How can you capitalize on emerging sustainability trends?

Sustainability is not just a buzzword or a fad. It is a strategic imperative for businesses that want to thrive in the changing world. Customers, investors, regulators, and society at large are demanding more from companies in terms of environmental, social, and governance (ESG) performance. How can you capitalize on emerging sustainability trends and create value for your stakeholders? Here are some tips to help you develop a sustainability strategy that works for your business.

1 Assess your current situation

The first step is to understand where you stand in terms of sustainability. Conduct a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats related to ESG issues. For example, you may have a strong reputation for quality and innovation, but a weak carbon footprint or a high risk of human rights violations in your supply chain. You may also have opportunities to tap into new markets, improve efficiency, or enhance your brand image by addressing sustainability challenges. On the other hand, you may face threats from competitors, regulations, or social movements that could harm your business if you ignore sustainability.

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Surya Sharma

Associate Partner at McKinsey & Company | Top Voice 2024 | Leadership | Sustainability | Transformation
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I believe that The world is at an inflection point towards a sustainable economy and Sustainability is no longer optional for organizations due to growing pressure from all stakeholders whether it is regulators, investors or customers. This is once in a lifetime opportunity to catalyze the transformation of the economy. To capture this opportunity, organization needs to set a bold vision and make sustainability a top priority, define a holistic transformation architecture with clear roadmap, and mobilize the entire organization in the execution.

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Jason Cohen

Senior Manager @ Amazon | Product Management, Solution Architect | Cloud, AI, APIs | I help partners build AdTech products that scale revenue.
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Before doing this. Assess your commitment to the effort. Have you aligned an ESG effort to the health of the business? Does executive leadership have goals they are monitoring on a standard cadence? These are indicators if the commitment to ESG is real. If not, then get ESG expectations operationalized in leadership reporting and the business cadence.

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2 Define your vision and goals

The next step is to define your vision and goals for sustainability. What kind of impact do you want to have on the world? What are the benefits of being more sustainable for your business and your stakeholders? How will you measure and communicate your progress? You need to align your sustainability vision and goals with your overall business strategy and mission. You also need to make them SMART: specific, measurable, achievable, relevant, and time-bound. For example, you may want to reduce your greenhouse gas emissions by 50% by 2030, or increase your share of renewable energy by 25% by 2025.

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3 Identify and prioritize your actions

The third step is to identify and prioritize your actions to achieve your sustainability goals. You need to analyze the gaps between your current situation and your desired outcomes, and determine the most effective and feasible ways to close them. You may need to consider different aspects of sustainability, such as operations, products, services, customers, suppliers, employees, communities, and investors. You may also need to balance short-term and long-term actions, and assess the costs and benefits of each option. For example, you may decide to invest in energy-efficient equipment, switch to eco-friendly packaging, or partner with social enterprises.

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4 Implement and monitor your plan

The fourth step is to implement and monitor your plan to execute your sustainability actions. You need to assign roles and responsibilities, allocate resources, and set timelines and milestones for each action. You also need to establish a system to track and evaluate your performance, and report your results to your stakeholders. You may need to use different tools and indicators, such as carbon footprint, social impact, or ESG ratings. You may also need to adjust your plan as you learn from your experience and feedback. For example, you may find out that some actions are more effective than others, or that new trends or challenges emerge.

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Surya Sharma

Associate Partner at McKinsey & Company | Top Voice 2024 | Leadership | Sustainability | Transformation
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Implementing the sustainability actions require comprehensive action across 4 dimensions: 1. Integrate all the critical building blocks to a cohesive sustainability program 2. Set up sustainability/climate target operating model, governance and reporting 3. Design the data and technology infrastructure to support climate analytics 4. Build the capabilities and talent required to manage the transition

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5 Engage and collaborate with stakeholders

The fifth step is to engage and collaborate with stakeholders to enhance your sustainability impact and reputation. You need to identify and understand the needs and expectations of your stakeholders, such as customers, employees, suppliers, investors, regulators, and society at large. You also need to communicate and interact with them regularly, and solicit their input and feedback. You may need to use different channels and formats, such as surveys, interviews, workshops, newsletters, or social media. You may also need to collaborate with them on joint projects or initiatives that create shared value. For example, you may co-create solutions with your customers, or join a multi-stakeholder platform or network.

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Surya Sharma

Associate Partner at McKinsey & Company | Top Voice 2024 | Leadership | Sustainability | Transformation
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There is nothing called over-communication. Defining a clear communication agenda is critical as organizations want and need to intensify the dialogue with the supervisory board, investors, NGOs and the public. Organization should set out a very clear communication agenda. The communication strategy should align to the operationalization of the organization’s sustainability objectives under above to answer “what, how and by whom” to communicate.

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6 Learn and innovate for sustainability

The sixth step is to learn and innovate for sustainability. You need to foster a culture of learning and innovation in your organization, and encourage your employees to develop new skills and ideas for sustainability. You also need to scan the external environment and keep abreast of the latest trends and best practices in sustainability. You may need to conduct research, benchmarking, or experimentation to test new concepts or technologies. You may also need to embrace change and disruption, and seize new opportunities or challenges for sustainability. For example, you may adopt circular economy principles, or leverage digital transformation or social innovation for sustainability.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Kachollom Dalyop

Data Analyst | Business Analyst | Analyst | Energy Professional | Energy Analyst | Strategy Analyst | Research Analyst |
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One key factor is staying updated with industry trends. However, every business is distinct and requires specific or unique sustainability strategies to be incorporated in its business operations. A company's industry, size, resources, capabilities, and competences should all be taken into account while implementing sustainable plans. That is taking advantage of the existing resources and capabilities and incorporating sustainability strategies by tailoring it to the organisation's existing aims and values.

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Surya Sharma

Associate Partner at McKinsey & Company | Top Voice 2024 | Leadership | Sustainability | Transformation
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Sustainability has to be ingrained in the DNA of the organization, then only real transformation happens. We are seeing largest capital reallocation in the history, but to capture the opportunity, organizations need to commit and not do tick box exercise.

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How can you capitalize on emerging sustainability trends?

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1 Assess your current situation

2 Define your vision and goals

3 Identify and prioritize your actions

4 Implement and monitor your plan

5 Engage and collaborate with stakeholders

6 Learn and innovate for sustainability

7 Here’s what else to consider

Strategy

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How can you capitalize on emerging sustainability trends?

1

2

3

4

5

6

7

1 Assess your current situation

2 Define your vision and goals

3 Identify and prioritize your actions

4 Implement and monitor your plan

5 Engage and collaborate with stakeholders

6 Learn and innovate for sustainability

7 Here’s what else to consider

Strategy

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