Today, more than ever, there is a need for organisations to re-think their approach to sustainability and a low carbon economy.
In light of this, BDO hosted a Community of Practice roundtable lunch, connecting a diverse group of professionals with a sustainability risk and governance focus. The lunch facilitated the collaboration of insights and discussed industry trends for an informed cross-industry approach to sustainability.
The dynamic conversation touched on a multitude of sustainability topics, with some of the key themes outlined below.
1. The importance of balanced conversations
When it comes to sustainability, organisations often have a tendency to run before they walk – forgetting to consider the transition period and the unintended consequences sustainability decisions can have on the operating environment of their business.
While setting targets and metrics is an important element to any sustainability strategy, organisations who clearly outline their end goals by assessing the holistic purposes of sustainability objectives are more likely to succeed in their sustainability endeavours.
2. Spotlighting the ‘S’ in ESG
The COVID-19 pandemic has given rise to a more socially conscious and socially aware global population. Previously the forgotten child of ESG, the ‘S’ or ‘Social’ element has now taken centre stage. People are more aware of how their actions are impacting their communities – on a local, national and global scale.
This has transcended to the organisational level with flexible working, mental health and inclusion and diversity becoming more at the forefront for operating strategies.
3. Running the risk of overregulation
There is the danger that in the current environment, organisations run the risk of over-regulation and over-reporting when it comes to sustainability. This means that core principles and reasoning behind the policies may be lost. Sustainability needs to be more than a box ticking exercise and it’s important that organisations consider the longer-term strategic view.
4. Reactive versus proactive sustainability
Taking a long-term sustainability view can begin by making the switch from being reactive to proactive. Many organisations are currently operating from a reactive sustainability standpoint, which often occurs either during financing / insurance renewals, a tender process, or increasingly after a crisis. Being reactive often leads itself to organisations having the required artefacts, but not necessarily embedding appropriate practices within their corporate culture – forgetting to consider ‘what happens if we don’t do this well?’
By being proactive and changing the word ‘risk’ to ‘opportunity’, organisations can change the narrative in regards to how they approach sustainability. This proactive sustainability mindset may also assist in influencing the impact from the ‘great resignation’ trend.
5. Meeting the expectations of younger generations
Organisations are becoming increasingly aware of Generation Z who are beginning to make their own purchase and buying decisions. This generation’s preferences and standards for proactive sustainability is becoming higher and higher. If organisations don’t meet these expectations, there is a risk of a change in consumer behaviours, as well as potential recruitment and retention risks as they won’t be an employer of choice.
Organisations are faced with significant opportunity to create value through a proactive approach to holistic sustainability. Developing and embedding effective risk and governance processes is at the forefront of ensuring this value is realised.
BDO look forward to future opportunities to discuss emerging sustainability trends and approaches with a broad range of industry professionals through this Community of Practice.