Corporate Sustainability in Practice: A Guide for Strategy Development and Implementation

Preface
Acknowledgements
Contents
Editors and Contributors
Corporate Sustainability: The Big Picture
1 How Environmental and Social Issues Affect Business Strategy
	Abstract
	1.1 Introduction
		1.1.1 The Impact of a Changing Climate on Business
		1.1.2 The Impact of a Growing Population on Business
		1.1.3 The Impact of Wealth Disparity on Business
	1.2 Conclusions
	References
2 The Sustainable Development Goals: A Framework for Business
	Abstract
	2.1 Introduction
	2.2 Setting the Scene: How a New Universal Agenda for Sustainable Development Came to Light
	2.3 Where Are We on Our Journey of Delivering the SDGs? a Sustained Call for Transformation
	2.4 Embracing Complexity, Diversity and Connectivity: The Need for Systems Thinking and Multi-stakeholder Partnerships
	2.5 Creating a Shared Vision for Cross-Sector Collaboration Effectiveness: How to Reconcile Conflicting Values and Interests
	2.6 Working Towards the Global Goals: Multi-stakeholder Partnerships in Practice
	2.7 How Can Business Can Best Contribute to Systems Change: Towards a Strategic Alignment of Business and Social Goals
	2.8 Conclusions
	References
3 Thinking in Systems: The Long-Term Impacts of Short-Term Business growth
	Abstract
	3.1 Introduction
	3.2 System Thinking and Complexity
	3.3 Short-Term and the Long-Term Exponential Dynamics of Growth
	3.4 The Exponential Dynamics of Material Growth Is Non-sustainable in a Finite World
	3.5 The Drivers of Economic Growth and Constraints to a Non-growing Economy
		3.5.1 Debt Money System
		3.5.2 Financial Markets and Pension Funds Require Growth
		3.5.3 Productivity and Technology Growth
		3.5.4 Projections for Population Growth by Region
	3.6 Ecosystem Negative Feedback on Economic Growth
		3.6.1 Energy
		3.6.2 Agriculture
		3.6.3 Climate
		3.6.4 Planetary Boundaries
	3.7 Current State of the Energy Transition
	3.8 Sustainable Development Goals and Growth
	3.9 What Should a Corporate Do for Running a Sustainable Business Today?
	References
The Business Case for Corporate Sustainability
4 A Modern Definition of Corporate Sustainability
	Abstract
	4.1 Introduction
		4.1.1 The Rise of Corporate Social Responsibility (1950–1990)
		4.1.2 Corporate Social Responsibility in the 1990s and the Triple Bottom Line Concept
		4.1.3 The Building Blocks of Corporate Sustainability
			4.1.3.1 Environmental, Social and Governance (ESG)
			4.1.3.2 The Concept of Creating Shared Value
			4.1.3.3 A Sense of Purpose in Business
		4.1.4 Defining Sustainable Value and ‘Modern’ Corporate Sustainability
	4.2 Conclusions
	References
5 Sustainability Facts
	Abstract
	5.1 Introduction
	5.2 The State of Sustainable Business 2018, 2019—Globescan
	5.3 CEO Study on Sustainability 2019—Accenture
	5.4 Sustainability’s Deepening Imprint 2017—McKinsey & Company
	5.5 Conclusions
	References
6 The Link Between Sustainability Investing and Financial Returns: An Asset Management’s Perspective
	Abstract
	6.1 Introduction
	6.2 Drivers of ESG Adoption in the Asset Management Industry
	6.3 What is ESG Investing? It is all in the Definition
		6.3.1 Align with Personal Beliefs (Values Investing)
		6.3.2 Using ESG to Improve Financial Performance (ESG Integration)
		6.3.3 Creating a Positive Social Impact (Impact Investing)
	6.4 Importance of ESG Data––Data Quality and Materiality
		6.4.1 Data Quality
		6.4.2 Data Materiality
	6.5 The Link Between ESG and Financial Performance
		6.5.1 Values Investing: A Word on ‘Sin Stocks’
		6.5.2 ESG Integration
			6.5.2.1 Targeting Companies with a Good ESG Profile
			6.5.2.2 Targeting Companies with an Improving ESG Profile
			6.5.2.3 Corporate Engagement and Shareholder Activism
		6.5.3 Impact Investing
	6.6 ESG Investing in an Asset Allocation Context
	References
7 Sustainable Finance––Integrating Sustainability into Corporate Banking
	Abstract
	7.1 Introduction
	7.2 The “Do not” Paradigm––“Excluding” Specific Types of Activities
		7.2.1 A New Stream of “Excluding” Policies, to Act Against Climate Change
	7.3 Solutions to Promote Financial Inclusion
	7.4 The Risk Management Perspective
		7.4.1 Climate Change Risks and the TCFD
		7.4.2 Beyond Climate Change, the ESG Framework
		7.4.3 The Equator Principles for Project Finance
	7.5 Embedding ESG and Impact Lens into the Credit Value Chain––A Positive Approach to Sustainable Lending
	7.6 Conclusions––Three Enabling Factors
		7.6.1 Data Availability
		7.6.2 Training and Divulgation
		7.6.3 Governance and CEO Commitment
	References
Definition and Execution of Sustainable Strategies
8 Business’ Role in a Changing Society. Key Steps to Deliver a Purpose-Led Strategy that Responds to Climate Change and Social Inequality
	Abstract
	8.1 Introduction
	8.2 An Explosion of Challenges
		8.2.1 The Prominent Challenge of Climate Change
		8.2.2 Leaving no One Behind
		8.2.3 Changes in Societal Norms
		8.2.4 Expectations on Business Have Never Been Greater
	8.3 Preparing for Change
		8.3.1 Empowering Employees to Help Design and Deliver Strategic Change
	8.4 Standing up for Change
		8.4.1 Advocacy and Integrity—A Way to Earn Trust
	8.5 Delivering Change Over the Next Decade
		8.5.1 Business Role in Society and Adopting a Broader Stakeholder Purpose
		8.5.2 Nurturing Sustainability Competence
		8.5.3 Mobilising Collaborative Innovation Around a Common Purpose
	8.6 Conclusion
	References
9 How to Approach the Development of a Corporate Sustainability Strategy
	Abstract
	9.1 Introduction
	9.2 Pre-work: Capture the Core Business Strategy
		9.2.1 Establish the Organisation’s Sustainability Profile and Approach to Corporate Sustainability
	9.3 Why
		9.3.1 Conduct Stakeholder and Industry Analysis
			9.3.1.1 Customers and Users
			9.3.1.2 Competitors
			9.3.1.3 Suppliers and Business Partners
			9.3.1.4 Government
			9.3.1.5 Society
			9.3.1.6 Employees
			9.3.1.7 Owners and Shareholders
			9.3.1.8 Investors
		9.3.2 Build the Business Case
			9.3.2.1 The Potential Risk of not Engaging More with Sustainability
			9.3.2.2 What Are the Opportunities of Engaging More with Sustainability?
	9.4 What
		9.4.1 Defining the Ambition
		9.4.2 Identify a Framework to Structure the Strategy
		9.4.3 Create Strategic Pillars
		9.4.4 Conduct a Materiality Assessment
		9.4.5 Design Sustainability Initiatives
	9.5 How
		9.5.1 Change Management: How to Successfully Embed Sustainability Within the Organisation
		9.5.2 Measurement and Reporting
		9.5.3 Recognition and Reward
		9.5.4 Marketing and Branding
		9.5.5 Resource and Organisation
		9.5.6 Short-Term Versus Long-Term Outlook
	References
10 Sustainability Transformations—From Theory to Practice
	Abstract
	10.1 Introduction
	10.2 Sustainability and Organisations: An Evolving Relationship
		10.2.1 Context
		10.2.2 What Is Sustainability?
		10.2.3 From Corporate Social Responsibility to Corporate Sustainability
	10.3 Becoming a Sustainable Organisation
		10.3.1 Framing Change
		10.3.2 Why Change—Sustainability Change Drivers
		10.3.3 Sustainability Transformation Journeys
	10.4 Sustainability Strategy as Business Strategy
	10.5 Realigning Structure to Deliver Strategy
	10.6 Creating a Sustainability Culture
	10.7 Implementing Sustainability Through Systems
	10.8 Developing Sustainability Skills and Capabilities
	10.9 Challenges
	10.10 Conclusion
	References
11 The Evolution of Sustainability Reporting: Integrated Reporting and Sustainable Development Challenges
	Abstract
	11.1 Introduction
	11.2 Toward Sustainability Reporting
		11.2.1 A Historical Perspective
		11.2.2 Defining Sustainability and Sustainability Reporting
	11.3 The State of the Art
		11.3.1 Integrated Reporting
		11.3.2 Integrated Reporting and Sustainable Development Goals
	11.4 Final Remarks
	References
12 Sustainable Supply Chain Management
	Abstract
	12.1 Introduction
	12.2 The Evolution of Sustainable Supply Chain Management
	12.3 SSCM Strategies and Governance Mechanisms
		12.3.1 The Role of Collaboration
		12.3.2 The Role of Formalization
	12.4 Sustainability Leaders
	12.5 The Case of Barilla
		12.5.1 Barilla’s Corporate Sustainability Strategy
		12.5.2 Implementation of Sustainability Strategy: Durum Wheat Supply Chain Contracts
		12.5.3 Supply Chain Contract Structure, Objective and Elements of Collaboration
		12.5.4 A Formalized Approach: The Contracting Process
	References
Index