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Creating a Sustainability Centric Organisation 

As more and more organisations declare their ambition and commitment to sustainability, we consider the drivers behind this seismic shift in attitude and some of the key enablers to success.

What is driving sustainability momentum in the market?

Stakeholder awareness, internally from employees, externally by customers and clients but also society at large means that an organisation’s brand is at stake. Those organisations that are more sustainable tend to attract, retain and engage their employees more effectively and foster greater innovation.

Investor sentiment has demonstrated that those organisations that have sustainability at their core, embedded in their values and purpose tend to perform better than their peers and avail of a lower cost of and better access to capital. This is a trend that is likely to increase.

The risk landscape has changed. This is not simply a risk to physical assets from climate change. We are facing enhanced societal and economic risk, giving rise to greater emphasis on the social and governance elements of ESG. Reputational risk is also a core component of sustainability as organisations that rely on public opinion for investment, custom and talent, want to be seen to do the right thing.

Regulation is acting as an accelerator. There have been over 400 regulatory and policy changes since 2015 related to sustainability and climate change. The financial sector in particular is grappling with a wave of new regulation designed to prescribe the management of ESG risks and to promote sustainable finance. In the corporate world, European Union Corporate Sustainability Reporting Directive (CSRD) will impact up to 60, 000 firms and will require enhanced reporting which must be independently assured.


How are firms responding to these demands?

All sectors of industry are being impacted by the demand for more sustainable practices, and most firms have embarked on a journey to transform their business model to one which will both withstand the risks its faces, and also have a meaningful impact on the climate and society. These are the goals – to build a sustainable business, and to support society and local communities to thrive and ultimately to prevent causing further damage to the climate and the sustainability of the planet. Each of these goals can be achieved in isolation, but only when they are combined into one strategy will we see a meaningful impact.

In practice for firms, this means setting a strategy and tone from the top, implementing a robust governance framework, revising the product offering, enhancing risk management capabilities, educating the workforce and making responsible decisions in all aspects of its operations. Over time, these activities will lead to a culture of sustainability within those firms.


Collaboration is key

Already, leading firms are pushing ahead with sustainability driving initiatives, building capabilities and teams, seeking expert support, and preparing to meet regulatory requirements. It is imperative that firms look inwards initially to get their own house in order, but the true impact of these efforts will not be realised until organisations collaborate. Governments and public sector agencies will need to collaborate with the private sector, firms within a sector, such as banking, will need to collaborate with each other, all sectors will need to collaborate with academics, climate scientists, innovators and technologists to really make a long lasting impact. No one firm can turn the dial on climate and societal change by themselves. They can lead by example, but they must bring others on the journey with them. That is the only way that this will work.

 

If you would like to discuss further, please contact
Laura Wadding, Sustainability Lead Partner, Deloitte Ireland
Marc Aboud, Sustainability Director, Deloitte Ireland

 

This article first appeared in the B&F Digital Sustainability Supplement on 30 September 2021. 

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