The role of sustainability has changed dramatically in a corporate context. How are business leaders approaching the development and implementation of long-term sustainability strategies?
It is no longer enough for companies to simply prioritise sustainability; it must be considered as a long-term objective. Doing so will see sustainability make a considerable difference to operational resilience, corporate reputation and the bottom line.
Over just the past few years, sustainable business has progressed from something that is unusual, to something expected, to now an integral part of business operations.
Companies around the world are considering the impact they have on on their environment and communities. With COP26 beginning on 1 November, global sustainability leaders met to discuss the value sustainability strategies can bring to corporate resilience.
Business are now poised to unite sustainability with business objectives at the senior-most levels. For Pernod Ricard, this makes utter sense. “Our vision and our mission is to create moments of conviviality,” says chief sustainability officer Vanessa Wright. “We call our strategy ‘Good Times from a Good Place’ because we want to bring these moments of conviviality from a good place. All our products come from nature and agriculture. It’s the physical good place, the terroir, the land; but it’s also in terms of how we behave as an organisation. Nature is the starting point of our strategy.”
That alignment between business objectives and sustainable strategy resonates with other companies, as well. The world’s largest wind power company, Vestas, has a vested interest in a sustainable future, but it has put its own sustainable strategy in place. This includes a drive toward a circular business model, an examination of transportation methods and fighting the climate crisis. “You need to integrate sustainability holistically,” says Lisa Ekstrand, senior director – head of sustainability at Vestas. “Our vision is to provide even more sustainable products for our customers, by making sure that the carbon footprint of wind turbines is even lower than today.”
Similarly, at Deutsche Bahn, the continued ability of crucial infrastructure, like the railways, to operate relies on a healthy environment. Andreas Gehlhaar, head of sustainability & environment at Deutsche Bahn points to the recent flooding in Germany as an indication that companies should be doing more to combat climate change. He says: “From an economic point of view, we can only run our business if there is a solid infrastructure. If the infrastructure is destroyed by a flood, then no goods, no people can be transported. That shows how crucially we rely on a stable environment. Sustainability, is, for us, actually at the heart and core of our company and our strategy.”
All of these commitments are forging a stronger standard of practice in global sustainability leadership. But, says Davide Vassallo, chief executive officer at DuPont Sustainable Solutions (DSS), a longer-term view is needed to further propel sustainability up the list of boardroom priorities: “We need to look at the value of sustainability on a much longer time scale and not only for the results of the next quarter of business. It’s about expanding the timeline, being more innovative in implementing the solution and having an absolute confidence that we are creating long-term value, not only for society, but for the company itself.”
Achieving this, is not just ‘doing good;’ it’s doing the business good, too. Ensuring a company is viable in the long term – whether that’s through sourcing agricultural products or laying rail lines – requires a consistent supply chain, consumers unaffected by climate disasters, and a stable environment and economy. “We are future-proofing the company,” Ekstrand says. She says even in the most challenging of circumstances, with Covid-19 wreaking havoc on supply chains, the value of sustainability has not diminished. “What has been really interesting over the last year is, you would think that sustainability would drop in importance, but the push from customers has not stopped…I think we have perhaps finally got to the point where mindsets are really starting to change.”
Wright echoes this, adding that cost cutting is not anathema to sustainable business. In fact, sustainable business can help improve efficiency and productivity. “The cost of not being sustainable is higher in the long term,” she adds.
However, says Gehlhaar, supporting and developing the solutions that will facilitate this also require a long-term approach: “It’s a marathon. It’s about innovation and developing the knowledge that can get us there. Of course, that would be need higher investments at the beginning, but if we can scale up and think more long term, we know that the cost will come down and thereby create more long-term value.”
If companies can prove the long-term value of sustainability, they will also be able to link sustainable strategies with improved resilience, and by extension, a reduction of risk. Vassallo says: “If the question is, ‘What is the connection between sustainability and resiliency?’ I think the connection point is in awareness. If we want to improve the resiliency of our organisation, we need to be aware of the risks and opportunities that are around our organisation.” Companies, he adds, should consider sustainability from the “board level to the workshop floor,” as a means of building awareness about risks and opportunities.
But there are challenges in the road to a holistic approach to corporate sustainability. The value of biodiversity is one critical area that needs to be addressed by more companies to ensure their long-term viability. Similarly, carbon emissions and the road to net zero will have an impact on companies around the world. Agricultural practices and manufacturing could be improved. Better health and safety programmes can lead to more efficient businesses. The list is nearly endless.
Companies like DSS, Deutsche Bahn, Pernod Ricard and Vestas are all leading the way in tackling these problems. But, the speakers agree, to truly take a leadership role in sustainability innovation, companies need to evaluate their progress, unite their business behind sustainable objectives and consider sustainability as a long-term, strategic process every organisation can benefit from.
For Vassallo, communicating about this process is crucial. He says the time is right for change to take place: “The challenge is execution. I think that we can really make a difference, but it’s more about doing the work and talking about that. This is really the right time to move the needle.”
Corporate sustainability strategies can make a difference – not only to the environment and to communities – but to a company’s ability to operate in the long term. Those organisations that can make sustainability a positive contributor to their success will be those that lead the way in sustainable business.
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Promoted by DuPont Sustainable Solutions