Sustainable Transformation, it’s time. When it comes to sustainability, the most important leaders are those who take action on their ambition, rather than simply having ambition. Many companies are aware of the need to reduce their carbon emissions and improve sustainability but translating those goals into real change is often difficult. Sustainability might be a relatively new objective for businesses, but the essential principles of transformation still apply. In the past two decades, WGA has collaborated with hundreds of companies that span a diverse range of industries and have various transformation objectives—including digital transformation, operational efficiency, and increased growth.
WGA’s sustainable transformation experience has shown that there are three key issues that prevent companies from making a change to sustainability: knowing how to establish the right sustainable transformation methods, where to focus for the most significant impact, and how to finance the journey. If these challenges and others like them are addressed in a methodical and systematic way with time-tested principles, then senior leaders will be able to achieve their objectives.
Sustainable Transformation: The ever-increasing need for sustainable change
As climate change becomes an increasingly pressing global issue, more companies are being judged not only on their financial returns, but also on their sustainability performance. This trend is being driven by awareness among key groups such as investors, customers, employees, suppliers, and regulators. Companies that do not integrate sustainability into their strategies and operations risk losing capital, customers, and talent, and may also face regulatory problems.
It is commendable that in response to the climate crisis, many businesses have committed to ambitious targets such as net zero. However, often these companies lack a clear plan for how to get there and simply focus on the end goal. Not being able to deliver on a sustainability pledge can be worse than not making the pledge at all, as it damages a company’s credibility among stakeholders.
Businesses transformations are difficult to undertake and even more so for sustainability transformation initiatives. The reason being that such efforts often touch on multiple business units and functions. Additionally, the effects of these changes are hard to precisely quantify. Finally, the company does not always have control over all the necessary factors for change. Consequently, your donation is imperative to the success of this effort.
For a successful sustainable transformation to be achieved, collaboration is key amongst the entire value chain – from those who supply raw materials to the end customers. It’s important for companies to make their legacy businesses more sustainable, as well as identify and capture new opportunities as they emerge from issues of sustainability and climate change. Both challenges require investments and new capabilities, and solutions and technologies are emerging faster than many companies can keep up with.
In addition, companies are subject to greater pressure to publicly disclose their sustainability performance. However, data related to sustainability and climate is often inaccurate and conflicting. Additionally, reporting standards are constantly changing, and some metrics designed by rating agencies can be subjective. As a result, companies often prioritize their ratings over developing a comprehensive strategy that would meaningfully integrate sustainability into all aspects of the company.
Despite the challenges we face, it is crucial that businesses take action now. There is a lot at stake in terms of meeting new customer demands, gaining access to capital, and mitigating risks. Companies can still differentiate themselves through superlative climate performance, but the window of opportunity is closing. In the very near future, sustainability will be table stakes.
Sustainable Transformation Success means
There are three primary challenges that CEOs face when it comes to climate and sustainability: lack of a clear business case, lack of leadership buy-in, and lack of employee engagement. To address these challenges, CEOs must take systematic, structured action. Proactivity is key, but it is also important to understand that transformation takes time. Leaders must be patient and work to build a clear business case for change within their organizations. With buy-in from key stakeholders, they can then begin to implement changes that will make a lasting difference.
Where to start?
There are many different areas where companies can focus their sustainability efforts to have the biggest impact. It is important to have a comprehensive transformation rather than isolated initiatives to be successful. ESG should be embedded across the organization to create high impact and enduring change.
Our Sustainable Transformation services extend across business functions and serve a broad array of industries. WGA covers all critical aspects of your Sustainable Transformation, including strategy, operations, business performance, quality, digital transformation, growth, business planning, innovation, lean, business process, supply chain management and information technology. We serve local, regional, and global management consulting clients, and we align our management consulting efforts with your overall corporate strategy.
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