Actualising sustainability
At a glance
Today’s businesses face the dual challenge of meeting rising sustainability expectations while navigating economic uncertainty and constrained budgets. Although the business case for sustainability has long been established, the regulatory landscape of 2024 places new pressures on companies to fulfil their commitments and deliver on their strategies. From urgent climate targets to sweeping legislation on the environment and human rights, the demand for impactful corporate sustainability action has reached unprecedented levels.
In many cases, this demand is not being adequately met. Simply put, the needle is not moving fast enough, prompting executives to rethink their approach to sustainability. The GHD Sustainability Monitor 2024 underscores this shift, revealing a concerning gap between business executives’ ambitions and what is actually being done. Despite substantial efforts to incorporate sustainability into overall business strategies, many of these plans fail to pass the viability test. The core challenge isn’t a lack of strategy or understanding of the value of sustainability, but rather a deficiency in practical implementation and action.
As companies fall short of making sustainability real, viable and commercially sensible, identifying a way forward that equally prioritises strategy, planning and delivery is critical. Focusing on one aspect without the other risks widening the gap, leaders need to move from strategy and target-setting to building credible roadmaps that make implementation and execution possible. This starts with asking frank questions — “How do we actually do this?” “What is the full cost of our plans to make it happen?” — and continuing to ask them along the way. This practicality lies at the heart of actualising sustainability.
Designing and implementing the technical interventions needed to drive transformative change
In our current financial climate, there’s no denying that securing the investment or budget needed for sustainability initiatives is challenging. Organisations that prioritise multidisciplinary thinking and design to create a balance between short-term needs and long-term outcomes will pioneer in this space. Companies need to view sustainable development as an opportunity for innovation and improvement — and do things differently to achieve organisational and broader sustainability goals.
When done right, sustainability drives new value, growth and efficiency. It’s more than ticking the corporate sustainability box: It’s a whole-of-business change representing big leaps forward. Many leaders realise they must find entirely new ways of doing business. For example, a traditional oil supplier shifting to become a mobility energy business or a manufacturer moving to entirely sustainable processes. Arriving at this point requires moving beyond quick-win initiatives to redesign and reimagine entire operational processes, multistakeholder partnerships, and physical spaces and places.
In hard-to-abate sectors with industrial facilities, achieving greater sustainability often means reshaping the entire physical environment to benefit people and the planet without losing sight of the bottom line. While a roadmap might kick off with emission reduction tactics and risk mitigation efforts, at the same time, smart companies also work on more in-depth five- to ten-year projects that focus on innovative production methods and supply chain logistics.
There are many inspiring examples to draw from. For instance, clients in the food manufacturing sector are digging deeper into what’s possible and reimagining the entire supply chain and ingredients to drive better outcomes for customers, producers and communities. Companies are incorporating circular economy principles into the sustainability planning and implementation toolkit, focusing on reducing waste and pollution, minimising impact, reusing products and materials, and regenerating nature. Packaging is also evolving, with a heightened focus on elimination and material circulation as part of the solution conversation.
Impactful, game-changing sustainability strategies can be an expensive, long-term commitment. Understanding how much it will cost demands a high level of granularity in a plan to achieve targets relating to carbon emissions, water efficiency, waste and community outcomes. The granularity comes from the detail of designing and pricing the solutions, iterating through each needed system and understanding how they intersect within your organisation and value chain. Following this approach provides a whole-of-life and whole-of-organisation understanding of the economic feasibility of what you want to achieve.
Connecting your strategy and planning with technical delivery
Your sustainability strategy has longevity when it considers not just the “what” but the “how” of implementation. Bringing together the design, construction and operationalisation of systems, platforms, processes and people to promote sustainable and equitable financial growth is critical. Companies are increasingly achieving real sustainability impact and success through better-connected teams working across strategies, planning and delivery. Consistency across these three areas makes it possible for a sustainability strategy to extend beyond a mission statement and be actualised through projects with meaningful change.
It’s about deciding who and what is needed for an organisation to meet their carbon targets. Regardless of industry, we are seeing that quite often a discussion that begins with identifying how to reach net zero goals often becomes about the physical manifestation of their future business.
Actualising sustainability delivers value because it involves a deep analysis of the dynamics, approaches and risks. It prioritises a multitude of connection points such as asset transition, business models, digital technology, communities and access to funding. When we asked leaders what they needed more of to achieve their goals, specialist sustainability skills combined with business acumen topped the list. The general lack of in-house resources and knowledge points to a need to get creative when bringing all the elements together.
Organisations are progressively understanding that success depends on a cross-functional team of internal and external stakeholders, critical thinkers and technical leaders. This doesn't mean outsourcing every element in your sustainability plan is best either. It’s expensive, and organisations may miss overlapping opportunities to be smarter by leveraging valuable internal intelligence. Instead, success comes when companies bring the right people together to turn ideas and ambitions into reality.
Questions leaders can ask to actualise their sustainability strategy
Getting your organisation future-state ready means having your goals validated by scientific, economic and financial principles and feasibility. Working through the following questions will guide an outcome-orientated conversation within your organisation and help prioritise efforts.
1. Do you understand the full cost of implementing your sustainability strategy?
Understanding the year three, five and ten costs of capital and resources, as well as the financial impacts and downtime losses, will help leaders make informed decisions and identify opportunities. Consider more than just expenditure to include potential cost savings that may be realised from implementation.
2. What is the financial impact of not meeting your sustainability targets?
Depending on your jurisdiction, failing to meet sustainability targets may include regulatory penalties including fines and legal costs. There’s also the long-term risk of increased operating costs through inefficient resource use. Reputational damage, investor withdrawal and supply chain disruption may also impact your bottom line.
3. Is your organisation impacted by mandatory regulatory changes?
Your sustainability strategy may inevitably become a non-negotiable as ESG disclosures become further standardised and mandatory. Organisations could face penalties for not adhering and aligning to corporate responsibility and transparency in this space.
4. Do you need to reevaluate your ambitions based on what’s possible?
Realistic strategies are more likely to be feasible, achievable and successfully implemented. That doesn’t mean you scale back, but rather focus on actionable strategies while balancing resources in a way that contributes to ongoing business success and resilience.
5. Are your goals founded on an achievable reality for your cost structure?
Sustainability strategies that are well-integrated with the cost structure are more likely to be viable over the longer term and get done. Stakeholder and investor confidence stems from goals that are founded in a realistic understanding of the organisation’s opportunities and limitations.
6. Do your targets factor in the ability to operationalise the changes needed to measure and verify your sustainability performance?
Your sustainability strategy becomes effective and credible when it’s grounded in your ability to implement, measure and verify impact. The approach transforms efforts from theoretical ambitions into transparent and feasible outcomes.
7. How can you use digital technology to influence your entire workforce to enable your sustainability strategy?
Many organisations have existing technology and platforms that can be applied to further sustainability efforts and projects. Conduct a digital stocktake to understand what you have versus what you need will help.
8. Is there a mindset shift that needs to happen across the organisation before you can proceed?
A significant internal stakeholder engagement effort is needed to educate and inform your people to bring them along on the journey, Clear planning and change management tools will help your organisation build resilience, adapt and benefit from sustainability efforts.
9. Do you have the resources to act fast, ask more questions and test assumptions?
There’s a growing need for a new breed of sustainability professionals who can talk the language of business and commerciality while also grasp the technical complexities of sustainability.
10. How will you actually do this? This is a new and complex territory.
We are in unchartered waters, and while the challenges are complex, the way forward does not have to be. Adopting a structured framework along the way that provides ample opportunity to learn and investigate, test concepts, refine, deploy and review will clear the path for fresh thinking, new ideas and, most importantly, actionable steps.
Discover more: GHD Sustainability Monitor 2024