In "Leading Sustainably - The path to sustainable business and how the SDGs changed everything" (Routledge), we introduce the "Five Steps to a Sustainable Business Model", a system that represents the common organizational evolution of a company that sets off on its journey to integrate sustainability into its processes and align itself with the SDGs.
As a business ascends our Five Steps, it progresses through distinct milestones that we believe companies on this journey must achieve before they can proceed to the next. Starting from the fundamental and imperative requirement of establishing a base-level understanding of sustainability, companies then leverage that requisite knowledge of the subject to build A Teams, set high-level objectives, and make initial choices around sustainability.
Once things start moving with a few first wins, executives should continue to engage in capability building and disseminate sustainability thinking to all functional roles across the organization via leadership development and training. This prepares the field for setting cross-organization priorities and achieving buy-in. When a business has done this, then it can create total alignment with sustainable practices across the company functions and integrate sustainability throughout its processes — “To put sustainability at its core”, as we say. (A full list of the milestones for each step are listed in the graphic below and at the bottom of this article.)
As we write in "Leading Sustainably", "The key to advancing through ... the Five Steps to a Sustainable Business Model is in spreading sustainability knowledge within the organization. Without a basic understanding—at a minimum—of sustainability concepts, it is near impossible for teams to make progress." To advance your sustainability transformation and thus prepare for future climate-related threats, companies need to take the crucial first step and vastly increase their understanding of what sustainability means in a business context.
To learn more, check out "Leading Sustainably" or contact us directly
Milestones in The Five Steps to a Sustainable Business Model
1. Base-level Understanding
— Senior management awareness
— Building of a sustainability team
— High-level Objective-setting
2. C-level Engagement & Initial Choices
— CEO support and buy-in for a business model shift
— Aligning current activities to SDGs
— Materiality analysis to inform sustainability priorities
— Initial target setting for priority areas
— Reporting (e.g. GRI, ESG)
3. Actions & First Wins
— Launch and roll-out of initiatives
— Partnerships for action (i.e. civil society, international orgs)
— Active Communications (internal & external)
— Intra- and inter-industry engagement and recognition
— Progress tracking along initial targets
4. Cross-organization Priority Setting and Buy-in
— Clarity on current position and direction (i.e. versus best-in-class players, other competitors)
— Understanding of impact on all SDGs (although priorities may be structured around a few)
— Roll-out of clear KPIs
— Sustainability integrated into product or services portfolio
— Building cross-organization sustainability knowledge and capability, via leadership development and training
5. Alignment and Process Integration
— Sustainability strategy = Business strategy
— Clear action plan—deliverables, timings, responsibilities—to support strategy
— A Common Platform
— Values and Principles
— Integrated approach to business choices, planning, product development, and reporting
— Systems (technologies and processes) in place to enable regular tracking against new KPIs
— New KPIs embedded in employee review and incentive systems