Sustainability Management
A journey more than a destination
September 2023
© 2023 Business for Social Responsibility
Terminology Overview
Impact
Citizenship
Climate
change
Corporate
Responsibility
Stakeholders
Shared
value
Trends in Terminology
The "sustainability" industry has evolved from a public to private sector focus over the past 30 years and
terminology has evolved along with it, moving from terms evoking development to those evoking corporate
ownership, indicating deeper integration of environmental, social and governance issues as core to the
business. There are some early indications that ESG may be emerging as a new term driven by investor
interest.
Corporate (Social) Responsibility
Sustainable Development Corporate Citizenship Sustainability ESG?
1990s 2000s 2010s 2017+
“Sustainable development is “CSR/CR tend to be a “Sustainability “The integration of ESG
development that meets the collection of programs represents a concept can be a key
needs of the present without that address social and that is more easily differentiator for
compromising the ability of environmental concerns” integrated into the core companies competing to
future generations to meet —Forbes, 2011. purpose of business.” attract or retain long-
their own needs.” —Eric Olson, BSR, term capital”
— Brundtland Report 2016 — Ulrika Hasselfren,
ISS, 2017
3
What is ESG?
“ESG” has emerged as a term often favored by investors to refer to diverse range of sustainability-related
topics that are relevant to investment and business.
“ESG means using Environmental, Social The Principles for Responsible Investing offer examples of
and Governance factors to evaluate common ESG topics:
companies and countries on how far
advanced they are with sustainability.
Once enough data has been acquired on
these three metrics, they can be
integrated into the investment process
when deciding what equities or bonds to
buy.”
—Robeco
4
What is Sustainable Development?
Sustainable development has been defined in many ways, but the most frequently quoted definition is
from Our Common Future, also known as the Brundtland Report:
"Sustainable development is development
that meets the needs of the present
without compromising the ability of future
generations to meet their own needs.”
—Brundtland Report
5
UN Sustainable Development Goals
The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared
blueprint for peace and prosperity for people and the planet, now and into the future. At its heart are the 17 Sustainable
Development Goals (SDGs), which are an urgent call for action by all countries - developed and developing - in a global
partnership. They recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve
health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to
preserve our oceans and forests.
6
Disruption is the new norm
• The context for sustainable business is radically different than it was even a decade
ago, as evidenced by the accelerating energy transition, highly disruptive technologies
such as artificial intelligence, new business models, increasing geopolitical volatility,
nascent climate disruption, and new expectations from stakeholders.
• The world around us is changing more rapidly than ever before, with massive
implications for how we can achieve a just and sustainable world.
• The COVID-19 pandemic demonstrated the value of strategic resilience as it forced
businesses to rapidly adapt to a fundamentally different and more uncertain operating
environment. Many sustainability issue areas, including human rights, inclusive economy,
and more have been impacted.
• Establishing strong policies, systems, and transparency helps to manage the challenges
and bold goals help companies meet the moment with an eye toward building the
future.
7
Why is it important to have a strategy that addresses sustainability issues?
A focus on sustainability helps businesses to maximize value creation opportunities, minimize financial risk,
and address the ethical imperative to avoid harm to people, the environment, and livelihoods.
Lower cost of capital, access
to new markets, investor
value
Finance
Increased brand value,
Access to new sources
consumer demand,
of ideas, expanded
Innovation Marketing company reputation
thinking
Sustainability
Lower input costs,
Improved attraction,
increased efficiency,
engagement, and
regulatory compliance Operations Talent retention
8
How can companies define and implement a sustainability strategy?
The basic components of any strategy project can be summarized across the three elements below.
1 Set Direction
• Understand Context
• Develop understanding of current
business strategy and management
approach, relevant trends and possible
disruptors, the peer landscape, and
relevant standards and frameworks
• Prioritize
• Determine the scope of the strategy and
prioritize issues to focus on, based on
their importance to the company and its
stakeholders, as well as potential for
impact both positive and negative
9
How does materiality inform strategy?
A materiality assessment is a widely used approach to help companies identify, assess and prioritize
sustainability risks, opportunities and impacts, for the purposes of sustainability strategy and reporting. BSR’s
methodology considers double materiality, in alignment with leading sustainability disclosure standards and emerging
regulation.
Materiality helps to answer:
• What ESG topics, risks and opportunities can impact the company?
• What are the company’s positive and negative impacts on society and
the environment?
• Which ESG topics would likely be of interest to investors? Other
stakeholders?
• How can we align business goals and sustainability priorities?
• How can we identify the business models, solutions, value chain
factors with the greatest potential for business growth and
sustainability performance?
• How can we more effectively communicate with stakeholders about
the scale, scope and impact of our sustainability activities?
10
How can companies define and implement a sustainability strategy?
The basic components of any strategy project can be summarized across the three elements below.
1 Set Direction
2 Develop Strategy
• Understand Context • Design Strategy
• Develop understanding of current • State what it is the strategy should
business strategy and management achieve, the overall vision and what the
approach, relevant trends and possible main components of the strategy will be.
disruptors, the peer landscape, and
relevant standards and frameworks • Position Strategy
• Prioritize • Assess competitive positioning and
ability to influence impacts related to
• Determine the scope of the strategy and prioritized issues
prioritize issues to focus on, based on
their importance to the company and its • Understand maturity of current
stakeholders, as well as potential for management compared with desired
impact both positive and negative level of ambition
• Create Roadmap
• Establish goals and targets, identify key
activities and milestones, and determine
KPIs to measure success
• Design Governance
• Assign resources and responsibility
11
What are the key features of a good sustainability strategy?
A sustainability strategy should support the business vision. It goes beyond a set of goals and targets to
clearly articulate why sustainability matters and how the business will approach material topics. Though the
look and feel may differ from company to company, a well-designed sustainability strategy:
Is designed in the context
Is centered at the core of Is appropriately positioned
of current and emerging
business strategy and vis-a-vis peers and
societal challenges and
purpose competitors
expectations
Allocates and mobilizes Measures and
Ensures accountability
appropriate resources communicates performance
12
How can companies define and implement a sustainability strategy?
The basic components of any strategy project can be summarized across the three elements below.
1 Set Direction
2 Develop Strategy
3 Implement Strategy
• Understand Context • Design Strategy • Engage Stakeholders
• Develop understanding of current • State what it is the strategy should • Design internal and external
business strategy and management achieve, the overall vision and what the communications strategy, train internal
approach, relevant trends and possible main components of the strategy will be. stakeholders, and engage critical external
disruptors, the peer landscape, and stakeholders
relevant standards and frameworks • Position Strategy
• Execute Strategic Initiatives
• Prioritize • Assess competitive positioning and
ability to influence impacts related to • Develop supporting programs,
• Determine the scope of the strategy and prioritized issues partnerships, and advocacy efforts
prioritize issues to focus on, based on
their importance to the company and its • Understand maturity of current • Develop tracking tools and use them to
stakeholders, as well as potential for management compared with desired track and evaluate performance
impact both positive and negative level of ambition
• Periodically refresh/adjust strategy as
• Create Roadmap needed
• Establish goals and targets, identify key • Report Performance
activities and milestones, and determine
KPIs to measure success • Report on annual progress in line with
relevant external standards and
• Design Governance requirements
• Assign resources and responsibility
13
Lessons learned from over 30 years of building sustainability strategies
1. Insights, purpose and ambition matter
2. Strategy is derived from materiality
3. Begin with the end in mind
4. Benchmarking helps illustrate what might be possible, and identifies examples of
leadership
5. Partnership matters for effectiveness, efficiency and cost reduction
6. Take the time to listen internally
7. Clear governance is critical to success
14
What is a Sustainable Business?
Aron Cramer and Zachary Karabell, in their 2010 book
Sustainable Excellence, defined a sustainable Business
“A sustainable business is one that :
• delivers value for investors, customers and employees;
• improves the living standards of its employees and
the communities it touches;
• makes wise use of natural resources; and
• treats people fairly.
In many respects, a sustainable business is simply a well-run business.
Until quite recently, however, issues such as environmental impact, efficient use of resources, and human
rights were not core concerns of many companies. Today, companies achieve sustainable excellence when
they integrate consideration of society and the environment into their DNA.”
Aron Cramer and Zachary Karabell
15
The case of aviation
Aviation provides the only rapid worldwide transportation network, is indispensable for tourism and facilitates
world trade. • Air transport improves quality of life in countless ways. It is a major global employer and
contributor to global economic prosperity.
• Air transport moves around 4.5 billion passengers annually and 61 million tonnes of freight.
• The air transport industry generates a total of 87.7 million jobs globally.
• Air transport is necessary for transporting high value, time-sensitive goods: 35% of world trade by value
and less than 1% by volume.
• 58% of international tourists travel to their destination by air
• Aviation’s global economic impact is estimated at $3.5 trillion (including direct, indirect, induced and
tourism catalytic)
• If the aviation industry were a country, it would rank 17th in the world in terms of GDP
• Aviation is one of the few sectors in the world to have an industry and UN-backed goal of net-zero carbon
by 2050 (aviationbenefits.org/flynetzero/) and roadmaps in place to show how it can work.
• The global aviation industry produces around 2% of all human-induced carbon dioxide (CO2) emissions.
• A typical new generation single-aisle aircraft emits around 50 grams of CO2 per seat kilometre.
• This is equivalent to 2 liters of fuel burned per passenger for 100 km and comparable to the efficiency of
compact cars
Source : Air Transport Action Group (ATAG)
16
Thank You
Philippe Fonta
Director Industries, Transports and Logistics
BSR
[email protected]
17
