Develop a sustainability strategy within the company

As a company, it is worthwhile Sustainability strategy that is truly well-founded and authentic. We therefore show you the steps you need to take to do just that.

You can find the complete overview in our Comprehensive guide to sustainability strategy in the company.

Many companies have recognised how important Sustainability for them. This is why they often take individual sustainability measures. However, in order to have a truly positive impact on the environment and society on the one hand and to be authentic on the other, it takes more than individual measures. A sustainability strategy helps companies to take a focussed approach to sustainability, anchor it in the long term and communicate it even more clearly.

If your company wants to go beyond a strategy and initiate a permanent process, we describe in the Article on sustainability transformation in detail the 3 dimensions of transformation and the 4 phases.

Content of the article

• Use the available information
• Sustainability vision and mission
• Set focus
• Create consistency
• Determine the intensity of sustainability
• Formulate goals
• Anchoring sustainability
• Developing sustainability measures
• Consider the implementation structure
• The appropriate form for the sustainability strategy
• Conclusion

Use the available information

The base of every strategy is a sound basis. However, this basis is perhaps even more important for sustainability strategies in companies. This is because sustainability is a complex topic, especially for companies, and it often requires the consideration of very different interests.

By analysing the status quo, we highlight different perspectives on sustainability. We therefore distinguish between three perspectives for a solid foundation:

1. A company's interest in sustainability
2. The responsibility that the company has towards people and nature
3. The potential for sustainability that already exists within the company

Specifically, this basis for the development of the sustainability strategy can include the following points, for example:

• Analysis of existing sustainability activities
• Survey on motivation for sustainability in the company
• Materiality analysis to determine impacts on the environment and society and vice versa
• Analysing regulatory changes with regard to sustainability
• Consideration of the competition and changing customer requirements
• Screening the corporate strategy for links to sustainability
• Investigation of technological changes in favour of sustainability

In our contribution Sustainability strategy in companies - analysing the status quo we go into detail about what information should be obtained and how this can be done.

Sustainability vision and mission

Most companies know it from their brand development formulate a vision and a mission. There, this is seen as a powerful tool for developing a strong brand and strategy. We have therefore started to use this tool in the development of a sustainability strategy within the company and can fully recommend it.

In this respect, the following questions help to develop the vision and mission:

• Vision: "What does a future sustainable world look like for you? What does your industry / topic in particular look like?"
• Mission: "How can you contribute to making this sustainable future a reality?"

The sustainability vision and mission therefore form the core of a sustainability mission statement. Such a mission statement is similar to the mission statements that are created in strategic brand development. The sustainability mission statement is rounded off accordingly by the company's values and now often (not clearly defined) the "purpose". Many companies then summarise these points in a sustainability policy.

Set focus

For many companies, sustainability is like an overflowing bouquet of flowers and they don't know which flowers to choose and why. It is extremely important to be able to select the relevant sustainability topics. This is the only way to ensure that the sustainability strategy does not become an insurmountable mammoth task. It also helps to work on those topics that have a real impact on sustainability.

To achieve this, it is important to understand sustainability for your own company and your own business model. For manufacturing companies, completely different sustainability issues are crucial than they are for IT companies. For the former, water consumption and labour safety in the supply chain may play a role, whereas for the latter, the electricity consumption of servers and living wages for service providers are important.

The most common tool for determining the relevant topics is the materiality analysis. We have previously used the following as examples A materiality analysis at Stadtwerke Norderstedt described in detail.

The following questions help with the final selection of the "essential" topics:

• In terms of which issues do I have the most serious impact on the environment and society?
• Which topics can I generate the most positive impact on?
• Which topics motivate employees?
• For which ones is an economic advantage possible?
• Which topics are currently the most discussed in society?
• Which topics are becoming necessary for us in regulatory terms?
• Etc. pp.

Companies typically select between 3 and 10 topics. We call these topics fields of action for sustainability. We often structure these fields of action further into focus topics. However, these fields of action can be located at very different levels of detail and can be more concrete or more abstract. Examples of areas of action can be found in our article Sustainability strategy examples in companies.

Creating consistency (developing the breadth of the sustainability strategy within the company)

Once the company has selected fields of action for sustainability, it is now a matter of being able to work on them consistently. Developing a sustainability strategy in the company should be a holistic endeavour if it is to be effective. Only if the relevant areas or departments pursue the sustainability issues will the sustainability strategy achieve the necessary impact.

Many companies define areas in which the fields of action are to be implemented. The areas should be

• On the one hand, to reflect the structure and working methods in the company.
• On the other hand, to map the most important areas of influence on sustainability issues.

Examples of areas for manufacturing companies could be the following:

• Production (in our own plants)
• Supply chain and purchasing
• Product development and
• Sales and marketing
• Employees and corporate culture
• Society and Corporate Citizenship

Determine the intensity of sustainability (develop the depth of the sustainability strategy in the company)

When developing a sustainability strategy, perhaps more than with other strategies, companies need to ask themselves the question: "How far do we want to go?". No company can yet describe itself as 100% sustainable because the situation and the system do not yet allow it. The ideal level of sustainability should be carefully weighed up.

Our Comprehensive guide to sustainability strategy in the company shows many related topics. These can help when deciding on the depth.

If the sustainability strategy developed is not ambitious enough, the topic will not be anchored and may even be criticised from the outside. Greenwashing are criticised. If the sustainability targets are set too high, they are likely to fail due to economic efficiency issues and, if they are not met, will reduce employee motivation.

"For most companies, however, it can be said that more ambitious targets should be set rather than targets that are too weak. Only then can sustainability gain momentum."

The example of climate protection often illustrates well how different intensity or ambitions can be.

Three differently ambitious target formulations would be, for example:

• The company wants to reduce its CO2 emissions by 30%. In return, processes will probably remain unchanged and efficiency measures will be implemented.
• The company wants to become CO2-neutral. To this end, processes are certainly being rethought, the core business is being scrutinised for climate protection and many departments are being involved.
• The company wants to become CO2-positive. The entire company and business model will be scrutinised for climate protection, all employees must be part of it, incentive and control elements for climate protection will certainly be built in and communication will be able to make it a core topic.

The decision as to how intensively sustainability should be implemented is absolutely dependent on the company and all surrounding sustainability factors. In this respect, the following questions help to clarify the intensity of the sustainability strategy:

• How great is my damage to the environment and society and how quickly should we take decisive steps forward?
• What resources are available to implement which topics?
• How will employees react to a very ambitious sustainability strategy and how will they react to a less ambitious one?
• How will customers and the public react to a very ambitious sustainability strategy and how will they react to a less ambitious one?
• Is there perhaps currently social momentum to promote sustainability?
• And many more.

Formulate goals

Once we have determined how deeply sustainability should be implemented, we can now set sustainability targets. These are no different from other objectives in the company.

However, experience shows that many companies do not set themselves very tangible sustainability goals. The CEO of VAUDE, Antje von Dewitz, said in an interview with us:

"It is important to recognise that sustainability is a professional business competence."

Antje von Dewitz, VAUDE

Accordingly, sustainability targets must be just as accurate as all other targets in the company. A simple tool is also to set sustainability targets according to the SMART principle to be drawn up. This ensures that the goals are realisable and measurable. This is precisely what many sustainability goals lack.

Another important point is that the goals of the company's sustainability strategy should not be detached from other goals. Otherwise, conflicts of objectives may even arise.

Once targets have been set for the entire company, these are transferred to the divisions or departments and suitable targets are identified. Depending on the type of sustainability strategy, this can also take place after measures have been identified.

We think it is important to understand that the development of sustainability targets and sustainability measures are closely linked. For some goals, a top-down approach will be necessary, in which the management sets goals and then measures must be found to fulfil them. For many goals, however, we find it essential to involve the departments. They will develop the goals themselves and automatically think of measures that show whether a goal can be achieved. The second approach is much more participative and is usually recommended.

Anchoring sustainability

In order to develop the company's sustainability strategy in such a way that it lasts, consideration must be given to how sustainability is anchored. This is highly dependent on the company structure and the status of sustainability performance. Possible instruments and structures for anchoring sustainability are, for example

• One CSR- or sustainability officer or a sustainability working group
• A dedicated CSR or sustainability department
• Definition of responsibility in the Executive Board or management
• Establishing a sustainability council or a separate position on the advisory board
• Obligation to publish an annual sustainability report
• Technical and methodological training of organisational members in sustainable management
• Linking bonuses and other incentives to climate targets
• Control elements such as internal CO2 tax (see Microsoft's concept)
• Strong communication of sustainability goals and thus the development of a public and internal commitment
• Self-commitment via "pledges" and mergers of companies

Develop sustainability measures for the company's sustainability strategy

Once the goals of the sustainability strategy are clear, measures are needed to achieve them. To do this, it is helpful to have already set the goals at various levels. Both company-wide measures and specific measures for departments can then be devised.

On the one hand, as many different employees as possible should be involved in finding the measures in order to gather their expertise. On the other hand, it is enormously helpful to work with other companies, experts and all other stakeholders. Stakeholders to work together. This allows various options to be devised as to how the objectives can be achieved.

Furthermore, consideration should be given to the time frame in which the ideas for measures should be developed. For special topics Intensive workshop formats deliver excellent results. For other topics, a month's time should be allowed. And for still other topics, solutions may only be found once other measures have been started and the findings from them provide new ideas.

However, developing a sustainability strategy in companies is not a standardised process. The field is less than 20 years old and is uncharted territory for almost all companies. This is why quality is all the more important and unusual:

"We have to learn to sit with the problems of sustainability. If we are aware of our responsibility, it will hurt not to have a solution to the problem. But if it hurts long enough, we will have taken the problem into enough mental contexts. And we will eventually find a solution in one of these contexts."

We cannot expect to quickly find simple answers to such complex sustainability issues. However, with patience and conviction, the right approach and tools, we will be able to find solutions and measures.

Putting together packages of measures

Once sustainability measures have been identified and the most promising ones have been selected, it may help to summarise them in packages of measures. The development of a sustainability strategy for large companies in particular becomes much more effective if the many measures are bundled together.

This can be done by bundling measures by department or topic and distributing responsibilities. Another option is to summarise measures in larger initiatives that run through the entire company. This creates a framework and links various measures. They are then seen as a joint effort. This allows the employees implementing the measures to identify more strongly with them.

Consider the implementation structure

One point that is often neglected in strategy development is the question of how the strategy is to be implemented later on. It is extremely important to consider how the company is structured.

• Do decisions take place top-down or are bottom-up processes favoured?
• What other strategies does the developed sustainability strategy interfere with and how can they be dovetailed?
• Which people are motivated and can be recruited as "ambassadors" or even "sustainable change agents"?
• Who will accompany the implementation and provide support in the event of uncertainties or conflicting objectives?

Develop a sustainability strategy for the company's departments

If this has not yet been done in the previous process, the sustainability strategy should now also be developed for the company's departments at the end. The following questions should be considered:

• What "sustainability mandate" does the department have to contribute to the sustainability strategy that has been developed?
• What goals can be derived for the department?
• What measures can the department take to contribute to the overarching measures?
• How do we anchor the topic of sustainability in this department?

Bringing the developed sustainability strategy into the appropriate form

At the end of every strategy process, it is important to find a form that conveys the content. Such a form should help to make the sustainability strategy more realisable, easier to understand later, transferable or also serve as a controlling instrument.

Ideally, the form of the sustainability strategy that the company has developed fits in with other forms of strategy. Possible forms and implementations include the following:

• A classic strategy paper.
• A systematic management system that is ideally integrated into the existing system.
• For smaller companies, perhaps a more comprehensive background paper and additional pragmatic papers for the work areas.
• The Linking with suitable report formats like the GRI or the DNKto enable a coherent flow of management and reporting.
• The modern form of a Sustainability Handbookssimilar to the well-known brand handbooks. In this way, the background and implementation of the sustainability strategy can be conveyed in an understandable form.

Conclusion: Developing a sustainability strategy within a company is a feasible but highly individualised process

However, there are aids, tools and comparable positive examples for each step, so that a suitable and individualised sustainable corporate development can be taken in each case.

The preceding steps in the development of a sustainability strategy are nothing unusual for companies. The special features of developing a sustainability strategy are the complexity, the large number of interests to be taken into account and the need to ensure authenticity.

All of the above points provide guidance for developing a sustainability strategy. Some points are particularly helpful in successfully implementing the process:

• an intensive and comprehensive understanding of sustainability in order to be authentically effective,
• a good feel for the company, the culture and the employees in order to select topics and measures that are implemented with motivation,
• Experience with the sustainability market and public opinion in order to implement sustainability in an entrepreneurially valuable way.

The development of a well-founded sustainability strategy is the basis for making sustainability a permanent feature and for achieving long-term success in terms of sustainable corporate development.