Sustainable at the core - Seeding bright futures
Stakeholder capitalism is emerging as a collective priority given the clear interdependence of healthy societies, economies, and the environment.
A quarter of organizations are putting sustainability and environmental, social, and governance (ESG) at the heart of their transformation journey and reporting making great inroads. And one in three executives have diversity, equity and inclusion DEI tied to their own performance ratings. Yet, as organizations busily reinvent themselves, it is clear they need to anticipate and fulfill unmet needs; globally, 24% of the workforce are not confident they can afford the healthcare their family needs, for instance.
Organizations want and need to ensure sustainability is at the heart of business transformation — from company purpose, work standards and investment strategies to circular economy aspirations, environmental impact and supply chain standards.
The challenge is for organizations to live by their pledges to new work standards. How? By ensuring that these statements are the start of a journey towards becoming sustainable at the core — in other words, transforming to deliver every area of the business in line with sustainability principles. To do this, organizations need to:
- Embed sustainability in their purpose and culture
- Transform for sustainability
- Establish people sustainability as the “social” in ESG
- Differentiate themselves through sustainable investments
Sustainable business is no longer an isolated, single sphere of responsibility, but rather a multi-stakeholder agenda and part of a collective social and environmental ecosystem.
Pressure to make progress on ESG and share a social conscience is coming from all sides, with the number-one driver for this agenda being growth opportunities in response to customer demand, and employee sentiment and investor pressure driving 27% and 22% of companies’ sustainability agendas in 2022, respectively.
Elements of a multi-stakeholder sustainability agenda
Multi-stakeholder empathy is driven by four areas
Business sustainability,
ESG performance,
External factors including
- Customers: making choices based on ethical products and practices
- Activists/Media: highlighting inaction, especially in regard to climate change
- Regulators and rating agencies: reporting on ESG progress and actions
- Investors: vocalizing their intent around sustainability investment and ESG
Internal factors including
- Employees: caring about organizational practices and ethical conduct
- CHROs: shouldering responsibility for ESG progress and outcomes
- Executives: increasingly setting ESG and sustainability goals
- Boards: assessing sustainability and competitiveness by their reported progress on ESG metrics
Combined, all of this leads to a purpose-driven organization