10 red flags of sustainability
Whether you’re reporting under the Australian Sustainability Reporting Standards (ASRS), putting together a sustainability strategy, or discussing ESG with your investors, experts can tell when you’re winging it.
Climate, sustainability and ESG considerations are material drivers of risk, reputation, growth and innovation.
Nowadays an organisational approach is no longer an optional add on. It should be a key consideration in strategy. A strategic approach reduces risk, builds reputation, unlocks innovation, and can even secure (discounted) capital and elevated valuations. It requires cultural integration, accountability and clear connection to business purpose and priorities.
Yet many organisations are still viewing this work with a reporting and compliance lens, or worse team building and PR. It’s often left to a voluntary advocates and committee as “employee engagement”. This approach fails to recognise sustainability as a lever for long term value creation.
Here are ten warning signs your company’s ESG strategy is missing the mark.
It lives in marketing, not in the business. If ed by marketing, comms or PR functions, it’s a red flag that it’s treated as an optional add on, rather than a genuine business consideration.
You’re focused on reporting, not action. Chasing down disclosure checklists while ignoring real impact and transformation means you’re doing compliance, not strategy, while leaving a bucket of opportunity on the table.
There is no link to your commercial drivers. If it isn’t tied to revenue growth, cost saving, capital access, customer demand or employee attraction and retention, it’s not impactful. You’re wasting time and money.
Everyone else has the same thing. Copy and pasted “net zero by 2050” statements don’t differentiate you. You’re missing out on blue ocean thinking that should drive competitive advantage.
It’s a side project, not a decision lens. If you’re not integrating with every product and service initiative, what are you doing it for?
Your ESG narrative sounds like show and tell at kindergarten. Real action isn’t buzzword bingo and motherhood statements on your website. It should be a programmatic way of solving real world problems in alignment with the company’s purpose and priorities.
No clear ownership or accountability. If any work sits in a silo, and isn’t at the table in leadership meetings, are you really even doing it?
It’s corporate philanthropy. There’s a place for corporate giving and volunteering, but it isn’t sustainability.
You measure inputs, not impacts. Counting volunteer days and money spent, doesn’t demonstrate impact and it’s not strategic. Impact is about how you’re moving the dial on real world issues.
It feels like a cost, not an investment with returns. Activities should be a driver of value creation, not a black hole for compliance expense. If sustainability is a cost without return in your business, your strategy needs a reset.
If you recognise any of these signs in your organisation, it’s time to rethink your approach.