Opportunity knocks for businesses that adapt key sustainability measures

Do not fear the sustainability unknown, says Aoife Connaughton, sustainability strategy and decarbonisation lead at Deloitte, a firm that is supporting Ireland’s leading businesses through their sustainability journey.

Leading by example around sustainable practices works, she says, highlighting that Deloitte is the first company in the world to roll out mandatory climate training across all staff—about 300,000 employees worldwide—in partnership with the World Wildlife Fund (WWF).

It has also established partnerships with several Irish sustainability initiatives including a €500,000 investment in the DCU Centre for Climate and Society, the development of a Sustainability Certificate with Chartered Accountants Ireland, and leading roles in Chapter Zero Ireland and the International Sustainable Finance Centre of Excellence.

The firm recently published its CxO Sustainability Survey, which showed that ESG is high on the agenda of top executives, with 63 per cent saying that their organisations are very concerned about climate change and over 70 per cent feeling growing pressure from regulators, investors and consumers.

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Connaughton says that Deloitte strives to be a leader in the sustainability space and has developed a breadth and depth of knowledge and expertise across its workforce.

Deloitte’s Sustainability practice focuses on supporting clients across their sustainability journey, with specialist teams led by Connaughton (Strategy and Decarbonisation), Marc Aboud (Risk and Regulation), Hollie Keating (Reporting and Assurance) and Orla Dunbar (ESG Data and Technology).

“We have sustainability experts across the business – from strategy and operations through to data, reporting and assurance. Sustainability impacts on all industries - we have hundreds of staff across our whole business who really want to work in the area and are being upskilled.”

Aboud, sustainability risk and regulatory lead at Deloitte, says that while all action on sustainability is valuable, it is the businesses that embrace full systemic change, rather than tactical responses, that will reap the benefits.

“Organisations shouldn’t just have a sustainability strategy – their business strategy should have sustainability built in as a core component,” he explains. “Every company is at a different stage and it’s ok to not have all the answers, but leaders need to realise that this is essential to futureproof their business.”

We know how to drive transformation projects in organisations

He adds that sustainability shouldn’t be siloed within one area of an organisation or left to one accountable executive, like the chief sustainability officer, and instead should be integrated into all areas within the organisation as this is “vital to success.”

And while a clear roadmap is essential, Connaughton states that a plan on a page is not enough.

“Companies need to act, they need to be ambitious, they need to have clear targets and they need to have buy-in from the top down for those targets.”

Drivers of change

For the team at Deloitte, demystifying sustainability means helping their clients understand environmental, social, and governance (ESG) issues and figuring out a pathway for them to thrive in both the near and long-term.

As Connaughton puts it, the key question is: “How can they effectively change their business model so that they can do not just less harm, but effectively do more good over time?”

The regulatory landscape has evolved significantly over the last number of years and has become an “alphabet soup” that can be difficult for companies to navigate.

“Since 2015, there have been over 400 regulatory changes in the sustainability space. It’s important that organisations look at their gaps from a compliance perspective, what they need to comply with in the future, and also consider what they need to do from a people, process and technology perspectives. It can seem daunting but that’s where we’re forming great partnerships with clients to work through it together,” explains Aboud.

The impetus for change is coming from all angles, not just from regulatory demands but also from customer demands.

“Before, people bought products based on taste, value and price,” Connaughton notes. “Now customers are really trying to understand what’s in the supply chain, what packaging is involved, if a product is going to be healthy as well as have a lower carbon footprint, if its plant based. There are really complex and varied requirements coming from customers, but we see it being a huge driver of change for businesses.”

The drive to attract and retain top talent, is another motivating force for businesses. In Ireland, one in three people agree or strongly agree that their employer is not doing enough to address climate change, according to Deloitte’s Global Sustainable Actions Index.

Risks and opportunities

“When I joined Deloitte in 2010, the risk landscape was vastly different,” Aboud recalls. “The world was facing an asset management crisis as we were coming out of the dust of the financial crisis. Now, 13 years on, the world is facing an ecological and social crisis. It’s really important for organisations to transform the risk frameworks and refocus on climate-related risks.”

However, alongside risk, there is opportunity. With €24 billion allocated by the Government Climate Action Plan to accelerate Ireland’s transition to a green economy, Connaughton sees a huge opportunity for businesses that are proactive around sustainability, from product innovation to accessing new customer bases.

Connaughton states that companies will need to find new ways to generate value for their customers with a shift in processes even more seismic than the Industrial Revolution.

“Effectively, what we need to do is decouple growth and greenhouse gas emissions, which is a huge opportunity, but also a challenge for businesses.”

Moving the dial on sustainability

The sixth Intergovernmental Panel on Climate Change (IPCC) report, which was released last year, saw Chair Hoesung Lee issue “a dire warning about the consequences of inaction”.

Connaughton remains optimistic, with a firm belief that action will yield positive results. “It’s telling us we have a really short window of time to act, but actually, all of the tools and solutions already exist.”

Aboud sees all types of businesses in the market, from those that have made sustainability a core component of their strategy, and want help to build on it, to organisations that are starting from scratch.

“The largest percentage of Irish businesses fall into the category of knowing they need to do something, but just don’t know where to start,” he says. “What we do is meet those varying clients where they are on their sustainability journey.”

Connaughton believes that Deloitte’s deep understanding of national and international businesses, combined with fresh thinking on sustainability, allows its teams to create real momentum at an organisation level.

“We understand our clients,” says Connaughton. “We know how they work, and we know how to drive transformation projects in those organisations.”

Find out more about how Deloitte can help you to drive sustainable change by visiting deloitte.ie/sustainability.