Unlocking organisational sustainability

The imminent future promises significant shifts in sustainability focus and reporting standards for organisations tethered to compliance obligations.

The International Sustainability Standards Board’s (ISSB) IFRS® Sustainability Disclosure Standards, alongside impending legislative mandates for mandatory sustainability reporting in Australia, underscores the imperative for compliance readiness.

Conversely, organisations adopting a strategic stance towards sustainability foresee a competitive advantage in proactively addressing compliance obligations. Moreover, many entities recognise the strategic necessity of sustainability initiatives to secure access to capital, markets, and talent pools.

Whether prompted by stakeholder demands, regulatory mandates, a concern for the environment, or pure financial motives, one thing is clear: the sustainability imperative is here.

Manufacturers can no longer confine sustainability to a reporting activity by simply publishing aspirational targets in their annual reports. To make the progress necessary to shift the dial, they will instead need to commit to clear action.

Here are some ways to consider getting started:

Develop a strategy

The best strategies are generally built on scenario planning. These take into account multiple, equally plausible but divergent futures and identify both ‘no regrets’ actions that would be resilient under any scenario as well as signposts and leading indicators that you can monitor to determine how the relative likelihood of each scenario shifts as the future plays out.

Critical considerations for a sustainable strategy

Aligning with customer needs: Anticipating and fulfilling customer expectations fosters competitiveness and bolsters organisational sustainability.

Managing risk and governance: Integrating sustainability considerations into risk management and governance frameworks is pivotal for holistic organisational sustainability.

Adopting a long-term perspective: While the journey towards sustainability may be protracted, short-term actions are indispensable for effecting meaningful change over time.

Commencing the sustainability journey: Embarking on the sustainability journey necessitates meticulous planning and coordination:

• Identify key stakeholders and delineate their roles
• Conduct a thorough assessment of current ESG practices
• Prioritises initiatives through a materiality assessment
• Implement targeted strategies in alignment with organisational objectives
• Continuously monitor and refine sustainability performance

Ensure you have made explicit, systemic choices underpinning your strategy, from your winning aspiration through where to play, how to win, and the capabilities and management systems you need to execute effectively.

Create a roadmap

Create a roadmap to hit your end goal and define what levers you can pull. This may include reallocating spend into new markets where you are best able to differentiate, identifying strategic acquisitions, pursuing accretive partnerships, and/or redesigning processes and operating models to put sustainability at the heart of your decision-making.

Empowering organisational change

Effective sustainability initiatives require collective commitment and engagement across all levels of the organisation. Cultivating a culture of sustainability and fostering open communication channels are indispensable for nurturing organisational resilience and innovation.

As you embark on your sustainability odyssey, remember that every step forward is a stride towards a more sustainable future for your organisation and our planet.