Environmental outlook
An ongoing, sincere and evolving environmental outlook strengthens your relationship with existing customers. Businesses are also under pressure from regulators and the market to prove that they are acting responsibly and sustainably. It is important to embed environmentalism and sustainability in your business strategy to help you build a more resilient business.
• An effective environmental and sustainable strategy can help you build resilience and secure commercial success.
• Each stakeholder will have different expectations. Your environmental and sustainability credibility could affect who will buy from you and do business with you.
• Sustainability initiatives can attract talented and committed staff, as people increasingly want to work for businesses that embrace sustainability. Sustainability helps attract and retain talented employees, supporting productivity and increasing innovation. Creating a culture of environmental awareness and sustainability in the workplace boosts employee morale.
• Engage with employees to look at resource efficiency and how you can be kind to the planet, and encourage them to work towards common goals.
• Strengthen teams and help to retain and attract good employees in order to make the company more attractive to investors and customers.
• Provide evidence of the company’s sustainability performance to back up marketing efforts, which customers could use as indicators when making purchasing decisions.
• Other drivers for environmental and sustainability strategies include regulatory requirements, business reputation, resource scarcity and consumption, climate change impacts, global environmental degradation, population growth and rising costs to business.
• Find out whether your business is fulfilling its sustainability potential and what you should consider when creating your sustainability strategy.
Be aware that investors are taking a growing interest in the environmental and sustainability performance of the businesses they invest in as they begin to look beyond short-term investment horizons to the creation of longer-term shareholder value.
• Different investors can have very different strategies and policies when it comes to the environment and sustainability. The first step to improving investor relations is to develop a detailed understanding of how they approach the topics, whether they are institutional investors, asset managers or funds.
• Assess how your company meets your investors’ expectations. This should reveal any gaps in your environmental and sustainability performance, identify any filters investors have that your company may not pass, and assess how relevant your reporting materials are to your key investors’ expectations.
• Based on an analysis of your investors’ expectations and how well your company fulfils them, you will be able to respond better to those expectations.
• Prioritise environmental and sustainability indices and rankings and improve your performance. These will have the most influence on your investor base.
• Evaluate your business against your competitors. A peer benchmarking analysis can show how your strategy and investor communications activities measure up against others in your sector.
• Understand how your investors perceive your environmental and performance and strategy. This is a critical step towards designing a more effective investor relations strategy in this area.
Your business responsibility covers a wide range of impacts you may have on the environment, including climate change, greenhouse gas (GHG) emissions, resource depletion (including water), carbon footprints, waste and pollution.
• Businesses must equip themselves with forward-looking and proactive approaches to determine the materiality of their environmental responsibility and its impact to the business. Environment and social issues have the potential to impede business plans, performance and even business models. To uphold responsibilities of trust and reliance in your business, you must be able to understand and evaluate material risks facing the business.
• Businesses should review existing risk management processes to ensure the risk management framework is adaptable and agile in addressing the changing risks and market landscape.
Aim to reduce your energy consumption and emissions, use water more efficiently and manage waste better.
• Consider improving your energy efficiency through:
— reviewing your energy bills and energy contract
— finding ways to improve energy efficiency
— switching to alternative energy sources
— using energy in cheaper periods
— using more energy-efficient appliances
— seeking energy support finance.
• To promote good water management try to avoid the over-exploitation of ground water, contamination of surface water sources, depletion flow in river basins and salinisation.
• Consider your waste as a resource that can be turned into raw material. Design your products so they can be reused, repaired or remanufactured. This way, waste can be reduced and lower your operating and raw material costs. For example, some printing businesses reuse their paper leftovers to secure their packages. This helps them to reduce costs and ship their orders safely.
• There may be a number of local government-supported programmes that your business can benefit from when deciding to go green.
• Your business will also need to consider which environmental laws and regulations apply to the business.
There are several sustainability indicators that you can use to evaluate how sustainable your business is.
Environmental indicators
• Consider the long-term impact of your business and ask questions to gain a clearer idea of the environmental effects it will have. For example:
— Is your business taking urgent action on climate change and what about its overall environmental impact?
— Is your business enabling sustainable production and consumption, and advancing the responsible use of natural resources?
• Measure the resources and raw materials your business uses and the amount of waste and emissions it generates to evaluate both the environmental and economic aspects of the business in order to define it as ‘sustainable’.
• Take into account the whole product lifecycle, from the choice of raw materials to the final disposal.
• Acknowledge whether the suppliers use renewable energy sources, the amount of CO2 produced by moving the products and whether the product can be recycled or reused.
Social indicators
• Evaluate national or international relationships and the impact on the local territory.
• Show the impact on the life quality of the employees and the local community.
• Consider whether your business is promoting inclusive practices, including gender equality, diversity and decent work.
• Identify what regulations and policies are in place for protecting your employees.
Governance indicators
• Measure your business’s sustainability performance and identify whether the governance structure is transparent, inclusive and accountable to stakeholders.
• Identify to what extent your business respects national or international sustainability rules, norms and standards.
• Assess whether your business structure complies with ethical and corruption-free business practices.
• Consider whether effective succession plans are in place to ensure the long-term success of your business. This includes building effective governance strategies and developing talent to take over key roles. Link to Leadership and People Management- succession].
• If there is a board, identify whether sustainability is included in the agenda of the board meetings as part of the business strategy.
