Thinking sustainability strategically: Insights into the work of the German Sustainability Award jury

Michael Jenkner, Toni Koç, Franziska Kramer and Matthias Damert are managing directors at plant values long-standing experts in strategic sustainability consulting. They also contribute their experience in their role as jurors at the German Sustainability Award (DNP) in various sectors - Germany's most important award for ecological and social commitment.

Share in the interview Micha and Toni The jury members share their experiences from the jury's work and provide valuable insights into the evaluation of sustainability strategies. What makes a company a pioneer? What typical weaknesses do they see time and again? And what should companies look out for if they want to enter the DNP?

"A strategy without goals is nothing more than a wish list"

1. what role does a clear formulated sustainability strategy when assessing companies for the German Sustainability Award? Which factors or contents in a sustainability strategy are particularly decisive for you as a jury to assess a company as forward-looking?

Toni Koç:
It really depends on the company. Smaller companies in particular do not necessarily need a sustainability strategy in the traditional sense with thematic structural levels, descriptions and target hierarchies. What is important are clearly recognisable long-term sustainability goals. Many companies like to list in detail what they have done and achieved in recent years. This is of course important, especially to inspire others. However, they then "forget" to communicate their plans.

As we have not yet reached the end of the sustainability ladder, it is important to show that we are aware of the outstanding challenges and how we intend to get there. This means that it must be recognisable that the important challenges, i.e. the key sustainability issues, are being tackled.

A university that ambitiously focuses on operational topics, e.g. climate neutrality and a biodiverse and socially inclusive campus, but does not address how sustainability can be strengthened in the curricula and research topics, is neglecting sustainability in its "core business". Ambitious goals must then be set based on the key topics. In most cases, simply setting a target such as "We will be climate neutral in Scope 1 and 2 by 2045" will not be enough to be recognised as a pioneer in the DNP.

Michael Jenkner:
In general, I can say that any clearly structured sustainability strategy published by the companies - usually in sustainability reports - helps immensely with the assessment. Especially if general reporting standards have been adhered to (e.g. GRI or DNK), as this greatly simplifies the orientation for the jury members. Decisive factors for assessing a particular pioneering role are very sector-specific. For example, clear objectives and measures in connection with the water resource cycle played an important role for drinking water and wastewater companies (such as sponge city concepts, grey water use, etc.). In contrast, asset and investment companies focus more on targets and measures in the context of genuine impact investing and a transparent GHG assessment of the portfolio.

Companies that have revised their climate targets in recent years to the point of removing them completely from public communication or companies that use capital or other resources to support internationally outlawed practices, such as the production and trade in cluster bombs, cannot be pioneers. To summarise, I can say that clearly comprehensible targets that leave little room for interpretation and with which a company also makes itself publicly measurable are definitely an advantage.

From strategy to implementation - but measurable, please

2. how important is the link between Strategy and implementation - So not only setting goals, but also making them measurable and verifiable, and how well can this be evaluated?

Toni Koç:
I think this point is essential for the effectiveness of a strategy, regardless of the DNP. To be honest, many strategy processes take place in such a way that long processes, sometimes heated discussions and a lot of wrangling over words end up with very qualitative statements that everyone involved can support because they are so generic. What is often missing is the step of resolutely deriving measurable goals from them. Only then, however, can the organisation really get to grips with them and, for example, allocate resources (both human and financial) between the various organisational goals. And only then do those responsible have an orientation as to what they should be working towards.

A qualitative strategy with general statements such as "We are committed to reducing the ecological footprint of our products" indicates to me the risk that no ambitious steps can be implemented. Furthermore, for me, implementation is more than measurable goals, but also the preparation for a change process. If, for example, I see an ambitious goal such as "switching 3 product lines to environmentally positive products" and at the same time a training programme on the environmental impact of products is created for employees in product development, marketing and procurement, then I know that someone is creating the right framework conditions.

Michael Jenkner:
A strategy without clear measures to achieve its objectives is little more than a "wish list". Goals should be formulated in a way that is as clearly measurable as possible and comparable over time, but it should also be noted that goals have other applications that make a "flowery" formulation necessary. Sustainability goals should motivate internal stakeholders and get everyone on board. They should inspire and turn sustainable development into a shared desire, a shared ambition. The achievement or progress of objectives can only be evaluated really well if companies have already been providing standardised information continuously for several years, for example with sustainability reports.

Transparency in the supply chain remains a weak point

3. what typical weaknesses or gaps in sustainability strategies do you regularly encounter as jury members?

Michael Jenkner:
A frequent gap is the consideration of the entire upstream and downstream value chain. It becomes clear time and again in the statements of many companies that there are still many unknown factors in the value chain and that a targeted strategy is therefore often not possible. However, many nominees show that great efforts are currently being made to gain more clarity about the key sustainability issues in the value chain with the help of certifications and AI-supported systems. Some nominated companies have also explicitly pointed out that the gradual introduction of product passports as part of the implementation of the Ecodesign for Sustainable Products Regulation (ESPR) is seen as a possible beacon of hope for greater transparency. Ultimately, efforts to achieve greater transparency in the value chains are the necessary preliminary stage for setting clear targets and measures and thus further closing the gaps in sustainability strategies.

Courage counts - but so do results

4. how do you rate companies that have ambitious strategies but are still in the early stages of implementation compared to companies that have been implementing them for longer?

Toni Koç:
As the Sustainability Award is about the pioneers and others should be able to use them as role models, I rate those with motivating goals and measures better. In the sustainability community in particular, this creates the basis for me as another company to exchange ideas with this pioneer and learn how the challenges I am facing have been overcome. I think something like that creates a big impact. It looks a little different when a company is in the process of taking a very bold big step and, for example, detoxifies its entire product range at some risk (similar to FRoSTA back then). I would like to appreciate such courage even without "proof of success", because we simply need courage in our current times.

Michael Jenkner:
I fully agree with Toni.

Innovation is not a bonus, but a condition

5. what importance do you attach to the topic of innovation in the context of sustainability strategies - e.g. new business models or product ideas?

Toni Koç:
In my experience, this is often essential. In most cases, we will not achieve our sustainability goals by simply painting our existing products and business models a little greener. This is either not enough to improve resource consumption and social impact by the necessary amount. Or it will mean that it is not economically attractive for companies in the long term. In order to achieve this, we must intensively rethink value creation, product utilisation and customer added value. The will, the creativity and also the skills are often lacking. However, if these things come together, then really successful changes can be initiated.

Michael Jenkner:
Innovative thinking and action is ultimately the key to achieving the transformation towards a sustainable value chain. In order to be able to evaluate this in the DNP, companies must consciously emphasise lighthouse projects or large-scale transformation projects in their profiles or sustainability reports.

Credibility beats glossy communication

6. what role does credibility and consistency play between Communication, Report and actual action in the evaluation and how can this be determined?

Toni Koç:
That is absolutely essential. I would like to highlight one example: We have seen this year in the DNP juries that companies in various sectors have postponed their climate neutrality targets by 5-10 years in some cases. This is serious both in terms of impact and credibility. Of course, there are always good reasons for this, but when targets are changed so drastically from one year to the next, it shows that the company cannot be relied upon to work persistently and ambitiously towards sustainability. Unfortunately, this has so far been quite time-consuming to find out (without machine-readable reports), but it is worth the effort. At this point, a big thank you to the team at Leuphana University!

Michael Jenkner:
Credible action and self-critical reporting are the key points. For me, this can be seen in many cases in how the failure to achieve targets and controversial decisions are dealt with. For me, companies that report transparently, critically assess the circumstances and draw conclusions have a clear advantage. In this day and age, no company should be under the illusion that such points are not included in the evaluation processes simply because the points are not entered in their own DNP profile. Every member of the jury can quickly gain a good overview with simple prompts in AI research models and incorporate the findings into the assessment after validation.

Recommendations for DNP applicants

7. what recommendation would you give to companies that want to enter the DNP - what should they pay particular attention to (in their sustainability strategy)?

Toni Koç:
My recommendation is actually to work systematically, ambitiously and also a little courageously on sustainability, regardless of the DNP. Understand where the impacts and opportunities are, work out innovative solutions there and then set off with perseverance and motivation. Pioneers are created through authentic will, sustainability and business skills and, of course, a good dose of luck. Anyone who takes this approach is doing everything right. Well, and then that has to be clearly communicated so that we as jurors know about it and understand it.

Michael Jenkner:
Exactly, the sustainability strategy should not be designed with the DNP in mind. The DNP recognises a company's own sustainable development, with the focus on highlighting companies that can serve as pioneers for other industry players. A good strategy is characterised by the fact that it not only addresses the "nice" and socially desirable topics, but also those with more inconspicuous but significant effects (e.g. on affected communities along the value chain or topics relating to data ethics or tax morality) and also addresses the sustainability risks.

A strategy often has to pursue contradictory goals at first glance, for example when a water supplier sets itself a 1.5-degree climate protection strategy and at the same time draws up a climate adaptation strategy for a 4.0-degree world. In my view, it is important not to see any strategy as a rigid document, comparable to a socialist 5-year plan, but to see a sustainability strategy as a flexible instrument. A strategy should contain clear ambitions and the results it aims to achieve, but also offer enough room for new approaches. A good strategy is therefore usually associated with organisational development measures. It is important for the DNP process that all of this is communicated transparently and comprehensibly, and it makes sense to have formulated a sustainability report in accordance with one of the recognised standards.

Conclusion: sustainability requires strategy, courage and honesty

Sustainability is not just lip service. Companies that want to win the German Sustainability Award must combine strategy, implementation, credibility and innovative strength. The jury pays close attention to measurable goals, credible communication and transformative approaches. Above all, however, what counts: The courage to change and the ability to turn this into a shared ambition within the company.

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