Sustainability strategy for your business

A sustainability strategy is your strategic action plan for becoming a sustainable business. It’s based on a performance review, an analysis of your company’s market environment, and the requirements of the legislature.

Global challenges are manifold – so are your options

Find a sustainability plan that suits your needs. As a trusted advisor we work on your sustainable business strategy for maximum impact.

What is meant by sustainability?

Sustainability is a business approach that puts the responsibility for a company’s impact at the forefront. Accordingly, a sustainable business makes valuable contributions in the three areas of the economy, ecology, and society. Due to climate change, sustainable practices in business are often associated with measures in terms of environmental responsibility. But that is by far not all. Also, regulative and societal transformations are boosting the need for a sustainable business approach.

Corporate sustainability covers much more than climate action. A sustainable business strategy can also include social sustainability issues. Usually, the measures of a sustainability strategy converge in a company’s sustainability management. However, it is not only the ESG (Environmental Social Governance) or CSR (Corporate Social Responsibility) department, which is responsible for implementation. Corporate sustainability concerns the entire company in order to best position you for the future.

Elements of a successful and sustainable business strategy

A successful sustainability strategy depends on a systematic approach. Therefore, our sustainability strategy Framework consists of 3 phases, that allow us to develop a customized and feasible solution for you:

Phase 1:
360° analysis

Internal and external circumstances must first be analyzed and summarized as a basis for strategic decision-making.

Phase 2:
Strategy development

We define the pivotal strategic sustainability fields of action and deduct an integrated and overarching sustainability strategy.

Phase 3:
Strategy implementation

We implement measurable objectives and concrete measures, that contribute to the fulfillment of the strategic goals.

The challenge is real.

But the good thing is: Sustainability business strategies work out.

Sustainability is not an option but a necessity. Time ahead brings many challenges, that can affect your business: resource depletion, supply chain disruption, and major uncertainties due to climate change, biodiversity crisis or social injustice. Just to name a few. At the same time, the general public and other stakeholders are increasingly putting pressure on companies to be part of the solution – by so-called green growth or as a green business. An optimal sustainability strategy addresses all these circumstances.

Benefits of making your business sustainable with our EY denkstatt experts

Adapt your business to future risks and opportunities

Successful companies look ahead and prepare for the future. A successful sustainability strategy builds on the framework conditions to which a company is exposed.

Implement a sustainability strategy with impact

Developing a sustainability strategy can be a complex task. We offer focused and efficient processing adapted to your needs, as sustainability management is our core service.

We support legal compliance

The demands on companies are increasing, not least due to the EU Taxonomy and CSRD. This calls for insight, experience, and a holistic approach - we cover it all.

Improve your reputation and your reporting process

First the deeds, then the words. That’s the roadmap for improving your reputation. We offer a professional basis for sustainability communication through clear sustainability reporting processes.

Our sustainability strategy services

Development of a sustainability strategy

A sustainability strategy with clearly defined, easy-to-understand pillars is developed, based on a 360° review of your company’s performance and the context. This can include customer and investor demands. Its implementation seeks to extend the existing strengths and manage the weaknesses, satisfying an ever-rising demand from the legislator and the market for a professional, integrated, actively managed outlook on future sustainability measures. To evaluate the company’s current performance in sustainability management (so-called sustainability maturity), our EY denkstatt experts developed a modular analysis approach to best fit your needs.

Materiality analysis

Before delving into the implementation of the strategy , we highly recommend conducting a materiality analysis, also called materiality assessment. This represents the core of every sustainability management program and builds the basis for the topics discussed in reporting. It defines which environmental, social, and ethical topics are material and your company has to focus on. Our EY denkstatt approach corresponds to the recommendation of GRI Universal Standards and to the approach of “double materiality”, a mandatory element of future reporting in accordance with the CSRD.

What is “material”? This needs to be assessed from three different perspectives. First, from the perspective of the most important stakeholders, second from the perspective of environmental and social impact, and third from the perspective of relevance to business success. The topics that are identified as material become focus areas and will be separated from other topics that can be deprioritized.

Benefits:

Increased focus on (limited) internal resources and best use of reader’s attention (report)
Professionally derived materiality assessment can help prevent greenwashing, increase credibility and reduce reputational risks
Efficient management approval for strategic focus areas (reduced decision-making burden of conflicting internal interests)
Prioritization of topics leads to the focused operationalization of the sustainability strategy and allows an easier allocation of resources with a streamlined budgeting process

More information can be found here:

Sustainability governance

Our deep insight into manifold branches, company sizes, and sustainability governance approaches helps you to get inspiration on how to best integrate sustainability into your organization. Benchmarking with comparable companies and their sustainability management organization creates management awareness of what a suitable size and structure of contemporary sustainability management could be.

FAQ

Frequently asked questions on sustainability strategy

How does a sustainability strategy help a business?

The better you know your strengths and weaknesses, the better you can react and be prepared. What is true for business strategy in general also applies to a sustainability strategy. In order to manage your strengths and weaknesses, it makes sense to inquire about the perceived sustainability performance of your key stakeholders, research the performance of peers, evaluate their own sustainability maturity, and potentially get rated independently. Based on this analysis, opportunities to be developed and risks to be managed become apparent and you have a solid foundation for the strategy implementation. As a structural framework, it helps to have a finished materiality assessment and well-defined material topics.

What is a materiality analysis?

The materiality analysis represents the core of every sustainability management and builds the basis for all the topics discussed in reporting. It defines which environmental, social, and ethical topics need to be focused on. In this way, management resources can be used in a targeted and effective manner. General reporting standards and legal requirements are based on a professional materiality analysis.

What is the major difference between business strategy development and sustainability strategy development?

Ideally, there is only one business strategy that deeply implements sustainability considerations, such as planetary boundaries and social cohesion. In practice, however, business strategies often limit their viewpoint to short- and mid-term financial performance figures. A sustainability strategy fills this gap by evaluating current business models holistically and by picturing the alternatives needed. This includes extending the perspective to the long-term, including the entire up- and downstream value chain, evaluating external stakeholder perspectives, taking environmental and social impacts into account, and incorporating non-financial aspects of value creation and value retention, such as mitigated risk, brand and employer reputation, or independence of global market dynamics.

What is the major paradigm shift between GRI and CSRD?

Most of GRI’s thinking has been adopted by EFRAG in the CSRD’s ESRS draft. CSRD, however, embeds double materiality everywhere – which affects sustainability strategy development in such a way that it is not just focused on what is best for people and the planet, but also on the risks and opportunities businesses face due to sustainability-related trends. Organizations now have to report on the relationship between business performance and sustainability performance not only in terms of strategy but also in terms of governance, decision-making, and performance evaluation. Additionally, an aggregated sustainability management perspective as well as the contemplation of each and every specific material topic is necessary.

What is the correct caption for the axes of a materiality matrix?

There is no one correct approach, it rather depends on the reporting standard you use. For example, the GRI Standard recommends two dimensions.

economic, environmental, and social impacts (inside-out, that is the impact of the
reporting organization on the economy, environment, and society)
stakeholder importance

The CSRD / ESRS drafts also include two dimensions, but the second one differs:

sustainability impact (also inside-out, like GRI)
financial impact (effect of material risks and opportunities on enterprise value, business
model, strategy, goal achievement and value creation)

However, GRI as well as CSRD and other frameworks support the usage of all three dimensions:

Sustainability impact
Financial impact
Stakeholder input (GRI as its own dimension, CSRD to extend and validate the two other ones)

Sustainability strategy for your business

Global challenges are manifold – so are your options

What is meant by sustainability?