ERM - Catching the wave of sustainability transformation

The sustainability transformation is accelerating as many multinational companies recognize its strategic importance. Companies are assessing operational risks and seizing commercial opportunities, with long-term goals to reach net zero, become nature-positive, and improve social outcomes. However, short-term actions often fall short, and companies struggle to envision the new markets this transformation will bring.

WBCSD and ERM conducted a dialogue to understand what hinders companies and identify practical steps for immediate, decisive action aligned with long-term sustainability goals and market success. This involved interviews and engagements with over 130 global business executives and sustainability experts to identify what needs to be unlocked within business operations and senior leaders' mindsets to drive change. In "Catching the Wave," they present findings and actions to help companies navigate and accelerate the sustainability transformation.

1. Multiple Truths: Companies must navigate the sustainability transformation by acknowledging multiple truths. The threat of social and environmental crises is real, but solutions are advancing exponentially. Companies tempted to downplay the scale of this shift must recognize and embrace it to win. Understanding simultaneous truths helps in seizing opportunities and managing risks.

2. Internal Barriers: Companies must address internal barriers, focusing on short-term focus, the sustainability-as-a-cost mindset, and gaps in sustainability skills and awareness. External barriers should not excuse inaction. Addressing internal hurdles enhances companies' effectiveness in pushing and seeking collaborations to overcome persistent external barriers.

3. Disruption Waves: Companies should neither underestimate nor be overwhelmed by the waves of disruption the sustainability shift brings. Systemic transformations, though tough to navigate, follow similar patterns. The digital transformation is a prime example; companies that embraced it and innovated came out stronger. The sustainability transformation will similarly favor proactive companies.

4. Learning on the Go: All companies are learning as they go with sustainability; no off-the-shelf blueprint exists. However, by studying companies that have partially integrated sustainability and navigated systemic upheavals, an approach to unlock action and commercial value emerges. "Catching the Wave" outlines this framework, reflecting practical knowledge and experiences, and explains how to achieve commercial success, operational efficiency, and resilience.

5. Framework Application: The sustainability transformation framework offers various entry points and works across whole companies and value chains. It helps solve issues in strategy development, guides integration and marketing decisions, and identifies opportunities to manage people better and improve collaboration with suppliers and peers.

More information and full report can be found at Catching the wave - Seizing the opportunities of sustainability transformation