In Short : Sustainability teams are at the forefront of shaping corporate strategies for a resilient future. By integrating eco-friendly practices, renewable energy adoption, and ethical supply chains, these teams create robust frameworks that ensure long-term viability. Their work not only mitigates environmental impact but also enhances brand reputation, fosters innovation, and meets the evolving demands of conscious consumers. As architects of sustainability, these teams play a pivotal role in steering businesses toward a greener and more sustainable tomorrow.
In Detail : Every business wants to predict where the world is headed: what consumers will want or need, what challenges communities will face, and where money will be made. But relying on financial and demand models and on trends that have existed for the last 100 years is no longer enough. The climate and society are changing rapidly; many of these trends no longer apply. Fortunately, within your organization, there’s a group that can give you a more accurate, data-driven read on the pace of change. Meet your Chief Sustainability Officer (CSO) and sustainability team.
Just as organizations historically sought out their market niche, each company possesses unique potential to advance sustainability practices. CSOs and sustainability teams play a vital role in identifying this niche and developing a strategy that is transformational, specific, accessible and desirable. By aligning your sustainability initiatives with the company’s strengths, your organization can achieve long-term success.
Going beyond ESG
Sustainability has been viewed as the Environment, Social, and Governance (ESG) umbrella. But this perspective often reduces sustainability to a checklist of risks without recognizing its potential as a core to revenue and your growth strategy. And I would argue that this massively discounts the value that CSOs and sustainability teams can bring to your organization.
Sustainability professionals are visionaries who can peel back the curtain and give insight into a future that will be radically different from the past. They can guide your company not only in ESG matters but also in building a well-defined strategy that embraces the huge economic, social and environmental changes on the horizon. The job of your CSO should be — and increasingly is — to help the company position itself to stay relevant and profitable in the face of these changes.
Embracing a transformational approach
Many organizations tend to adopt a cautious, incremental approach to sustainability, setting achievable goals without a comprehensive strategy. This is reflected in the fact that, while 90% of business executives acknowledge the importance of sustainability, only 60% of organizations have a sustainability strategy, and just 25% have a clear business case for their sustainability efforts.
As a result, many companies (40%) address sustainability sporadically or not at all, with 75% lacking a clear sustainability investment plan. Yet, those with well-defined sustainability strategies focusing on crucial issues can see profits rise to 50%.
So, for rapid decarbonization to happen, we must make transformational changes to the systems that created the need to decarbonize in the first place. Some American states have recently passed laws limiting the integration of ESG topics into investment decisions, but these laws are projected to cost taxpayers millions of dollars as a result of less competition for municipal bonds in those states1.
Despite these speed bumps, everyone else is running in the other direction: many other governments are pushing for resilient solutions, investors are looking for sustainable companies, young talent are seeking aligned values in their employers, and 81% of global consumers are expecting companies to contribute to environmental improvement.
The economics at play
Why shift your perspective on sustainability from risk management to growth? Consider the power sector as an example. The rise of renewables in Germany’s wholesale market has eroded the price peaks that fossil fuel generators relied on for profitability. As a result, assets worth more than 150 billion Euros have been written off in the last six years.
Established companies like Orsted anticipated these changes by crafting a sustainability strategy that prioritized future trends, shifting their focus beyond their traditional business. In just over a decade, Orsted went from being Europe’s most coal-intensive company to the world’s leading developer of offshore wind farms.
New companies like Sunrun built their business model around the growing residential rooftop solar sector, forming partnerships with electric vehicle manufacturers to create additional revenue streams in energy storage and virtual power plants.
Companies that position themselves well for future challenges can unlock significant opportunities. These include access to billions of dollars committed to sustainable initiatives through the US Inflation Reduction Act, along with trillions of dollars in investment prospects anticipated in the next 12 years to combat air pollution in China.
The need for specificity
It’s one thing for a company to aspire to transformational change, but it’s another thing for it to lay out the steps to implement this change. A specific strategy provides the entire organization with a clear idea of the company’s direction, the necessary steps to get there, and the players responsible for executing those actions.
Organizations like the Science Based Target initiative (SBTi) help companies translate climate science into industry-specific and organization-specific targets and plans. These well-defined strategies enable companies to align their actions with their values, prioritize the most impactful measures, manage resources efficiently, and transparently track and report progress. Additionally, they help companies manage risks related to greenwashing in a market that’s becoming more attuned to the realities of decarbonization and sustainability.
Making a sustainability strategy accessible
An effective sustainability strategy must get all levels of the organization involved, it can’t be a topic solely discussed by leaders. Equipping people with time and tools to shift their way of working is key.
At Arcadis, a vital aspect of this goal was ensuring all 36,000+ of our people across more than 40 countries shared a language with which to discuss sustainability. We tackled this challenge by launching Sustain Abilities, our internal sustainability training program which equips our people with the knowledge and skills needed to engage in sustainability conversations and deliver sustainable outcomes for our clients.
Building the movement
Changing the way we do things can be tough. That’s why sustainability strategies must not only drive transformation but also be desirable enough for people to embrace them willingly.
Renewable energy is a prime example. Technological advancements, falling prices and government incentives have propelled the shift toward clean energy, surpassing predictions even by key organizations like the International Energy Agency. American states that previously resisted renewables have begun to embrace them, with two-thirds of new investments in clean energy taking place in Republican-controlled states.
Companies like Patagonia have also built their organizational strategy around their core values. In doing so, they’ve attracted a passionate workforce and maintained an exceptionally low employee turnover rate. These examples highlight the power of a desirable strategy in uniting entire organizations toward their goals.
Priming for the long haul
In the coming years, companies will face significant challenges as they navigate the environmental changes resulting from climate change and its impact on employees, customers and supply chains. Obstacles like regulatory uncertainty, a lack of clear data, limited resources, and resistance to change lie ahead. But by crafting sustainability strategies that are transformational, specific, accessible and desirable, CSOs and sustainability teams can empower organizations to turn these obstacles into new avenues for growth.