Es lohnt sich für Unternehmen, wenn sie eine Nachhaltigkeitsstrategie entwickeln.
30.04.2024

Guide: How do I develop an effective sustainability strategy for my company?

Developing an effective sustainability strategy makes companies fit for the future and secures competitive advantages. This guide shows you step by step how to create a long-term plan for the future with social and environmental practices.

Developing a sustainability strategy is essential to make your company fit for the future.
The crucial point here is that you can tackle the key issues in a targeted and structured manner on the basis of the strategy.
In other words, minimize negative impacts, drive positive developments, reduce risks and seize opportunities.
This results in 5 clear advantages for your company:

  • Competitive advantages
  • Strategic planning
  • Better image
  • Greater customer loyalty
  • Greater attractiveness for talent

We present these benefits to you in more detail in the blog post “5 reasons for a sustainability strategy“.
Now we want to show you how to develop an effective sustainability strategy step by step.
We want to dive deeper into the development of such a roadmap for the sustainable transformation of your company.
This guide will take you through the entire process.
We look at how you can

  • Identify key issues,
  • Define suitable measures and goals
  • and ultimately arrive at an effective strategy.

This gives you a holistic focus on ESG issues and the implementation of environmental, social and governance aspects.

How do I develop a sustainability strategy for my company?

“Lack of concrete goals and KPIs” – this is one of the biggest obstacles to sustainable transformation in companies, as the Bertelsmann Stiftung’s Sustainability Transformation Monitor 2024 shows.
The lack of resources – both monetary and human – also plays a major role.
A sustainability strategy provides the solution here.
It contains concrete goals and key figures to monitor progress.
And it focuses on the most important issues so that human resources can be deployed efficiently.
However, there are other important steps in the development of an effective ESG strategy, which we will now take a closer look at.  

1. status quo and key topics

To know where you want to go, you first need to know where you stand.
This is also the case when you are developing your sustainability strategy.
You determine the current state of your company using a status quo analysis.
This is your first data collection in the ESG area, so to speak, and should therefore be carried out thoroughly.
The data and information form the basis for your future sustainability efforts.
These topics, among others, play a role in determining the status quo:

Wichtige Fragen, um den Status quo Ihres Unternehmens im Bereich Nachhaltigkeit zu ermitteln, und wo Sie die Antworten finden.

The first time, the status quo analysis usually involves a great deal of effort.
Numerous departments have to be involved.
In some cases, the data is not available in the required form or has not yet been collected.
The VERSO ESG Hub simplifies and optimizes data management, as it is aligned with the ESG requirements of standards such as ESRS, GRI and DNK.
The analysis of the current status serves as the basis for the following materiality analysis.
Here you determine which sustainability issues are most important and where the greatest impacts, risks and opportunities (IRO) lie.
If you publish a sustainability report in accordance with CSRD, you must carry out a double materiality analysis here.
A simple materiality analysis is also sufficient for a DNK report.
Both procedures involve a certain amount of effort – the VERSO Sustainability Experts are therefore available to support you.
The results of the materiality analysis are your fields of action and the specific IROs.

Activate the complete ESRS checklist here

What do companies have to report in accordance with the ESRS?
Once the overarching topics have been determined with the double materiality analysis, you can decide individually whether individual disclosure requirements and data points are relevant.
This checklist will help you with this.

2. define SMART objectives and suitable measures

Based on the key topics, you define targets and KPIs for monitoring as well as suitable measures to achieve the targets set.
You are at the center, so to speak, when you develop a sustainability strategy.
When defining objectives, rely on science-based support.
For example, use the GHG Protocol (Greenhouse Gas Protocol) or projects within the framework of the Paris Climate Agreement as a guide.
You can find industry-specific assistance from the Science Based Targets Initiative (SBTi), for example.
Make sure that you set yourself SMART targets.
This method originates from project management.
SMART is the acronym for Specific, Measurable, Achievable, Reasonable, Time-bound.

Setzen Sie sich SMARTe Ziele. SMART steht für spezifisch, messbar, angemessen, realistisch und terminiert.

The goals in the area of sustainability should not be detached from the corporate goals.
Otherwise, conflicts of objectives can quickly arise.
Instead, it is a good idea to integrate your ESG goals into the overall strategy.
After the objectives, the headache continues – now it’s a question of what measures you want to use to achieve these objectives.
Involve your employees, but also other stakeholders and experts.
They are more likely to recognize solutions as they are more directly affected by the problems.
Be aware that not all measures can be implemented company-wide.
For some, it makes sense to implement them throughout the entire company.
However, other measures are more specific and are only suitable for a particular department.
You should formulate such measures directly with the employees concerned.  

3. create an awareness of sustainability throughout the company

Sustainability is a company-wide team project.
All departments are needed, for example, to implement measures, define new targets and provide data for ESG reporting.
For this reason, it is also important to create a shared awareness of sustainability.
The best time to build this is when you are developing your sustainability strategy.
With a vision and mission for the sustainability area, you can give the topic the necessary importance.
These questions will help you to develop a meaningful statement that evokes emotions and motivates your employees:

  • What is our vision of the future?
  • What do we want to achieve as a company?
  • What future do we see for our company?
  • What values do we have as a company?

To give sustainability the importance it deserves in your company, you should not see it as a separate strategy.
Instead, integrate the topic into the overall strategy.
This will allow you to anchor the ambition to lead your company into a more sustainable future in all areas and processes of the company.
And very importantly: talk about your company’s ambitions.
Get everyone on board.
Communicate the vision and mission.
Explain what drives you and what you want to achieve.
This will create a shared awareness of sustainability.

Your overview of the new Green Claims Directive

New obligations for all those who advertise with terms such as “climate neutral”: The Anti-Greenwashing Directive sets barriers.
What you should know now.

4. it’s time for implementation: control is the be-all and end-all

The development of your sustainability strategy is complete – now it’s time to implement it.
You should see ESG management as a process.
It will take many years until you achieve your medium and long-term goals.
You need to take a long breath.
You will probably even have to adjust your measures and targets as new findings and developments (regulations, products, business models) emerge over time.
By constantly reviewing and measuring your measures using suitable KPIs, you can keep control of your progress and the entire process at all times.
Deviations from the target become apparent at an early stage and you can make adjustments.
A tool such as the VERSO ESG Hub is also ideally suited to this challenge and simplifies your sustainability management enormously.
Transparency is also an important factor during implementation in order to further increase awareness of sustainability among stakeholders and employees in particular.
Motivation is quickly diminished if you are only involved at the start but then hear nothing more about the topic.
It is therefore also important to talk openly about the results to date – both negative and positive.
This promotes trust and understanding, increases motivation and facilitates collaboration.  

Develop a sustainability strategy: VERSO supports you!

VERSO supports you with expertise and software in the strategic implementation of sustainability in your company.
Our VERSO Sustainability Experts will accompany you throughout the entire process – from stocktaking and materiality analysis to sustainability management and reporting.
The VERSO ESG Hub offers you a comprehensive solution for holistic sustainability management.
And if you want to acquire further knowledge, you can attend training courses at the VERSO Academy.
This allows you to implement your sustainability strategy independently – but still receive reliable support.
Does that sound like what you’re looking for?
Feel free to contact us for more information.  

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

Subscribe to our newsletter!

Sign up and receive regular news about:

  • Pragmatic all-in-one solution for ESG reporting, climate and supply chain management
  • Individual advice from the VERSO experts
  • Developed with expertise from 12+ years of sustainability management
  • Trusted by 250+ customers

Get to know the software!

LKW auf einer Landstraße als Symbolbild für die Lieferkette
28.03.2024

Why is climate protection relevant in the supply chain?

In this blog post, we take a look at why climate protection is also a high priority in the supply chain from two perspectives. You will also find specific tips for decarbonizing your supply chain.

LkSG and CSDDD – when you hear these terms, the first thing that comes to mind is human rights due diligence in the supply chain, such as fair working conditions and protection against slavery.
Climate protection?
Perhaps only a second thought.
However, it should definitely not be neglected in the sustainable transformation of supply chains.
After all, this is where the majority of a company’s emissions are generated.
And that has consequences.
In this blog post, we take a look at why climate protection in the supply chain is also a high priority from two perspectives.
You will also find specific tips for decarbonizing your supply chain.

Climate protection in the supply chain – because it is required by law

The first reason is quite banal: Climate protection must be taken into account because it is quite simply imposed on certain companies by law.
The basis for current sustainability legislation is the Paris Climate Agreement.
With this agreement, almost 200 countries have committed themselves to the global 1.5° target and the reduction of emissions, among other things.
The Paris Climate Agreement is the basis for the European Green Deal a strategy with which the EU aims to become climate-neutral by 2050.
A whole range of strategies have been planned for its implementation.
The most important of these for purchasing are the German Climate Protection Act (GHG neutrality by 2045), the EUDR (deforestation-free supply chains), the CSDDD (EU supply chain law) and the CSRD (sustainability reporting).
Added to this is the “Fit for 55”-package, which aims to reduce net greenhouse gas emissions in the EU by 55% by 2030. This results, among other things, in the CBAM (CO2 tax) and a reform of EU emissions trading. In addition, Germany has introduced the LkSG which was developed on the basis of the National Action Plan for Business and Human Rights.

Darstellung: Auf dem Pariser Klimaabkommen bauen die meisten der aktuellen Nachhaltigkeitsgesetze und -regularien auf

All of these guidelines directly and indirectly oblige companies to prioritize climate protection in their supply chains.
For example, the CSDDD draft paper – in relation to the CSRD climate obligations – explicitly requires “that the company’s business model and strategy are compatible with the transition to a sustainable economy and with limiting global warming to 1.5 °C in accordance with the Paris Agreement and the goal of climate neutrality in accordance with [dem EU-Klimagesetz], including [der Ziele] for climate neutrality […].”(CSDDD draft of 15.3.2024 , Art. 15) So much for the dry legal perspective.
However, as we already wrote in the ESG Briefing, we at VERSO are convinced that anyone who does not take a holistic approach to the topic of sustainability strategy will only end up with bureaucratic red tape without any added value as a result of the requirements. So let’s take a look at why climate protection in the supply chain is incredibly important, even beyond legal obligations!

Climate protection in the supply chain – because it makes companies future-proof

Climate change poses risks for supply chains

The supply chain is the backbone of every company.
But it is also one of the biggest sources of greenhouse gas emissions.
Depending on the industry, up to 80% of a company’s total emissions are generated here alone.
By now, everyone should be aware that greenhouse gas emissions – especially CO2 – fuel climate change.
And this has consequences for the supply chain.
Because with global warming, storms, heavy rain, floods, but also heatwaves with droughts and fires are becoming more frequent worldwide.
These extreme weather events can damage, block or completely destroy production facilities and transport routes.
This results in delivery delays and production and harvest failures with considerable financial losses and frustration among customers.
On the other hand, there is the growing global demand for raw materials of all kinds. This is not just about rare earths or important metals, but also about very basic things such as drinking water and food.
And where resources become scarce, conflicts, tensions or even wars are not long in coming.
It is clear as daylight that this is a real problem for the local people on the one hand, but also for your supply chain on the other.
It is therefore in the interests of procurement to help curb climate change with climate protection measures along the supply chain.

Supply chain resilience with VERSO

Gain transparency, reduce dependencies, keep an eye on current crises: Find out how you can strengthen your supply chain with the VERSO Supply Chain Hub!

Customers and consumers demand sustainability

Sustainability – and therefore also climate protection – is becoming increasingly important for investors, customers and consumers when making purchasing decisions: 79% of consumers surveyed in a Capgemini study stated that they are changing their purchasing behavior in the interests of sustainability.
66% even responded that they specifically look for environmental friendliness when selecting products and services.
Sustainable, climate-friendly products are therefore a) becoming a competitive advantage.
But be careful: If it says climate protection on the label, it must really contain climate protection!
With the Green Claims Directive, false or vague environmental claims (greenwashing) lead to expensive fines.
Not to mention the loss of reputation for your company.
And even if the CSDDD no longer directly affects SMEs and companies can no longer simply pass on their due diligence obligations to their suppliers: The Business Development Bank of Canada found that 92% of large companies will demand clear ESG information from their suppliers.
ESG commitment is therefore also b) becoming a decision criterion when awarding contracts.

Measures for climate protection in the supply chain

In summary, we can therefore state the following: On the one hand, climate protection in the supply chain is a must because it is simply required by law in various forms.
At the same time, however, it also presents opportunities!
If you start decarbonizing your supply chain now, you will make it more resilient to climate change risks and their effects.
At the same time, you will meet the growing sustainability demands of customers and consumers.
And you protect yourself against rising costs, such as those associated with the carbon pricing that the CBAM places on imports.
The challenges associated with the sustainable transformation of the supply chain are therefore more than worth it.
Don’t you agree?
Last but not least, only one question remains: What does climate protection in the supply chain mean in practice?
You can find specific tips on reducing emissions in the supply chain in our article “Decarbonizing the supply chain: How companies can achieve their climate targets along the supply chain”.
Read on now!  

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

Subscribe to our newsletter!

Sign up and receive regular news about:

  • Pragmatic all-in-one solution for ESG reporting, climate and supply chain management
  • Individual advice from the VERSO experts
  • Developed with expertise from 12+ years of sustainability management
  • Trusted by 250+ customers

Get to know the software!

Eine Nachhaltigkeitsstrategie ist für Unternehmen wichtig, um ihre ESG-Ziele zu erreichen
11.03.2024

5 reasons why a sustainability strategy is important for companies

A corporate strategy is a matter of course for many companies. It serves to manage the most important opportunities and risks in relation to the business model. The sustainability strategy is an extension, so to speak, with a focus on ESG issues. It is necessary in order to position your company for the future. In this blog post, we explain the specific benefits of a sustainability strategy.

To get started: What does a sustainability strategy say?

A sustainability strategy is the roadmap for the sustainable transformation of your company.
It defines how you deal with relevant ESG issues – in other words, a plan for the key aspects in the areas of environmental, social and governance.
However, the strategy not only relates to your company itself, but also to environmental and social impacts within the supply chain or even across the entire value chain.
The roadmap contains

  • key opportunities and fields of action,
  • medium and long-term goals that your company has set itself, and
  • above all, an implementation plan with effective measures.

You can identify the most important areas for action with the help of a materiality analysis.
The EU CSRD Directive with its European reporting standards ESRS requires an analysis based on double materiality.
In doing so, you identify relevant topics for your company – from two perspectives: how do sustainability aspects influence your company and how does your company affect the environment and society.
If you involve your stakeholders in the process, you will gain valuable input and create greater acceptance in advance for subsequent decisions.
The double materiality analysis helps you to focus on the key issues with the greatest leverage and not get bogged down in the minutiae.
You define suitable goals and effective measures for the relevant fields of action.
Measurable KPIs also ensure that your progress is monitored.
You should take a scientifically sound approach when developing your goals.
This means, for example, that you should base your climate targets on the GHG Protocol (Greenhouse Gas Protocol) and the 1.5 degree target.

Whitepaper: The ESRS at a glance

The CSRD introduced new standards for sustainability reports.
Find out everything you need to know about the European Sustainability Reporting Standards (ESRS) in the white paper.

Sustainability strategy: 5 advantages for companies

The importance of a sustainability strategy is shown by the results of the Bertelsmann Stiftung’s Sustainability Transformation Monitor 2024.
In the study, around 54% of companies stated that sustainability is part of their general corporate strategy.
Around 26 percent have a separate sustainability strategy.
But let’s now look at the specific benefits:  

1. effective risk management and greater resilience

We are in a time of change.
Climate protection, digitalization, new work, diversity and new technologies such as artificial intelligence are just a few of the current megatrends.
The future is coming in leaps and bounds and will bring numerous changes with it.
A sustainability strategy ensures that you are aware of potential environmental and social risks for your company.
This is where risk management comes into play, which is part of the double materiality analysis mentioned above.
Many companies already have a risk management system – but this usually only includes a small proportion of ESG issues, which are also only assessed from a financial perspective.
This is now being supplemented by a holistic ESG perspective and, in contrast to the established system, opportunities are also given greater weight.
You identify and assess potential risks, draw up a plan to avoid or reduce risks and monitor your measures as part of ESG management.
This allows you to react more agilely and flexibly to issues such as climate change, political developments, fair working conditions or resource scarcity.
You also have the opportunity to proactively minimize risks and their impact.
You should not only think about risks that directly affect your company, but also about the entire value chain.
Effective risk management therefore contributes to cost savings and protection against unexpected losses.
This goes hand in hand with greater resilience and future viability of your company.
It also pays to be able to demonstrate risk management with a view to ESG issues and a sustainability strategy when granting loans.
Banks regularly ask for both as part of their lending decisions – you can find more information on this in our blog post“ESG in financing: this data decides on loans”.

5 Sustainability measures with impact

A company’s sustainability strategy depends, among other things, on the planned measures and their efficiency.
We have put together five exemplary projects that achieve the desired effect.

2. efficient use of resources and employees

Based on risk and opportunity management, you can improve the use of resources in your company.
Sustainability management promotes the optimization of processes and the development of new technologies and innovations.
This can result in the careful handling and more efficient use of resources.
Examples More efficient machines reduce energy consumption; recycling production waste reduces the need for raw materials.
Regardless of whether the end result is a reduction in waste or energy consumption or whether resources are used more efficiently – good ESG management can save you money.
Another point that speaks for a higher sustainability of your company.
However, you can not only optimize the use of resources, but also improve your time management and that of your colleagues.
By focusing on the key issues, you have more time to drive these tasks forward.  

3. holistic orientation and long-term planning

If you only introduce individual, unrelated measures, you often fail to see the big picture.
A sustainability strategy provides a remedy here and ensures a holistic view.
This means that no separate initiatives are launched, but each individual measure is an essential part of an overarching strategy.
You identify the most important topics with the double materiality analysis mentioned above.
They are then incorporated into your sustainability strategy, which enables long-term planning as well as systematic work and communication.
You can view your progress in CSRD-compliant software, such as our ESG Hub, where you can collect and monitor all data.
In the best case scenario, the sustainability strategy does not stand alone, but is integrated into the corporate strategy.
This allows you to emphasize the central importance of sustainability.
In addition, management is actively involved in the topic.

The double materiality analysis in 7 steps

Companies affected by the CSRD must identify relevant topics for their sustainability report with a double materiality analysis.
We explain how to get there step by step.

4. meet the requirements of standards such as ESRS

Many companies will also urgently need to develop an ESG strategy in the future as part of CSRD reporting – and in contrast to most existing frameworks, this will be much more intensive.
The European ESRS standards explicitly require a sustainability strategy for all material topics.
The German Sustainability Code (DNK) also addresses the sustainability strategy in its Criterion 1 – but nowhere near as in-depth as the ESRS.
The DNK requires companies to state whether they are strategically addressing the issue of sustainability or whether only individual measures have been implemented to date.
The GRI standards of the Global Reporting Initiative do not directly ask for a strategy.
However, some sections deal with the deeper anchoring of sustainability in the company.
The sustainability strategy also provides a lot of information that is needed when preparing a sustainability report.  

5. targeted communication of ESG issues

You have drawn up your sustainability strategy.
The first measures are underway and you can even see the first signs of progress.
Then you should also talk about it – for example in a sustainability report.
Read our blog posts to find out how to communicate sustainability on your own website and avoid the five biggest greenwashing traps.
As with the implementation of measures, the sustainability strategy ensures that you keep an eye on the big picture.
You focus on key topics with an impact that are also related to your core business.
The purchase of a single electric car in a vehicle fleet with hundreds of diesel cars will probably attract more criticism than praise.
As your communicated topics are placed in a larger context by the overarching strategy, they also carry more weight.
You present a consistent image to the outside world, increase your reputation and brand value, attract talent on the job market and retain or acquire customers.

Step-by-step to the sustainability report

A meaningful sustainability report can be quite a challenge.
Where do you start?
What data is important?
And how should the ESG report be published?
Our practice-oriented playbook answers your questions.

Conclusion: A sustainability strategy is worthwhile for companies

ESG issues are often already part of a company’s strategy and risk management without being explicitly named.
A sustainability strategy now focuses on these areas of action.
It expands the existing strategy to include a holistic ESG perspective and also highlights opportunities.
The aim here is to position the company for the future and therefore to address relevant risks and opportunities or the greatest impact in a holistic manner.
A sustainability strategy is therefore definitely worthwhile.
Not only because it is required as part of CSRD reporting.
Your company can also use it to achieve and maintain competitive advantages.
With your ESG management, you can differentiate yourself from your competitors and increase your chances of winning tenders and loans, for example, where sustainability data is also requested.
You also improve your image, which leads to greater customer loyalty and attracts young applicants who also choose their future employer based on social and environmental aspects.
Do you and your company want to benefit from the advantages of a sustainability strategy?
VERSO Sustainability Consultants will provide you with pragmatic and effective support in designing a roadmap for the sustainable transformation of your company.
Together, we will put your company on the path to a more sustainable future – from strategy to implementation.  

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.

We support you!

Do you want to develop a sustainability strategy for your company or update your existing one?
The VERSO Sustainability Consultants will support you.

Subscribe to our newsletter!

Sign up and receive regular news about:

  • Pragmatic all-in-one solution for ESG reporting, climate and supply chain management
  • Individual advice from the VERSO experts
  • Developed with expertise from 12+ years of sustainability management
  • Trusted by 250+ customers

Get to know the software!