Strengthening Sustainability Initiatives

Not sure where to start with sustainability.

The importance of sustainability initiatives has been understood by most business professionals, including executives, in recent years. However, how many cases have been able to create, plan, and execute specific actions in this regard? In fact, in many cases, sustainability initiatives already exist to some extent within our organization. On the other hand, revealing how these initiatives are being considered and pursued can be a challenging endeavor. Particularly, addressing ESG as a checklist or dealing with negative impacts tends to progress centrally as quick wins, making it relatively easy to establish internal rules and standards, and integration and consolidation. However, positive impacts are usually envisioned in various forms, and their timelines vary, making it quite a challenge to understand which considerations and plans fall within the scope of management and integration.

Therefore, to achieve sustainable management, particularly concerning positive impacts, it is crucial to establish a clear overarching direction for our entire organization. In doing so, continuous impact management should be implemented accordingly. In the initial stages, it may not require an extensive approach like impact management, but it is essential for stakeholders, including our executive team, to carefully deliberate on how our contributions to ESG and sustainability will take shape. Visualizing our internal efforts related to sustainability and positioning them as ‘sustainability-related initiatives’ is the first step towards medium to long-term sustainability efforts.

Understanding the importance of sustainability but struggling to convey its significance to internal and external stakeholders.

The importance of sustainability in society is widely acknowledged, but when it comes to sustainability within companies, there are various hurdles to overcome. One of the most significant challenges, especially in relation to business revenue and profit, is the nature of the business itself. In industries with a relatively large negative impact, sustainability strategy development and external communication become relatively more challenging.

On the other hand, sustainability in society and sustainability within companies are not necessarily distant concerns in the long term. In recent years, changes in consumer expectations, corporate actions, and societal acceptance have brought them closer together. Pursuing sustainability for the benefit of society as a whole inevitably enhances sustainability for companies in terms of profitability and growth. This underscores the essential role of impact management in long-term business strategies and demonstrates that impact management can be pragmatically applied to activities such as scenario planning, long-term business and strategic planning, and business and research and development portfolio management.

In the sense that ‘sustainability has relevance in both societal contributions and corporate growth,’ impact management becomes an important communication tool.

Haven’t yet implemented a systematic approach to sustainability.

In the context of sustainability management, two commonly recognized critical aspects are ‘sustained business growth’ and ‘enhanced engagement.’ To complement these aspects, we can also consider two broader perspectives: ‘internal’ and ‘external.’ There isn’t necessarily a single correct starting point, but it is crucial that these four directions align and integrate effectively. As mentioned earlier, numerous existing initiatives (or initiatives that can be redefined or approached from a different angle) are expected to be in place. Therefore, the systematization and integration of these initiatives can accelerate internal efforts and enhance sophisticated communication with external stakeholders.

At least according to IMPACTLAKE’s definition, Impact Management is seen as a significant guiding force across all four categories (business growth, engagement, internal, and external), accelerating integrated efforts. While external communication (engagement) is often the initial focus, it is also anticipated to serve as motivation for commitment within the organization, being part of MVV (Mission/Vision/Value) and committing to long-term corporate value creation. From a business growth perspective, the visualization of internal efforts (such as optimizing employment impact or internal energy consumption) along with impact management, coupled with the visualization of external efforts (impacts generated through the company’s activities), can, when managed holistically, optimize the overall picture of initiatives. This can lead to a unique sustainability story for the organization, ultimately contributing to sustainability management and the long-term enhancement of corporate value.

Finding it challenging to make progress in sustainability initiatives due to their medium to long-term nature.

Efforts towards sustainability management naturally entail long-term initiatives. Consequently, they are often separated from short-term achievements and individual business strategies. However, both aspects essentially align with each other. Sustainability, as previously mentioned, is not merely about corporate social responsibility (CSR). It is about reinforcing and transitioning the source of value, including business, from a long-term perspective. Just as long-term accumulation and growth are important, short-term achievements are also significant in ideal sustainability (working for short-term results doesn’t negate long-term achievements).

In an ideal sustainability context, it’s not just about saying, “We’ve started working towards the future,” but also about stating, “We’ve progressed with our efforts according to this roadmap towards the future and have achieved this level concerning our performance goals.” Effective goal management becomes crucial. It involves tracking whether you are on track, behind schedule, or ahead, based on a roadmap. Furthermore, evaluating how these initiatives are beginning to impact the business is equally important. Impact management encompasses these aspects, including the dimension of time, tangible outcomes, and the relevance to business strategies. Naturally, it serves as a framework for planning and managing these factors. Throughout this process, stakeholder commitment also increases, making it an effective framework for short-term results.

Exploring and Utilizing Impact Management

For insights into impact management and the latest trends, particularly focused on Europe, resources such as Global Impact Investment Network (GIIN), and in Japan, GSG Advisory Committee and Social Impact Management Initiative (SIMI), provide valuable knowledge as foundational information.

In these sources, practical methodologies and case studies on impact management, particularly from the perspective of businesses, are still relatively scarce in terms of publicly available information. To address this gap, IMPACTLAKE offers the following content and services for your reference and use. Please feel free to take advantage of them and reach out for inquiries.