Sustainability is near the very top or close to the top of any forward-looking board’s agenda. The board is recognizing the growing concerns of several “intertwined issues” that are needing significant recalibrating and is forcing them to think beyond asking “how can we thrive and survive, into how can we build a sustainable pathway for value, growth and impact?”.

Where does our business fit within and alongside society, both in who we serve and society in general, coupled with realising that the planet is heading towards a critical crisis. Today, we need to account for the impacts of heat, flooding, water shortages, health and food issues and what we can do to reduce these pressures? How can each of us make a contribution to becoming more sustainable?

There are growing impact points that are harder to separate, they are increasingly becoming intertwined. The economy for a business to function and be profitable, an environment that is climate and nature friendly and thirdly, the growing considerations for a broader range of people to serve, support or inform the social and corporate values come increasingly together.

We live in a connected world mutually dependent on nature, our environment, in sharing and valuing that we only thrive and survive if we collaborate and cooperate.

Sustainability is reshaping the core of business in four ways.

If the decision is made to become more focused on “being sustainable”, drastic shifts in direction will undoubtedly occur. The shift from that fear of being disrupted due to the digital transformation is being replaced by the need to build a sustainable company built on increasing insight and connected understanding, seeking and exploring, experimenting and confirming a new value equation.

The shift into a more future-focused position where sustainability becomes core will require a dedicated, focused, systematic need to assess the portfolio and the operating conditions. This goes way beyond the present “where to play and how to win”; this becomes as much for the long game as managing the short term.

We need to often completely rethink the present business model. I would argue all of today’s business models are in urgent need to be redesigned around ecosystem thinking and designs that are open, highly collaborative and responsive but equally geared to being sustainable for the long run.

I suggest, to start, four focal points to consider

The focus is on undertaking and shaping a new core through four focus points for sustainability;

1) redefining a new set of strategic choices,

2) evaluating both product and operation reinvention to reflect this strategic design,

3) re-evaluating your innovative partnerships within a new sustainability ecosystem design and finally

4) recognizing the length of time it will realistically take to achieve more sustainable value creation and the shift of all your resources to make this change.

If you don’t have the appetite to undergo this then recognize your business is already facing decline and will have less relevancy and customer identification and you will progressively be “frozen out” of a world of collaborators and relationships building a very different, more complex set of solutions to provide lasting value and impact.

Redefining new directions and strategic choices

To embrace sustainability, you embrace a new set of principles of governance that bring the planet, people and prosperity far more into the thinking.

What would that mean in the magnitude of change? How do you assess if your current business portfolio is sustainability proof of not just what is required or needed for today but also in the future? Different scenario thinking needs a constant mindset and evaluation.

The argument is to envision today going forward and the future working back for framing the different scenarios.

Each of these different approaches to framing future challenges requires different thinking. The two perspectives, predicting forward, working back, give insights into alternative positions and build out required milestones for the next 5,10, and 20 years can have very different outcomes.

The annual business plan has become increasingly adaptive to meet today’s operating conditions, this is not the point of future stakeholder value, it is the plan, openness and path you are taking to achieve a more sustainable business.

For thinking about sustainability pathways you will be in need of having different scenario plans and options in pursuit of your goals. Agility and adaptiveness will be key as essential for the business to manage this pathway, navigating increased uncertainty, challenge and complexity and becoming the dynamic strategic directional document for moving towards a sustainable future.

• I have built out in this link the thinking about sustainability from more of the innovation perspective here.

The challenge of reinvention and recycling.

Not just sustainability forces a sharper need for strategic choices but the ability to undertake the product reinvention. A reinvention that concerns itself with reducing waste, minimizing carbon emissions, valuing the full life cycle and the ability to show the increasingly important end-of-life part of the lifecycle model.

Any products need to have a clear understanding of all their stages of a product lifecycle for the clarity of sustainability, knowing your carbon footprint across all the stages from raw material to final delivery to customers and beyond is essential.

For instance, a clarification that the materials were sourced from green energy or sustainable sources to build, deliver and dispose of the product in this new truly sustainable economy approach is needed and will be valued as critical in future judgements.

Having a circular model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible is becoming critical

Operations have been progressively transformed due to digital advances. Connecting plants, devices, and machines have revolutionized the environment. Environmental standards, the treatment of employees, suppliers and the community where plants are situated all need reassessment.

Asking the four essential points of governance principles, supporting the planet’s health, being concerned for people and providing prosperity to those involved needs to be captured and translated within any sustainable plan.

Driving behavior change towards a sustainable culture is paramount.

The nature of behavior changes in collaborations, in working conditions, in health and safety concerns. The need for ongoing social and environmental risk screening becomes central to monitor and report upon constantly. How are you driving down power consumption, achieving net-positive impacts, and changing behaviors?

Strengthening and invigorating innovation partnerships.

The whole urgency of collaborating has grown and given the importance of managing through ecosystems and platforms where parties can manage and share. Developing the capabilities and competencies to address sustainability issues needs a new open, collaborative mindset.  The push for establishing robust sustainability ecosystems will be relevant within the new core to manage the business differently.

To embrace sustainability requires a no-holds-barred assessment of the present business and what is required in resources, shifts in strategic design and stakeholder dialogue. The journey does need a robust level of quantifying the disruption, for not just better-informed decisions, based on fact-based our best assumptions. Any journey like this needs to commit to moving forward, learning, pivoting where needed, recognizing what and why that has been seen and understood, and re-affirming the moving forward again in approaches.

The human challenge and seeing capital in broader senses

To become aware of sustainability at the core of business design, it needs developing groups of sustainability talent, more mission-driven, not just commercially focused. The importance of natural capital and social capital comes “alongside” financial considerations.

Sustainability is critically important. It needs this ecosystem and future innovating perspective as it is a combined effort, the gathering point that we all need to relate to and focus upon.

Firstly, the bigger picture of what you need to achieve must always be factored in to protect and support; firstly, appreciating natures capital, and secondly, constantly paying attention to our actions on the climate and decarbonization, I outlined some initial thoughts in this recent post, “Looking beyond ESG”.

Secondly, we need to achieve far better consistency in Sustainability reporting as many of the reports you work through are attractively presented but lack the real depth I feel this reporting needs. Thankfully there is a significant move towards a comprehensive corporate reporting system that integrates sustainability reporting with mainstream financial disclosures. I discuss this in a post that focuses on a business, building “Understanding Value Creation”.

Be careful of your core metrics- they liberate or constrain.

Shed your past mindset on measurements. Sustainability is not determining core metrics and disclosures that become set in stone. They can keep you strapped in a straight jacket of reinforcing metrics and not fully appreciating the materiality needed, searching for the information and insights that are important, relevant and /or critical to long-term value creation.

We need to recognize that “materiality” is a dynamic concept, meaning issues considered relevant to one aspect of focus can rapidly shift to different materiality.

Finally, embracing the world of intersections.

Realistically to achieve more sustainable value creation and the shift of all your resources to make this change.

I will come back to this more in future posts.

Sustainable value creation (the rationale for taking this journey) lies at the intersection of social and corporate value. That suggests that sustainability needs to be the new growth core; it embraces sustainability as a new direction of travel.

Are you gearing up for this sustainable journey and recognizing what it all means?