Since the current COVID-19 pandemic, the recognition and evaluation of sustainability have taken a much higher place in the boardrooms of our larger organisations. Much of this initial focus will improve the reporting around the ESG goals and establish their own performance in more confident ways. I would argue these are the basic building blocks of a fundamental change, recognizing that sustainability will become the core of the future business design.

As we have embraced digital change, much of the business landscape has shifted. Business is being more informed through the data and analysis it undertakes; it has relearned how to react in sustaining crisis (dealing with the pandemic) and validated different aspects of its business, recognizing it can function very differently. The ability to manage and support remote workers, dealing with an ongoing business outside the office environment, be remote in servicing customers digitally, and provide solutions through connected enterprises’ design have each changed perception and the realization that we can sustain and still grow in more collaborative, open ways.

Sustainability is rising to be top or close to the top of a boards agenda. The growing concerns of several intertwined issues that are needing significant recalibrating. 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 and what we can do to reduce these pressures?

There are growing impact points that are harder to separate. 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.

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. That 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.

The focus is on undertaking and shaping a new core through four focus points; a new set of strategic choices, evaluating both product and operation reinvention, and fourthly, re-evaluating your innovative partnerships within a new Sustainability ecosystem design.

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. For thinking about sustainability pathways having different scenario plans are essential for the business to manage this pathway, navigating in increased uncertainty, challenge and complexity and become the dynamic strategic document for moving towards a sustainable future.

I wrote an article on the Art of Back Casting that needs care earlier this year. In this post, I was suggesting; backcasting is not concerned with predicting the future but with how the desirable futures can be attained in this future working back approach. So In this energy future, the consistent moving towards a desirable position for the planet, people and prosperity from only using clean energy, having fully decarbonised plants and supply chains, managing more efficiently and reducing waste. So for knowing the future we need to achieve, we move back to achieving it over a given period.

“The concept of “backcasting” is central to a strategic approach for sustainable development. It is a way of planning in which a successful outcome is imagined in the future, followed by the question: “what do we need to do today to reach that successful outcome?”

The Three Horizon Methodology can help tackle complex problems and draw out the future intent on sustainability; in its planning, resource allocations and skill gap identification to build capabilities and capacities to be ‘future-ready. We need to map the sustainability pathway across the three horizons. The value of the 3H has been one of my primary areas of focus for my innovation and change work for many years. It has a contributing value to any sustainability thinking. An example of explaining this might be worth the click: “Navigating of the three horizons framework- an emerging guide.”

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

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. To extract precious, rare earth minerals and recycle parts reduces the demand for future mining or heat intensive materials.

Any products need to have a clear understanding of all their stages for the clarity of sustainability. 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.

Operations have been progressively transformed due to digital advances. Connecting plants, devices, machines have revolutionalized 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, concerned for people and providing prosperity to those involved.

Driving behaviour change towards a sustainable culture is paramount.

The nature of behaviour 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 behaviours?

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 “Sustainable 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 need, 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.

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.