June 12, 2023

Making the Internal Business Case for Sustainability

June 12, 2023

Making the Internal Business Case for Sustainability

June 12, 2023

Making the Internal Business Case for Sustainability

June 2023

Making the Internal Business Case for Sustainability

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Top pain points paralysing progress for today’s sustainability professionals:

Unlocking green finance requires significant and sustained internal buy-in. Today’s sustainability professionals are struggling to incentivise their organisations to lobby behind a sustainability strategy.

  • Strategising: When sustainability goals are perceived as conflicting with commercial goals.
    Knock on: difficult to compete for finance against other business priorities.
  • Tracking: When assumptive data doesn't reflect company-specific progress.
    Knock on: difficult to demonstrate progress to unlock future finance.
  • Communicating: When sustainability metrics are hard to understand.
    Knock on: difficult to get internal buy-in.

The 3-step process to drive internal buy-in

1. Start with the Why

Align with business goals to make sustainability business critical

  • Start with the business problem you want to solve and the upside value that you expect to see.
  • Bring the evidence: showcase the impact of sustainability in businesses similar to yours, highlighting the benefits to encourage internal adoption. Use an impact statistic (see page 7) to support your argument.
  • Demonstrate the Return on Sustainability Investment (ROSI): Identify and link sustainability success metrics to the main KPIs of the business. This helps align the interest of the sustainability team and the board.

E.g. Customer loyalty, increased pricing potential, cost savings, and strategic relationship building.

Key Financial Metrics to Track
  • Return on Sustainability Investment
  • Cost Savings
  • Revenue from Sustainable Products or Services
  • Risk Reduction
  • Environmental Productivity

The relevance of each metric will vary company to company due to different priorities, business models and operations.

2. Define the What

Anchor your impact challenges to your brand priorities

  • Choose where you want to win: identify areas that are closely aligned with your brand and anchor on those challenges. Prioritise 2-3 impact areas where you want to excel at and communicate where you simply want to meet expectations. E.g. packaging might be a critical brand anchor impact area for an F&B company to excel at but a ‘meet expectation only’ for a utility organisation.
  • Identify a mix of short-term and long-term projects that can be implemented with varying levels of investment and effort. Quick wins will demonstrate the value  and build momentum for longer-term projects.

E.g., Nestle has set a goal to achieve net zero emissions by 2050. To achieve this goal, Nestle has invested in short-term projects e.g., improving energy efficiency of factories through upgrades in lighting, heating and cooling systems, and equipment, and long term e.g., implementing renewable energy solutions, such as on-site solar and wind installations.

Brand Anchor Impacts: GHG Emissions, Energy Consumption, Water Consumption & Waste Generation

3. Implement the How
  • Place your bets whilst investing in your data. Decide where you will plan to test and deploy interventions. Your emissions data is almost certainly calculated using different assumptions to those of your peers. Internal year-to-year benchmarks on granularity, coverage, and value chain engagement can be more insightful.
  • Communicate Data Caveats: Clear data will not be available across the board, meaning some interventions will be a safer bet than others. Clearly communicate this from day one to build trust with stakeholders along the whole journey.

Investing in your data. Credible and accurate data is critical for making informed sustainability investments and tracking real progress against abatement initiatives. Digitised emission management databases can improve emissions measurement accuracy by >30-50%.

Emissions data is not financial data and should not be treated as such. Don’t just consider the performance of data, consider best practice.

Top tips for pitching in your sustainability strategy

  • Improve data visualisation
    Translate sustainability impact and efforts into digestible formats for everyone to understand and engage with.
  • Educate the board
    Communicate what emissions data is and is not. It may never be as accurate or predictable as financial data, but has the opportunity to be informationally richer than financial data.
  • Be transparent on what will change and what won’t
    As data capture and accuracy improves, it is likely that your impact metrics will increase. Caveat these changes from the start and educate stakeholders why.
Market Statistics Library to Help Make your Case
  • EU Emission Trading Scheme (EU ETS): €106 per metric ton of C02, raising the cost to pollute to an all time high. That’s a significant increase from 2017 when the price was €5.8 per ton.
  • Climate Investment: numbers trending at a 10-15% increase YoY. Expected to reach $1trn by the start of next year. It is also worth noting that, unlike any other sector, climate finance has been unabated by any external factors e.g., recession, COVID.
  • Banking behaviour: banks are deploying sophisticated approaches to segment their loan book and differentiate lending rates based on sustainability performance. Sustainability-linked facilities could expect to receive anywhere from 5-100 Basis Points (BPS) discount vs mainstream finance.
  • Consumer behaviour: 66% of consumers are willing to pay more for sustainable brands - with a clear link emerging between sustainability and increased revenue performance.
  • Value for employees: A recent study found 56% of employees prefer working with companies that are dedicated to sustainability.
Altruistiq's Research Reveals

80% of respondents concluded that the top three drivers for budget owners and CEOs are:

  1. Getting credible data to drive commercial decision-making
  2. Regulation challenges
  3. Improving economic return

Maximise chances of internal buy-in by focusing on these factors when making your business case for sustainability.

Altruistiq’s solution enables businesses to make strategic sustainability investments. Organisations use Altruistiq’s automated solution to identify and manage operational and supply chain emissions with unique clarity, accuracy and granularity. Please get in touch if you want to know more about how your company can optimise emissions measurement and management.

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