To build the sustainable world of 2050, it is time to act. The transition requires vision and coherence. A column by Isaline Desclée, sustainability and strategy consultant at Winch Projects.
The challenges of combining social responsibility and financial profit are complex for our corporate decision-makers, as are the short-term versus long-term dilemmas. As a result, they are often at a loss as to what approach to take to set their company on a more sustainable path. It is however the duty of the board of directors (BOD) to get involved. Time is running out.
A question of roles and responsibilities
The fundamental role of the board is to ensure the sustainability of the company. However, at the moment, this sustainability is endangered by the decay of the social and environmental systems to which the companies belong. Guided by their board and management, companies must redefine their role towards these ecosystems, creating value for all and destroying none.
Strategy is also part of the Board of Directors' competencies. Traditionally, it is "prepared by management and validated by the Board." How, in 2021, can we validate a strategy that does not integrate the risks and opportunities presented by the challenges of sustainability into its finest meshes?
All the fundamental themes that are found in the Board of Directors involve decision-making in sustainable matters: audit and investment choices, risks and associated mitigations, human resources management, compliance with legislation, etc.
The sustainability issue is so complex that it can be daunting to tackle. However, like digitalization, it is an emerging skill for which the right questions must be anticipated and asked of management.
A structured method to engage the company
While many directors take the above observations for granted, there is often a severe lack of know-how about how the company should go about it. This is not surprising, since the first decision support tools for sustainable strategy are recent.
Six steps should be taken into account, to be synchronized and iterated over and over again:
1. Continuous training. The entire board should develop a sustainable competency specific to the region, sector, business model and culture of the company to understand its issues. This is an in-depth approach associated with materiality analysis: in the company's ecosystem, what is significant for whom, in the present and in the future?
2. Situate the company in relation to its commitment and current practices. This is the sustainability analysis, some tools of which are available on the Internet such as the BCorp Impact Assessment, which delivers a free sustainability report card based on 200 questions.
3. On this basis, it will be necessary to define the company's sustainable ambition. This should go beyond simple green planning, which would typically be limited to investing in a new boiler and complacently waiting for a reduction in energy consumption. This would only lead the company to a fraction of the 55% reduction in greenhouse gas emissions expected for 2030.
On the contrary, adopting a holistic and strategic sustainable ambition will provide the company with the value-creating elements that will differentiate it in tomorrow's markets.
4. For an effective implementation, the ambition will have to be broken down into concrete objectives, prioritized and framed by precise deadlines according to the principle of retroplanning. The global approach will be reinforced by concentrating initial efforts on actions that will have a strong and/or rapid impact and return on investment. This is what English speakers like to call low-hanging fruit and quick wins.
5. Change and its collateral effects require follow-up and rigor. Only factual results can be trusted, so systematic measurements, performance indicators and qualitative and coherent monitoring tools are needed.
6. Finally, communicate. This is essential internally to ensure the involvement of employees. To the outside world, it helps stakeholders to engage. Without a doubt, the authenticity of the tone will pay off more than watered-down speeches that could lead the company to accusations of greenwashing.
It's time to get down to business
Governments, finance, companies: each of these pillars of our economy is moving to build the sustainable world of 2050. As far as companies are concerned, the urgency and scale of the necessary transition require vision, guidance and consistency. These are all assets that are in the hands of our boards of directors. Directors, the momentum is now.
Written by : Isaline Desclée
Link to the article in "La Libre Belgique" : https://www.lalibre.be/economie/decideurs-chroniqueurs/2021/06/29/durabilite-conseils-dadministration-engagez-vous-en-six-etapes-D3A5THIECVGDTN6QMM6L5HR4ZY/