Inspiring a new approach to business through sustainability

The need to adopt sustainability programmes comes amidst more complex material risks for companies.

Irreversible changes to our planet brought about by climate change are starting to become more apparent nowadays, amidst ever-increasing demands on energy and food supplies and dwindling natural resources.

As the impacts of environmental, social, and governance (ESG) issues can no longer be ignored, organisations must also do their part in incorporating sustainability programmes into their business operations and supply chain and utilising this value in creating long-term value.

Sustainability is a business principle in which organisations consider the environmental, social, and governance (ESG) impacts of their operations on society and the environment. This value allows companies to contribute to addressing the world’s most threatening problems.

In today’s ever-changing world, it is important for businesses to adopt sustainability practices to ensure longevity and overall company success. Younger generations view sustainability as a pressing concern, making sustainable businesses more attractive to them.

This also means that in the near future, a company’s engagement in sustainability programmes is the key to attracting and retaining talent. ESG metrics can now weigh much value as it determines the overall value and how ethical organisations operate.

Where organisations should start

Sustainability is a fairly recent trend, which means that most companies are just beginning to embrace this approach to drive business value. However, it is important to understand that this approach is a journey – one that will increase in value and importance over the years.

We at BDO Consultants have identified a five-stage maturity roadmap that helps illustrate the sustainability integration journey. Based on the level of governance, the roadmap aims to help simplify the complexities of sustainability and to promote the value that sustainability integration can create for a business.

Integrating sustainability into a business is a journey – a transformational journey that will be an ongoing process of monitoring and modification and rethinking ‘how’ you can ultimately embed sustainability across the organisation.

These stages include helping businesses assess and prioritise materiality risks and opportunities, having elements of a sustainability programme in place, approaching the sustainability programme in a systematic, whole-of-business approach, developing products and services that make positive impacts in their respective markets, and using social, economical and environmental criteria to positively impact those in their value chain.

Meanwhile, we have also taken a three-phase approach in addressing the continuous improvement process which aims to consolidate an organisation’s commitment to sustainable development, focussing on the measurement of impacts, corporate objectives, and change management.

The first phase involves defining and planning the activities to be carried out, taking into consideration corporate objectives and consistency with internationally recognised standards for non-financial reporting and other regulatory frameworks recognised as best practices.

Within the second phase, BDO selects tools and processes to effectively capture ESG data and content, where they analyse and measure these through a risk-based approach. Lastly, BDO facilitates the preparation of the final draft of the report based on careful analysis and collaboration with management.

BDO has also developed several sustainability tools to help its clients raise awareness of how ESG and sustainability concerns impact their organisations and chart their progress towards sustainability. These tools help them chart their organisations’ business against global goals and deliver insights that can better steer a company’s strategic decisions.

Rethinking the business approach

It is imperative to recalibrate businesses to ensure that their systems and foundations are resilient and fit for a sustainable future. COVID-19 and extreme climate events remind us how interconnected economies, environments, and societies are, and that individual success is largely driven by societies’ success.

By rethinking our businesses through the sustainability lens, we have the opportunity to unlock value and create positive change. At BDO, we aim to inspire, educate and lead an unstoppable movement for sustainable business practice in our markets.

Sustainability programmes now become a crucial part of an organisation’s success and survival in the market, and a crucible to its competitiveness in the business landscape.

By: Roger Loo, Executive Director and Head of Management Consulting Services BDO Consultants Pte Ltd