Original content provided by BDO Belgium.
BDO Belgium and Mercuri Urval recently surveyed 150 companies from diverse sectors about the most relevant success factors when transitioning to a sustainable business model. These are:
Embed sustainability into the business strategy
Embedding sustainability into the business strategy is the most critical factor for a successful transition. This result is not surprising, as sustainability must be an integral part of a company's overall strategy and decision-making process. Businesses that successfully integrate ESG initiatives into their business strategy are better equipped to identify and manage risks, seize growth opportunities and create long-term value for all stakeholders.
By incorporating sustainability into their strategic planning, companies can align their business objectives with the broader social and environmental goals of society. This approach allows companies to anticipate and address emerging trends and challenges in a proactive and strategic manner, rather than reacting to external pressures.
Read more from BDO Belgium:
Leadership commitment
The survey results also reveal the critical role that leaders play in driving sustainability initiatives and fostering a culture that integrates sustainability within an organisation.
Recent legislative developments, such as the Corporate Sustainability Reporting Directive (CSRD), have expanded the Board's role to address issues related to climate change, human rights due diligence, appropriate political engagement and workplace diversity, equity and inclusion.
To effectively address these challenges, directors and executive leaders must take the lead in driving the sustainability journey. They play a crucial role in shaping how companies anticipate and respond to evolving sustainability challenges, and their decisions and influence are vital in integrating sustainability into all aspects of the business.
Ultimately, leaders who demonstrate a commitment to sustainability can provide the necessary vision, direction and resources to ensure that sustainability is integrated into all aspects of the business. Equally, they can inspire and motivate employees to embrace sustainability and make it a core part of their daily work.
How can you approach this? What should you consider?
Employee engagement and empowerment
The survey found that employee engagement and empowerment is the third most relevant factor when making the transition to a more sustainable business. This result underscores the importance of involving employees in sustainability initiatives and empowering them to contribute to the company's sustainability efforts. Engaging employees in sustainability initiatives allows organisations to tap into their creativity, knowledge and expertise to develop innovative solutions and drive continuous improvement.
Companies that demonstrate commitment to sustainability are more likely to attract and retain employees who are passionate about sustainability and who want to make a positive impact on the world.
How can you approach this? What should you consider?
"Awareness is at the heart of any successful sustainability transition. Employees are the catalysts of this change and their engagement is critical in integrating sustainability into the company's culture. Employees who feel they are part of a company that values sustainability are more likely to be engaged, committed and passionate about their work."
KAREN BAUM, Managing Principal Sustainability & ESG Services, BDO USA
Contact your local firm’s ESG advisers today to learn how BDO can help your company transition to sustainable business practices and meet the growing demands of stakeholders. The key to success lies in a combination of top-down and bottom-up approaches, where Board commitment and employee engagement come together to drive meaningful change.
BDO Belgium and Mercuri Urval recently surveyed 150 companies from diverse sectors about the most relevant success factors when transitioning to a sustainable business model. These are:
- Embed sustainability into the business strategy: most relevant factor for 26% of respondents
- Leadership commitment: most relevant factor for 18% of respondents
- Employee engagement and empowerment: most relevant factor for 18% of respondents.
Embed sustainability into the business strategy
Embedding sustainability into the business strategy is the most critical factor for a successful transition. This result is not surprising, as sustainability must be an integral part of a company's overall strategy and decision-making process. Businesses that successfully integrate ESG initiatives into their business strategy are better equipped to identify and manage risks, seize growth opportunities and create long-term value for all stakeholders.
By incorporating sustainability into their strategic planning, companies can align their business objectives with the broader social and environmental goals of society. This approach allows companies to anticipate and address emerging trends and challenges in a proactive and strategic manner, rather than reacting to external pressures.
Read more from BDO Belgium:
- Corporate Sustainability: From compliance to value creation
- Is sustainability just a buzzword or is it here to stay?
Leadership commitment
The survey results also reveal the critical role that leaders play in driving sustainability initiatives and fostering a culture that integrates sustainability within an organisation.
Recent legislative developments, such as the Corporate Sustainability Reporting Directive (CSRD), have expanded the Board's role to address issues related to climate change, human rights due diligence, appropriate political engagement and workplace diversity, equity and inclusion.
To effectively address these challenges, directors and executive leaders must take the lead in driving the sustainability journey. They play a crucial role in shaping how companies anticipate and respond to evolving sustainability challenges, and their decisions and influence are vital in integrating sustainability into all aspects of the business.
Ultimately, leaders who demonstrate a commitment to sustainability can provide the necessary vision, direction and resources to ensure that sustainability is integrated into all aspects of the business. Equally, they can inspire and motivate employees to embrace sustainability and make it a core part of their daily work.
How can you approach this? What should you consider?
- Upskill your Board members on sustainability to allow them to fully understand and set ambitious ESG targets
- Appoint a Sustainability Sponsor within the Board to advance the sustainability agenda, taking ESG into account in the overall decision-making process
- Work towards a diverse and representative Board composition, as diverse leadership with different perspectives is proven to be more innovative, manages risks better and leads to financial outperformance.
Employee engagement and empowerment
The survey found that employee engagement and empowerment is the third most relevant factor when making the transition to a more sustainable business. This result underscores the importance of involving employees in sustainability initiatives and empowering them to contribute to the company's sustainability efforts. Engaging employees in sustainability initiatives allows organisations to tap into their creativity, knowledge and expertise to develop innovative solutions and drive continuous improvement.
Companies that demonstrate commitment to sustainability are more likely to attract and retain employees who are passionate about sustainability and who want to make a positive impact on the world.
How can you approach this? What should you consider?
- Offer training programmes to educate employees about your company’s approach to ESG and how they can join in
- Empower employees to make a difference by giving them a voice and a platform to drive change (e.g. organise workshops to allow staff members to give input on desired ESG policies)
- Reward ESG performance by linking ESG criteria to incentives, such as financial compensation, additional benefits and job promotions.
"Awareness is at the heart of any successful sustainability transition. Employees are the catalysts of this change and their engagement is critical in integrating sustainability into the company's culture. Employees who feel they are part of a company that values sustainability are more likely to be engaged, committed and passionate about their work."
KAREN BAUM, Managing Principal Sustainability & ESG Services, BDO USA
Contact your local firm’s ESG advisers today to learn how BDO can help your company transition to sustainable business practices and meet the growing demands of stakeholders. The key to success lies in a combination of top-down and bottom-up approaches, where Board commitment and employee engagement come together to drive meaningful change.