Step 1 – Develop the sustainability baseline and accurate picture of now
Written by Dan Botterill
I will caveat now (and this remains for all six steps) that the complexity of this exercise will be linked to the scale and range of activities undertaken by your organisation.
Looking at some of the bullet points I captured in the downloadable PDF, it’s clear that this is a significant, if not the most significant part of the process. Each bullet point is a paper in its own right but let’s not get bogged down in that right now.
So, taking a step back, the first thing we need to do in order to devise and implement a sustainable strategy for our business, is to understand what we are currently doing, in as much detail as possible.
This involves undertaking a number of activities, but looking at the six steps PDF again, I think we can group these activities into 3 areas/tasks as a starting point.
- Understanding what’s important in sustainability/ESG terms to your organisation. This involves materiality, risk assessment, assessing direct and indirect impacts.
- Getting buy in and investment. We need senior level endorsement; we will also need to invest to save.
- Getting hold of data and information and interpreting it.
So, I think the three big questions here as a starter are:
1. How do we work out what’s material?
Keep the first pass on this assessment very high level. In the early days of this exercise you are building information and understanding to communicate risk and opportunity to the board or senior management. These audiences (in general) like concise, pithy summaries backed up by detail in Appendices. Build your initial assessment with this in mind.
If I’m looking at an organisation, the first thing I will do is read as much as I can about it online; what it does, where it operates, what it sells, who its customers and stakeholders are. I will try to find policies I will Google search the organisation name plus sustainability. I will look for the Directors/board composition. I will read annual reports. This helps me understand what the functions of the business are. I will go and visit them; I will interview staff. I will see the factory, the hospital, the office environment. I will read product reviews, etc.
From this point, I can then start to get my head around the risks and I will then frame the activities they undertake in the context of :
- Environmental risks/opportunities
- Social risks/opportunities
- Governance risks/opportunities (think about compliance here too)
Taking ‘Environment’ as an example:
- What activities do we undertake that have a direct/indirect impact on the environment?
- At what scale? (qualify, quantify to get data point/set) - what’s the worst-case scenario?
- How does the impact occur? What are our current management processes? What controls do we have in place?
- We use energy to power our office. Where does it come from? How much do we consume What does it cost us? Is it from renewable sources?
- We produce a range of waste types, where are they produced? In what volumes? What is the cost? Where does our waste end up? Are we compliant?
2. How do I convince the board/Senior management to back my plan?
Using ESG to establish your materiality, risk and opportunity profile is a concise way to start evaluating sustainability and also immediately put it into language the C-suite will be familiar with. There are far more technical and detailed ways we can do this but I would visit those methods further down the line. We don’t want to over complicate this.
The other thing you must do is cost your plan, with payback and ROI. Charitable donations are the only exception to this, but this is a component of the plan not the plan. Ultimately, we are developing a plan that delivers greater resource efficiency and reduces risk in the long term.
3. I can get the data and information, but what do I do with it now?
This is where you are most likely going to invest in external expertise on the basis you don’t have the in-house role or if you do the in-house role is generalist in nature. Certain things will be straight forward to understand and spreadsheets will work perfectly for many smaller organisations as a starting point.
Some subjects though will require expert support for example analysis of resource data – waste data in particular is very complex. Scope 3 carbon reporting is another complex area. Look for a partner that can work with you and support you. Make sure you find a way to ensure that skills are developed in your organisation so you aren’t reliant on expensive consultants in the long term.
I’ll be back with the next instalment in a week or so – but in the meantime, feel free to contact us if you want to talk about sustainability in your organisation.