CORPORATE SUSTAINABILITY SYSTEMS: MEASURING AND MANAGING THE PARADOX

A Need for Well Trained In-house Sustainability Officers & Comprehensive Systems

As companies strive to improve financial performance, developing and integrating a coherent sustainability strategy, and a systematic way of managing social and environmental impacts, often becomes the greatest challenge. Admittedly, it is not easy to move from developing a partial system that deals with the preliminary Environmental, Social, Governance (ESG) problems and performance indicators, to using an integrated program that includes sustainability in day-to-day decision-making. Since sustainability is fundamentally complex due to its nature (and the unclear direct link to profit), implementing and integrating sustainability strategies thoroughly has proven more difficult and tricky than any other improvements.

In order to simultaneously achieve excellence in social, environmental andfinancial performance, an organization not only needs a system that understands the drivers of ESG performance and the impacts of performance on the corporate stakeholders, it also needs to implement this system throughout the organization. Correctly implementing the proper system and evaluating its impacts on financial performance is extremely complicated and can be problematic. Since relationships and trade-offs between financial and ESG performance work and evolve dynamically, decision-making is proving progressively harder for sustainability.

It is imperative to thoroughly understand the drivers of social and environmental performance and impacts on stakeholders. Furthermore, it is required to integrate this knowledge into day-to-day decisions and action plans for the whole company. Only through using this knowledge can a company determine whether a system is comprehensive and complete, and therefore appropriate for implementation. Adding to that, managers are also expected to quantify the link between ESG drivers, actions and financial performance.

As each organization is a unique entity facing diverse challenges both internally and externally, in-house Sustainability officers play an increasingly important role for the financial viability of management choices.

As organizations need to increase the speed they adopt responsible business practices, programs can no longer be marketing or communications oriented, but have to be real strategies based on international frameworks and recognized models.

Integrated reports and the use of social media are the latest trends and may be on the right direction but they are often considered as quick-fixes in a business world where stakeholders demand real effort. Hence, the need for trained in-house professionals that have a deep knowledge of the organization’s culture and the external environmental pressures is mandatory. In-house Sustainability professionals have the knowledge and responsibility of strategic planning and selecting the appropriate sustainability programs that meet core business requirements. They are entrusted with the task of effectively implementing sustainability programs.

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