The evidence to support the business case for addressing sustainability and climate change is clearly mounting, and understanding the issues and impacts has become a key imperative for businesses to ensure long-term future viability.
Sustainability is “a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations”.1
Companies that understand the breadth of unexpected risks, the scale of potential opportunities and have started to quantify the intangible value, are companies that are built for the future. They are demonstrating leadership at all levels within the company. This ranges from strategy and governance that recognises the interplay between global resources, through to the fundamental shift that places innovation at the forefront of company culture. Understanding the inherent value in dealing with the challenges of sustainable business practice identifies companies as planning to exist in the longer term.
In New Zealand, it is critical that business incorporates sustainability in a way that guides strategy development, decision-making and practical action across a number of areas. A sustainable business is one that is built on:
- Strong corporate governance where transparency and accountability are high on the agenda, there is senior level commitment to widely recognised principles and clear decision-making processes that include ethical and sustainable factors.
- A strategic approach whereby the organisation is clear where it is going, how it is going to get there and can clearly articulate how being sustainable is an essential part of the business model. Corporate disclosure is recognised as an integral part of being transparent.
- An innovative approach to its business model, anticipating change and relishing challenges. Integrating sustainable elements into new products/services, decision-making processes and organisational culture.
- An enterprise-wide view of risk which includes the use of stakeholder engagement to elucidate on different perceptions of stakeholder risk, reputation risk and sustainability risks, such as the consideration of supply chain issues, environmental management and customer expectations.
- An informed understanding of the base of resources upon which it is dependent, integrating the full value into decision-making processes, such as design of new products/services and technologies, or strategic corporate direction.
- An awareness of local impact, local wealth creation, understanding of the value of local culture and language, and innovative identification of community-focused opportunities.
PwC is well-placed to help companies achieve the following outcomes:
- Innovative strategy that understands how sustainability can enhance the business model, with an articulated business case, clear value drivers and a full understanding of the risks and opportunities.
- Clear governance structure that is guided by strong principles, is transparent and accountable and rests on a culture where engagement is critical to business and market intelligence.
- Fully integrated management and reporting systems that translate issues and impacts from risks into business opportunities.
- Performance focus that recognises the link between innovation and resource use, but that also understands the need for strong controls and the credible market signal that assurance provides.
1. Our Common Future World Commission on Environment and Development, Oxford University Press 1987