top of page

An A-Z of Sustainability: S is for Strategy

This week I’m talking strategy and in particular how to avoid the difficulties that can come from setting off with the wrong approach.


Over the years many sustainability managers have been appointed because their company has decided they need a “sustainability strategy”. Their role is to put this together and implement it. But it many ways they are being set up for failure if the objective is framed in this way. You simply can’t have a successful sustainability strategy that is separate from the overall business strategy. So how do you approach the strategy question then?


Approaching a business sustainability strategy


I would always advise that you don’t think about a separate sustainability strategy but consider the elements of the overall business strategy that relate to sustainability. Of course, you will want to think about what your key sustainability issues and risks are, and to ensure that these key focus areas are reflected. To do this I’d advise you conduct a materiality assessment (see An A-Z of Sustainability: M is for Materiality Assessment (cen-grp.com)) to identify these. Done properly, this will consider opportunities as well as risks and help provide the basis for integrating this into the wider strategy.


So, you’ve got the results of your materiality assessment and it’s given you some key focus areas, now what? Well firstly make sure you understand your current business strategy. It’s not uncommon for sustainability managers to not have full sight of this, but really you can’t do what you are being asked to unless you understand it.


Firstly, consider the things you think are required in each of your material sustainability areas. Are there elements that are already covered in full in the existing business plan? For instance, you may have identified that you have a particularly inefficient factory in terms of waste or energy, but the plan may already have that factory being closed or upgraded. It might not be because of sustainability criteria but the consequences are the same. For items like this you may want to highlight this sustainability connection too, so that people understand that there is a beneficial impact.


Secondly, look at areas where they are partly covered by the existing strategy or where their priority may need to be reconsidered when looked at with the additional lens of sustainability. For instance, a new market or product area may have been identified as requiring investment, but because of the sustainability benefits you may consider that this should be given more resources or an earlier focus. Of course, you are not just using your views here. Through the materiality assessment you will have had cross functional discussions and so can bring others into these strategic debates referring back to the materiality exercise as a start point.


There will then be new items that will need to be added. Perhaps regulatory requirements will require product changes or reporting requirements that are not currently possible. Think also though about how these aspects can bring associated benefits, aligned with the overall strategy. You might be forced to do things for regulation, but how can you extract commercial benefits from them at the same time? Can you get a first mover advantage by going ahead of the regulations, or can you raise the bar for the industry so that new entrants find it harder to break in or some competitors fall by the wayside?


You will also need to be on the look out for elements of the current strategy that could be at odds with what is required from a sustainability perspective. The plan might be to break into a new market through acquisition, but what if any acquired company has a higher emissions intensity or particular impacts that would have a material effect on the overall business? You’re not trying to veto plans but making sure that the decisions that will be taken are in line with the aspirations from a sustainability perspective too. Sometimes the plans will change as a result, sometimes not, but it will be from an informed sustainability perspective.


How to deal with growth in sustainability


One difficult area that always crops up is growth. Standards and targets in sustainability, like SBTi, are increasingly anchored in absolute reductions. But if your business has a strategy to double in size in the next ten years, how is that going to be possible? Well firstly you need to understand what is meant by the growth forecast. Is it profit, sales or units/volume sold? It isn’t unusual to find companies that have a revenue target for growth but no volume target or even an understanding of what the value growth target will mean for volume. For instance, a business may have a strategy to increase sales of higher priced, higher margin product lines and move away from the lower end of the market. This could deliver the revenue growth aspirations but not lead to any volume growth, indeed it could even lead to a volume decline. Or the growth may be expected to come from acquisitions in which case “re-baselining” of sustainability targets may be required anyway. So, it is key to get under the skin of what is behind the growth targets and how they will translate into sustainability impacts. This will then give you a projected baseline for the future if nothing else changes.


Most business strategies will be broken down into key platforms or “Must Win Battles” or some other construct to help focus attention and communication. One thing to consider is whether sustainability should be embedded in the existing focus areas or be highlighted as a separate focus topic in itself. There is no right answer here and it will depend in part on what your aspirations are on sustainability. If you are in the very early stages of sustainability thinking, you may want to highlight this as a focus area of the strategy that needs to be addressed, and the same is true if you think that being a leader in your industry on sustainability will bring significant commercial value opposite customers. But for other companies the best approach may be to consider the existing focus areas and add sustainability related actions under them or add in the sustainability related benefits of existing actions.


Collective ownership for sustainability


Whichever route you choose remember that you are looking to embed sustainability in the business strategy in a way that it has collective ownership and drives real action. You may be coordinating the sustainability elements, but it requires cross functional ownership to deliver - it’s not just your strategy.


If all this sounds too big, one place you could start is climate. With transition plans becoming a requirement and the Transition Plan Taskforce guidelines providing a very helpful structure, the process of putting a climate transition plan together can force some of these bigger conversations with senior management on overall strategy as this is specifically highlighted as an area to document. Going through this for climate can then give you an approach that can be followed for other material issues too.


It can be very daunting to be responsible for the “sustainability strategy” and it’s one of those areas where people like CEN Group can help as they have the experience from helping multiple clients in different industries. But however you approach it, if you can ultimately embed sustainability in your overall business strategy, connecting the topics to critical commercial drivers, you will stand a much better chance of success than thinking of it as a standalone strategy.


About the Author
Chris Cook, Sustainability Lead

Chris is a senior strategic leader with over 25 years’ commercial experience including sales, marketing, strategic planning and major business change initiatives at AkzoNobel and ICI. He has a wide knowledge of sustainability and how to integrate this into business having held senior sustainability roles at AkzoNobel for 12 years, including as Global Sustainability Director Decorative Paints and AkzoNobel Planet Possible Programme Manager. Chris is now an independent sustainability consultant and a pension trustee director.




Contact us

CEN helps businesses maximise their sustainability potential, performance, and ESG disclosure.


For more information about our services, please get in contact via email and our team would be happy to assist.


Jasper Crone, Director

Jasper Crone: Director


Roger Johnston, Director

Roger Johnston: Director

Σχόλια


bottom of page