisions. This means creating of diverse, collaborative conversation between business and the stakeholders throughout their profit chain.
This can mitigate risks (such as loss of reputation) but also helps businesses to create a culture of acceptance, innovation and ongoing future earnings).
Involving the people who stand to gain or lose in the future of the company empowers them to implement the best strategies for the overall business, as well as for their own area of expertise.
By changing the way we engage stakeholders from the ‘Usual Suspects’ to an array of diverse voices we enable positive and sustainable change to happen.
Despite these implementations, it is hard for businesses to achieve their full potential without reforms around the legal frameworks around due diligence and disclosure.
Business has enormous influence over the way society operates. By pressuring policymakers to create incentives for companies to change their practices, the future can only include wealth, happiness and sustainability.
You can read the full report here: https://www.bsr.org/en/