The role of directors in sustainability as a business model transformation
As stakeholder demand, investor requests, and regulatory requirements continue to intensify, sustainability is no longer just a project or a series of initiatives; it’s a strategic imperative.
For boards and directors, this shift signals a need for transformation not just in how companies operate, but in how they think about their business models. The rise of environmental, social and governance (ESG) considerations means that sustainability must be embedded at the heart of corporate strategy, influencing decision-making at every level.
The role of directors, then, is pivotal in guiding their organisations through this transformation, ensuring sustainability drives long-term value and resilience.
Through our work at &BLOOM, we’ve found that directors can play a transformative role in this journey by focusing on three key actions: embedding sustainability into the business strategy, decentralising ownership and making ESG a regular agenda item at board meetings with a clear framework for discussion.
These steps help ensure sustainability becomes an integral part of the business model, driving both innovation and responsible growth.
Sustainability must be a foundational component of the company’s strategic framework, influencing all aspects of operations. Directors should ensure that sustainability is deeply aligned with long-term business objectives, guiding resource allocation and decision-making processes. This integration involves turning sustainability targets into clear, actionable objectives, ensuring that the company can track and measure progress effectively.
By embedding sustainability into the company’s core strategy, directors create a platform for innovation and value creation that positions the business for success in a rapidly evolving market.
To achieve impactful sustainability, directors need to decentralise responsibility across all levels of the organisation. This includes empowering various business units – such as product development, supply chain and customer engagement – to take ownership of sustainability goals.
By decentralising, sustainability is not confined to one team or function but becomes embedded within every department’s daily activities. A clear governance structure that holds teams accountable for their role in sustainability ensures that these efforts are coordinated, with flexibility for experimentation and innovation. This decentralisation transforms sustainability from a top-down directive into an organisational culture that drives change at all levels.
Make ESG a standing item on the board agenda
For sustainability to truly be embedded into the company’s strategy, it must be regularly discussed at the board level. Directors need to make ESG a standing item on the agenda, ensuring that sustainability is not just a topic raised during annual reviews or in response to regulatory pressures.
This means adopting a structured framework for ESG discussions, which includes tracking progress, addressing challenges and identifying new opportunities. By keeping ESG front and centre at every board meeting, directors can ensure that sustainability remains a key priority and that decisions align with long-term goals.
In conclusion, directors have a critical role to play in ensuring that sustainability is not just a passing trend, but a core part of the business model. Embedding sustainability into the strategy, making ESG a standing agenda item and decentralising ownership are key steps in ensuring that sustainability becomes a true business model transformation, not just a set of good intentions.
