Sustainability is often abstract for companies. There is also no universal standard for how companies can approach the topic. Many companies are therefore unsure on how to best implement sustainability.
In this guide, I would like to describe 5 steps that we use in our cooperation with companies to build a sustainability concept. Our approach is based on internationally recognized methods to create a CSR-strategy. However, the steps are not "set in stone". Rather, the 5 steps are intended to provide SMEs with guidance on how to bring sustainability into a practicable form. So let's get started.
Photo by Patrick Perkins on Unsplash
Step 1: Analysis of Status-Quo
The first step in creating a CSR-strategy is to write down all existing sustainability activities, to check the corporate mission statement for sustainability aspects and to examine the activities of competitors.
➡ Structuring sustainability activities
Many companies are already involved in the field of sustainability, but have not yet recorded their activities in a structured manner. A template that we use in our work assigns the activities to the following areas:
📌 About us
📌 Products & Services
📌 Supply Chain
📌 Society
This classification helps to get a first overview of the activities that are already being implemented. It should be noted that the goal is to act where the impact is greatest.
➡ Mission Statement
Sustainability is a big topic and every company has to examine how sustainability fits with their company. It is advisable to take a look at the corporate mission statement and ask yourself: Are sustainability aspects already anchored? How do I create a corporate vision in which sustainability plays an authentic role? The vision and mission are the North Star for companies. They indicate where the journey should go. It is therefore essential that sustainability aspects appear in the corporate mission statement.
➡ Competitors
The last step of the status-quo analysis is to look at the market and competitors. How is the industry positioned? How do competitors get involved? Looking at the competitors often brings interesting impulses and suggestions for one's own commitment. It also provides information on where the market stands and whether sustainability commitment can also be used as a competitive advantage.
Step 2: Analyze stakeholder expectations
Step 2 is about identifying the stakeholders and analyzing their expectations with regard to sustainability. The standards of the Global Reporting Initiative (GRI) describe stakeholders as follows:
"Entity or individual that can reasonably be expected to be significantly affected by the reporting organization’s activities,products and services, or whose actions can reasonably be expected to affect the ability of the organization to successfully implement its strategies and achieve its objectives" (GRI Standard 101)
Basically, stakeholders are important people (groups) who can have an impact on the company's success and who can be impacted by the company.
Stakeholders can include:
📌 Employees
📌 Suppliers
📌 Customers and consumers
📌 NGOs
📌 Investors
After the stakeholders have been identified, it is important to find out what expectations the stakeholders have in terms of sustainability.
🔍 Are social and environmental standards important to consumers?
🔍 Do customers expect greenhouse gas emissions to be reduced?
🔍 Do employees want flexible working time models?
Stakeholders play a key role in the creation of a sustainability strategy. Their point of view must be examined and integrated in detail.
How can companies do that? There are a variety of tools to get in touch with stakeholders.
Some are listed here:
Workshop with experts
Surveys
Interviews
Supplier Days
CSR reports from customers
Customer questionnaires
Works council
Consumer inquiries
Social Media Channels
There are no stringent guidelines on how intensively companies should exchange with stakeholders. However, it is important to get a solid understanding of stakeholder expectations with regard to sustainability. These insights help companies to keep all important sustainability topics on their radar and to set up a strategy that is also relevant in the medium and long term.
Step 3: Identify additional topics
We don't want to leave out any important issues. Therefore, it makes sense to also look at current trends and to examine international sustainability standards. Maybe there are topics that are important to your business that you want to include.
Some standards and guidelines that can be considered are:
📌 Global Reporting Initiative Standards
📌 20 criteria of the German Sustainability Code
📌 10 Principles of the Global Compact
All topics identified in step 1, 2 and 3 can be placed in the "topic list", which we will need in step 4.
Step 4: Prioritize topics
In steps 1-3, you have identified a variety of topics. These need to be condensed in step 4 so that you can focus on the most important ones. In practice, the so-called "materiality matrix" is used to prioritize the topics. Here (often in a workshop format) the identified topics are classified in the matrix according to "importance for the company" and "importance for the stakeholders". An example of such a matrix is shown below. The most important topics are the topics that appear on the top right of the matrix. These topics are at the core of your sustainability strategy.
Example of a materiality matrix
Step 5: Build the action plan
The last step is to draw up an action plan for the most important topics. The aim is to define goals, measures and KPIs as well as to define responsibilities in the different departments. For setting up the goals, we can use the SMART-method that helps us in creating high qualitative goals that can guide and inspire us and hold us accountable.
By following the 5 steps, you can create a solid CSR-strategy. If you are unsure or need help in any of the steps, write us an email at federicasuess@etika.io. We are happy to support you.