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Why every 2024-2030 strategy needs a Sustainability component

5/06/2023

If your business is not sustainable, it will not sustain!

If you read today’s press or listen to the daily media, you can’t get around the SUSTAINABILITY topic. As a leader in todays business you may question WHY this has become such an important topic. In this short article we’ll give you 5 good reasons why every 2024 strategy and beyond should have a SUSTAINABILITY component.

50 Years of recent history

Sustainability has been around for a while. In 1987 the World Commission on Environment and Development’s led by Norwegian Prime Minister Gro Harlem Brundtland issued ‘Our Common Future’ (1987) where Sustainable development was defined as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. This definition nicely introduces the idea that we borrow the planet from our next generations, so we should hand it back in same or better state than how we received it.

More recently in 2015 – the UN issued it’s 17 Sustainable Development Goals (SDG’s) for 2030. The fact that all UN members signed up to achieve a commonly agreed goal is more important then then the exact goal itself. For the first time Sustainable Development Goals included much more then just protecting the Planet and the Climate. It also included topics like Education, Diversity, Innovation, Peace, …It covered Environmental, Social and Governance topics which led to the commonly used ESG-abbreviation as an equivalent for Sustainability.

SDG4

Sustainability within today’s context : from Shareholder profit to Stakeholder Welfare

As a result of the introduction of the SDG’s, businesses understood that Sustainable leadership means more than just taking care of the planet.

In the ‘70s Milton Friedman was awarded a Noble Prize with his 1970 Friedman Doctrine stating that  “The Social Responsibility of Business is to Increase Its Profits”, arguing that “a company has no social responsibility to the public or society; its only responsibility is to its shareholders”. Today this vision has completely shifted from solely focusing on ‘Shareholder Profit Maximization’ to focus on ‘Stakeholder Welfare Optimization’. A business is ‘good’ when everyone who touches or gets touched by it, benefits from it.

So why should I include SUSTAINABILITY in my business strategy?
Let us give you 5 good reasons:

1 Access to Finance

With the Green Deal the European Commission is mobilizing at least €1 trillion in sustainable investments over the next decade. Every member state has processes available to assign funds to sustainable investments. Banks are given the opportunity to offer better interest rates to companies that are making sustainable investments. So don’t miss the opportunity, think long term and make the right investments supported by the Green Deal.

2 Your customers and suppliers will force you

Every business is a supplier of products and/or services, and every business is buying goods and/or services from other companies. So we all are part of a total supply chain. If you believe that you shouldn’t worry about doing business sustainably today, your customers or suppliers will force you. This will help them manage their end-to-end ESG impact. Because making use of unethical suppliers, or serving unethical customers, will also impact their sustainability score and reporting.

3 Your consumers and employees will force you

With a smartphones everywhere, it is obvious that your stakeholders and employees have become your most important ambassadors – in good and bad times. Whatever happens inside your organization will become visible outside. With the war for talents, recent generations have choice of employer, and have become very selective about which company to work for. Ethical standards about managing employees have completely changed ! Only those companies that have sustainable purpose, practices and/or a sustainable image will be able to continue to attract the best people. Finally your consumers and customers have the choice of products that they buy and where they buy them from. Current generations have become more and more informed and selective about the origin of goods, people adopting new lifestyles make different choices for ‘good’. With (true and fake) information always at their fingertips the reputation of your company and products becomes super critical to manage.

4 Government will force you by law

As governments feel that the ESG urgency grows and that businesses respond slowly, they will strengthen legislation and impose more and more rules and controls. 2 examples that will impact you within a relatively short to medium term are (1) the Corporate Sustainability Reporting Directive whereby companies are required to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment (2) the Corporate Sustainability Due Diligence legislation. When adopted, this law would introduce requirements for companies to identify and prevent, bring to an end, or mitigate the actual and potential impacts of their activities on the environment and on human rights abuses. With this legislation leaders of business will be considered responsible for the contribution or non-contribution of its company to the ESG. While all these legislations are being gradually implemented, if you are a supplier/customer of one of the companies being hit earlier, you will have to show evidence of good practices in order for your customer/supplier to get satisfactory reports.

5 The Urgency

Our/Your children are right, we are part of a generation that has not taken care enough of ESG impact during previous decades. The messages from Club of Rome and Brundtland were not spread widely enough and our generations and the previous generations have not acted. We need to catch up now and economists and scientists have calculated that the ‘cost of acting’ is lower then the ‘cost of not acting’. A general evolution whereby governments and businesses work hand in hand towards a better future for all is needed now. Your business will also need to contribute, because we are convinced that if your business is not sustainable, it will not sustain !

If your business is not sustainable, it will not sustain

If you have questions about how ‘to tackle’ this challenge, how to embed Sustainability within your strategic plan and how to turn this risk into an opportunity for your business, do not hesitate to contact any of your Threon contacts.

Why every 2024-2030 strategy needs a Sustainability component

So why should I include SUSTAINABILITY in my business strategy?
Let us give you 5 good reasons:

1 Access to Finance

2 Your customers and suppliers will force you

3 Your consumers and employees will force you

4 Government will force you by law

5 The Urgency

If your business is not sustainable, it will not sustain

If you have questions about how ‘to tackle’ this challenge, how to embed Sustainability within your strategic plan and how to turn this risk into an opportunity for your business, do not hesitate to contact any of your Threon contacts.

Ghent

Brussels

Luxembourg

Den Haag

Stay in touch

Why every 2024-2030 strategy needs a Sustainability component

So why should I include SUSTAINABILITY in my business strategy? Let us give you 5 good reasons:

1 Access to Finance

2 Your customers and suppliers will force you

3 Your consumers and employees will force you

4 Government will force you by law

5 The Urgency

If your business is not sustainable, it will not sustain

If you have questions about how ‘to tackle’ this challenge, how to embed Sustainability within your strategic plan and how to turn this risk into an opportunity for your business, do not hesitate to contact any of your Threon contacts.

Ghent

Brussels

Luxembourg

Den Haag

Stay in touch

So why should I include SUSTAINABILITY in my business strategy?
Let us give you 5 good reasons: