By now it has become commonplace for organisations and businesses to publish their own sustainability reports, with research being done to identify and analyse the various dimensions of sustainability. The topic of sustainability has become more important across all industries, and for good reason. For many companies, there is a correlation between sustainability and financial performance, and a sustainability strategy can be seen as an important necessity in order to be competitive. Nonfinancial metrics such as water usage and carbon emissions can reveal millions of dollars in sustainability-related savings. Companies now have the option to use the Return on Sustainability Investment (ROSI) methodology to identify and quantify the environmental, social, and economic impacts of investing in sustainable initiatives and projects.
The rationale for sustainable strategies makes sense for more and more companies, however, for many CFO’s, it is still difficult to draw the connection between sustainability and positive financial performance. Often, they can be thrown off by the terminology, language, and metrics being used by sustainability professionals, and separate reporting of financial and sustainability metrics only exacerbates the problem. Now that the links between sustainability and economic performance become clearer, it’s important for companies to start accurately tracking the returns on their sustainability investments and to carefully assess and plan future ones.
Implementing sustainable initiatives poses several benefits to business including reduction of waste, operational cost savings, development of new products through innovation, positive business image and reputation, and competitive advantage. Commitment to embedded corporate sustainability will be valuable in the long-term for clients, investors, their supply chain and employees.
Important steps your company can take to improve environmental, social, and governance performance:
- Identify your current sustainability strategies. If you haven’t clearly identified your sustainability strategies, including those that have a significant impact on the company, now is the time to do so. These could include activities that only have small sustainability components but haven’t yet been identified.
- Capturing data via auditing. Gaining some baseline metrics on your company’s energy, water and waste outputs is valuable to making decisions to support future trajectory goals. These processes will prepare you for implementing step 3.
- Identify the changes that are needed to operational or management practices in order to meet the previously laid out sustainability strategies. If your company already has in place certain targets and goals, identify what practices have changed now to meet your new metrics.
- Explore the non-monetary benefits of your sustainability strategies.
- Determine how to assess the financial worth of these non-monetary benefits. An example could be comparing a new practice or process with an established benchmark from your baseline audit.
- Calculate the overall monetary value of the strategy. This will help you identify where you want to focus your efforts and which strategies will generate the most value in the short-term and long-term.
The concept of sustainable development should be seen as an area of opportunity for business leaders around the world. Corporate sustainable development presents a new approach to developing long term success and prosperity through integrating social, economic, and environmental strategies. It’s important for companies to develop an action plan to help implement strategies to reduce their carbon footprint, improve recycling practices, adopt renewable energy and implement energy reduction solutions. They should work towards creating a future-proof plan around corporate sustainability by developing a more dynamic and multi-level understanding of sustainable practices. The market now favours companies who are taking steps to integrate corporate sustainability over their competitors.
At Glowing Green Australia, we specialise in preparing tailored sustainability plans, environmental report writing, and environmental auditing services for your business. If you are interested in finding out how your business can improve environmental, social, and governance performance, get in touch with us now!