Even though the SEC climate disclosure rules continue to be delayed, at some point, there will likely be some rules surrounding reporting on carbon for publicly traded companies. The rule will likely have a far-reaching scope and cause change for years to come. The fact that we are wondering when the rule(s) will be finalized and enacted and not if a set of rules will ever be created is a major step to indicate that more and more people are onboard with why change is needed. Other indications of more people understanding why sustaaibility is important can be seen in everyday occurrences like more electric car re-charging stations being built, clothes being made of recycled content, and solar and wind energy growing in capacity.
Now the question is how. How do organizations adapt to new rules be they environmental, social or governance rules to the changing landscape of business and reporting on those non-financial factors. More importantly, how do organizations stay ahead of regulation and build resilience within their organizations to more easily change because they have already anticipated it.
Adopting sustainability as a strategic part of organizational planning offers a means to build value and resilience. For whatever sustainability issue(s) you are addressing, here are 8 steps in brief to help define important issues and take authentic actions.
Step 1: Current State. What is already being done?
Step 2: Benchmark: Gather information from multiple sources to gain an understanding of what others in the market are already doing and how your organization compares.
Step 3: Stakeholder Engagement. Surveys, collaboration, and interviews all are means of engagement. Engage with stakeholders to determine what is most important to them.
Step 4: Materiality: Determine and/or prioritize the sustainability issue(s) most important to stakeholders and the business. A materiality assessment is a formal way to help in this process.
Step 5: Implement Process Changes: Solution(s) to issues identified in Step 4 are integrated into the appropriate system or process within the organization. The response from management must align with the reason the issue is important to the organization and its stakeholders.
Step 6: Internal Education and Rollout: Before external communication, first train and report internally. Communicate internally about sustainability issues, which issues are critical, why, and how processes and systems will be changed or developed.
Step 7: External Communication: Report back to stakeholders on how the issue(s) are being addressed.
Step 8: Periodic Review: Evaluate the results to see if there are gaps to fill. This is an iterative process — as new information is gained, repeat appropriate steps.
As sustainability plans are established, gain traction and are seen as a source of innovation, opportunity and risk reduction, the culture and purpose of the business changes. Sustainability moves from initiatives to the engine that drives the purpose of the organization.
With more regulation to come, why sustainability turns into how sustainability. The 8 steps above provide a framework of how to implement a sustainability program and/or address sustainability issues.
written by trent romer