3 Key Steps to Integrating Sustainability into Business

Today, there is no shortage of pledges and promises from organisations striving to reach their 2030 sustainability commitments, with an underlying urgency for companies to take meaningful actions towards their Environmental Social and Governance (ESG) initiatives. However, as sustainability and procurement are brought into the limelight and pressure from customers and investors to meet these pledges grows, the strategy around where to start and how to use these initiatives to make a true impact is often still not clear to leadership teams.

The question now is: how do organisations take immediate steps in their supply chain and sustainability initiatives to meet these pledges?

Integrating sustainability into business strategies

There is no single path to adopting sustainability-driven initiatives, but key steps exist that can help to successfully integrate sustainability into a business strategy.

The first step is education of the leadership team and workforce. All members of the organisation need to understand how incorporating sustainability into their practices can provide multiple benefits in the long term.

Secondly, it is important to define what sustainability means for every area of the company and to identify its benefits. From developing new products, investment decisions or services, to changing procurement practices, a business needs to demonstrate how sustainability has an increasingly central role in these decisions. Organisations must identify issues that have the biggest impact and are most relevant to stakeholders and to the business, to better understand where they should concentrate their efforts.

Once this has been determined, continuous benchmarking against a set of goals is imperative. This is where supplier collaboration tools can help. Defining key performance indicators to meet the identified goals will allow the business to detect areas for improvement and gather relevant data to track progress. For key stakeholders to accurately quantify sustainability and corporate social responsibility within a business, ESG ratings tools, such as Ecovadis can also be utilised, for measuring both metrics throughout the supply chain. This allows for meaningful comparisons between organisations.

Incentivise the right behaviour

Once a sustainability framework has been fully integrated into the organisation’s business strategy, these policies must be cascaded into conversations with the supplier ecosystem, to facilitate collaborative work towards reaching their pledges. After an organisation has implemented change within their own four walls and across their supply chain, they can also start sharing the information with other business partners and customers. A business’ own sustainability practices and policies are only as strong as its supply chain practices, and performance in this area is increasingly engaging the public conscience.

Leadership teams need to be continually incentivising the right behaviours, with robust governance models established throughout the organisation and with suppliers.

Incentivising suppliers can be done by demonstrating the positive impact they are making, such as holding supplier awards, that encourages them to partake in more sustainable practices for reputational benefit. This will enable organisations to collaborate with incentivised suppliers towards their sustainability initiatives; suppliers who don’t deliver sustainable practices will ultimately lose business to their competitors who do.

Digitisation in sustainability

Organisations need to ensure that their sustainability targets are measurable, viable, and impactful. One way in which the supply chain landscape is evolving to create this change is through the digitisation of sustainability. For example, organisations can use digital tools to map their environmental footprint and assess the impact of environmental shifts on their business. This creates a conduit for organisations to measure actions, outcomes and results towards their pledges.

Utilising data in this way allows organisations to show clear, measurable progress on how they are reaching their targets. This not only highlights progression for customer, investor, shareholder, and trading partner stakeholders but also enables them to engage with suppliers, using actionable intelligence to help them meet sustainability goals.

Looking forward, organisations need to be proactive when looking to achieve their ESG and sustainability commitments – there is no time like the present. To be successful in reaching these pledges, organisations need to digitally transform, to ensure they are integrating sustainability into their business strategy, and to apply leading sustainability practices, whilst also incentivising sustainable practices within their supply base.

Although implementing sustainability practices within an organisation can seem like a considerable cost upfront, companies will see a significant return on investment in future years. Investing in innovation to tackle sustainability challenges now will build a competitive advantage and brand trust with customers, whilst also making an impact towards environmental change that can be measured. Conversely, organisations that don’t make this change will see detrimental effects to their reputation and bottom line, leading to a loss of trust in the brand.

How to apply leading practices into your sustainability programs

Finally, there is no denying that applying leading practices into an organisation’s sustainability programs can prove challenging. To help we have outlined below a quick checklist of actions to successfully create and manage sustainable businesses and supply chains:

• Establish a strong vision: Create a strong sustainability and procurement vision that is aligned with the organisation’s overall business strategy.
• Set out sustainability targets: Determine clear targets and expectations for the organisation which can be effectively communicated to all employees, so everyone can embrace the sustainability vision and work towards reaching designated goals.
• Integration with procurement: Sustainability needs to be integrated across all procurement functions.
• Report your progress: Organisations need to ensure they are reporting all sustainability progress to their customers, stakeholders, investors etc. to show they are working towards their target milestones.
• Engage your business partners: Organisations need to align with their suppliers, distributors and other members in their value chain, ensuring they are undertaking sustainable practices. Effective collaboration is the key to accelerating sustainability across an organisation’s industry or value chain.
• Digitise your processes: Where possible look to see how you can digitise sustainability in order to map and continuously track progress with real-time, single source of truth data.