A new Maturity-based approach to sustainability planning for impact

Helle Bank Jorgensen & Alizabeth Calder

According to a survey of more than 2,000 US business leaders reported in WSJ, 71% of respondents have committed to a net-zero target, and a further 26% indicated that targets were under development (Companies Say Push to Decarbonize Comes From Their Own Boards, Yusuf Khan, WSJ PRO – February 26, 2024).  That’s encouraging news. 

In our conversations with board members, including both faculty and alumni of Competent Boards, a frequently asked question is how to engage with management for a fresh look at the sustainability strategy. Boards need to continuously reinforce the importance of having a clear and strategic focus to stay ahead of the curve.

Most industries are now seeing leaders emerge, so boards need to re-commit to understand both material risks and emerging opportunities to have an impact. While some investment leaders, like BlackRock, are pulling back on their commitments to climate action strategies,  other companies like Walmart and Verizon are embracing sustainability commitments, aiming not only for recognition as industry leaders but also to realize significant cost savings through more efficient operations and resource use.  Many organizations are thinking beyond the minimum they can do.  For example, Starbucks has committed to updating its café design for accessibility.  McDonald’s recently announced investments in new sustainable team uniforms made of tech fabric, which allows synthetic materials to biodegrade at similar rates to natural fibers, like wool. The new best practice is to think about sustainability maturity, where boards can appreciate progress that is being made on a progressive scale. The Sustainability Maturity ModelTM, as shown below, enables an evidence-based assessment of the organization’s ability to credibly deliver a measured impact.

By focusing on maturity development, as is done for cyber with the NIST framework, the organization can start small and develop maturity as it drives both engagement and commitment. 

Unlike a cyber maturity rating, sustainability maturity can be achieved based on a specific target area for impact.  For example, an organization can set a target to reduce waste and then build a roadmap to improve its maturity specifically around that target focus.  Achievement of an “Established” level of maturity in any defined objective is a major accomplishment and an appropriate target for most organizations.  Using the model to assess maturity sets the board up to understand the key areas of focus and to refresh their commitment to sustainability as a dimension of their governance work.

Small actions that are done with commitment will have an impact.  Key questions for Directors to ask management include:

  • How are our sustainability efforts aligned with our overall business strategy, and what steps are we taking to ensure that sustainability is a factor in all decision-making processes?
  • In what ways are we fostering partnerships and engaging with external stakeholders to enhance our sustainability impact, and how do these collaborations contribute to our thought leadership in this area?
  • What are the most significant sustainability risks and opportunities we face, and how are they integrated into our enterprise risk management and innovation processes?
  • Can we articulate the tangible business value, including financial performance, resulting from our sustainability initiatives, and how do we communicate this to our shareholders and other stakeholders?
  • What processes do we have in place to ensure that our sustainability strategy adapts to legislative changes, technological advancements, and shifts in consumer behavior?
  • How does our board remain informed and educated on sustainability matters, and how do we ensure that sustainability expertise is reflected in our board composition?
  • What metrics and goals have we established to track our progress in sustainability, and how often do we review and update our sustainability objectives?
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