CSR Summary

Corporate Social Responsibility - UvA
Summary of all lectures, tutorials and

chapters of both books
geschreven door
c-universiteitamsterdam
www.stuvia.nl
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Corporate Social Responsibility
Winning Sustainability Strategies - Benoit Leleux and Jan van der Kaaij
- Chapter 1: Introduction
- Chapter 2: Patterns of Frontrunners
- Chapter 4: Focusing on Materialities That Matter
- Chapter 5: Sustainable Development Goals
- Chapter 6: ESG Ratings and the Stock Markets
- Chapter 7: Investors’ Perspectives on Sustainability
- Chapter 8: Encouraging a Culture of Sustainability
- Chapter 12: Stellar Performance from Sustainability Teams
- Chapter 13: Embedding Sustainability into the Business Core
7 Roles to Create Sustainable Success - Carola Wijdoogen

- Chapter 1: Introduction
- Chapter 2: The Networker
- Chapter 3: The Strategist
- Chapter 4: The Coordinator & Initiator
- Chapter 5: The Stimulator & Connector
- Chapter 6: The Mentor
- Chapter 7: The Innovator
- Chapter 8: The Monitor
- Chapter 9: Sustainability dynamics
- Chapter 10: Sustainability competencies
Lectures
- Lecture 1: Introduction to CSR and Sustainability
- Lecture 2: KPN and the 7 Roles to create successful sustainability NS
- Lecture 3: Non-Financial and Impact Reporting (ABN Amro)
- Lecture 4: Future Metrix
- Lecture 5: Sustainability and Leadership (Rabobank)
- Lecture 6: Climate Change and Circular Economy (Accenture & KPMG)
Tutorials
- Tutorial 1: Corporate Social Responsibility
- Tutorial 2: Science-based targets and Climate-based Financial risks
- Tutorial 3
- Tutorial 4
- Tutorial 5

Winning Sustainability Strategies - Benoit Leleux and Jan van der Kaaij
Chapter 1: Introduction
Less than ⅓ of global companies have developed clear business cases or supported value
propositions for their approaches to sustainability; corporate sustainability programs are
slow, sloppy and ineffective at worst.
Companies and executives need to develop a new sense of urgency when it comes to
sustainability, moving it from the realm of compliance to that of a key driver of performance
and innovation, which requires imbedding it deeply into their new core strategies.
Vectoring: the effective combination of direction and speed, which generates impact in
sustainability programs
- It is also used as a term to refer to a transmission method that employs the
coordination of line signals for the reduction of crosstalk levels and overall
improvement of performance (noise cancellation for headphones)
Sustainability programs lack air traffic controllers or often pilots:

- They tend to have weak direction, with respect to the specific sustainability issues
(materialities) that will be most relevant and impactful
- The board of directors and CEO should assume the role of air traffic controller. The
absence of directional bearing, or the selection of inadequate ones, lead to
misguided, uncoordinated action and usually unsatisfactory results from the
sustainability initiatives.
Vectoring offers a practical framework for identifying the relative positioning of companies
compared to their peers. It delivers valuable insights for sustainability practitioners. It is also
a strategic tool, with numerous applications:
- Designing and executing new sustainability programs
- Embedding the SDGs into the company’s core strategy
- Assessing the impact of sustainability programs on competitiveness and valuation
The ultimate objective of vectoring is to provide a clear, potent framework that offers
directions for executives to help shift their companies from integrated reporting to truly
integrated sustainability thinking
- A vector is defined not only by its direction but also by its magnitude
Sources of Data and Methodologies

As sustainability issues or materialities differ for each type of business, industry-specific
questionnaires are used with different criteria and different weightings. Companies are given
two to three months to complete the questionnaire. When they do not respond, RobecoAM
retains the option to assess those companies based on publicly available data.
- Benchmarked companies receive a sustainability score between 1 and 100 and are
compared to their industry peers.
- MSCI’s Global Industry Classification Standard (GICS): a four-tiered, hierarchical
industry classification system established in 1999 by MSCI. This is widely accepted
and therefore used in this book.
To determine the company performance on risk reduction and opportunity seizing, two DJSI
experts independently rated the DJSI criteria for their potential contribution to either risk or
opportunity based on the questions in the questionnaire. After that, the expert assessments
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were compared, and the differences were settled. The next step is the construction of a
separate risk-opportunity matrix for each industry each year.
Two other sources of information were used extensively in the research:

1. Clinical case studies were conducted over the past decade in the area of value
creation from sustainability and innovation
2. Practical examples and tools accumulated over 20 years of sustainability consulting
hae been used to emphasize both diagnostic and prescriptive application of the book
Limitations of the Research

- Research data exclusively contain companies that voluntarily participated, which can
result in participation bias.
- Selection bias: to the extent that a full peer industry review was not conducted in the
identification of representative companies
- The RobecoSAM questionnaires evolve each year to address new issues and
emerging sustainability trends. Consequently, comparing results for specific
industries at a criterion level (governance, climate strategy, operational
eco-efficiency) from year to year was sometimes not possible
Chapter 2: Patterns of Frontrunners

In Bakker´s view (president of the World Business Council for Sustainable Development),
companies simply need to start changing much faster.
Sustainability has made a resounding entry into the boardrooms of companies worldwide.
Topics as climate change and labor conditions are inescapable corporate responsibilities.
The speed of adoption varies broadly by sector, industry, and company, leading to
interesting gaps between sustainability leaders and average performers.
- Costs of non-compliance have become astronomical.
It is critical to understand the characteristics and patterns of sustainability leaders and what
enables them to justify and succeed in their approaches to sustainability.
Climate strategy: an example of data analytics

Climate change is often portrayed as one of the most important and tryle global material
issues, with the intention to destroy entire nations, kill wildlife in places, dramatically change
agricultural practices or force massive migrations of people.
- To realistically assess the performance of companies on climate change, they
developed the CDP: carbon disclosure project; run a global disclosure system that
enables companies etc to measure and manage their environmental impact. The
survey includes detailed questions on topics such as transparency in disclosure,
emission target etc.
Identifying Key Success Drivers

Each company is unique and faces different challenges and opportunities in its sustainability
journey. But sometimes it is possible to identify the key genetic sequences in the DNA of
frontrunners
- Frontrunners: the companies that shine in their sustainability approaches
Research can be both descriptive and prescriptive:

Descriptive: deep dive into the fine mechanics of sustainability leaders
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Prescriptive: identifying the factors that underlie and drive the success of the most
ambitious sustainability transformations
To summarize some of the key findings, transformational companies have a much higher
sense of direction and accelerate execution by embedding sustainability into their core
business, not adding them as appendices
- Vectoring Step 1: Getting the Bearings Right

Less is more when it comes to selecting objectives. Focus helps in delivering a
clearer story to stakeholders. And shareholders react positively when companies
deliver on key sustainability issues.
- Frontrunners are obsessively focused on a limited number of critical, relevant
and material sustainability issues.
- Focus is the key to proper implementation and ultimately capturing value from
the efforts
- Vectoring Step 2: Accelerating Execution and Getting Momentum
Once the appropriate materialities have been selected, the concern turns to activities
required to develop and roll out strategies to capture the opportunities that arise from
sustainability activities.
- Frontrunners rigorously implement sustainability programs that deliver value
through reputation, cost reduction and/or growth (or all three)
- Laggards often limit their efforts at reporting activities as part of their
customary non-financial information cycle
- Reporting non-financial information can become addictive and very
time consuming
- Eco-efficiency can be a very good indicator of the maturity of the execution of
sustainability programs. The key focus here criterion on inputs and outputs of
business operations and questions that include topics as direct greenhouse
gas emissions etc: low hanging fruit
Unilever Sustainable Living Plan (USLP): launched in 2010; often lauded as the
best-practice example of visions and strategy. It excelled not only through its clear corporate
focus, but also by fully integrating the underlying management structures into the
organizational framework of Unilever.
The Business Case for Sustainability

An intriguing discovery from the research is the sheer number of companies that lack
direction and momentum in their sustainability efforts. In many cases, the business case for
sustainability is so understated that it is hardly possible to muster the energy and resources
necessary to engineer fast and decisive change.
The absence of a clear business case for sustainability at the company level does not imply
that one cannot be built. It does put many sustainability programs at risk of turning into pure
communication exercises.
- Without the ability to connect sustainability to the bottom line, it is difficult to see how
sustainability can be made sustainable.
According to the Integrated Reporting (IR) Framework, a business case for sustainability can
be assembled from four distinct building blocks:
1. Cost savings from eco-efficiency (f.e. reducing waste, water usage or energy
consumption)
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2. Revenue growth from sustainable innovations

3. Enhanced reputation with stakeholders (clients, employees and shareholders)
4. Lowering risk (f.e. by reducing the cost of capital or the dependency on scarce
resources)
Enzyme window: business opportunities emerging from enzyme applications that can
replace chemical substances in specific situations
Partnering for Impact strategy: together, we find biological answers for better lives in a
growing world, let’s rethink tomorrow.
The Four Archetypes of Sustainability

A clear disconnect exists in many firms between their enterprise risk management and their
sustainability practices, leading to vastly understated sustainability risk exposures. The
description of risks and opportunities includes the following:
- Revenue opportunities and risks arising from changes in market growth, market
share and competitive position
- Cost implications arising from expenses related to regulatory compliance,
maintenance of social license to operate, environmental management, safety and
human resources management
- Capital efficiency trends reflecting additional investments required to meet regulatory
and other stakeholder requirements, environmental management, trends in the cost
of installed capacity and in the operational life of assets
- Risk exposure arising from governance, regulatory, business conduct, environmental
and social connection to non-investor stakeholders
Four archetypes of company sustainability programs, cach with its own characteristics:
traditional, communicative, opportunistic and transformational
- Traditional: companies with a relatively high-risk profile and limited development of

their business cases for sustainability
- Sectors as tobacco and weapons
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- Compliance-driven, leveraging regulations to justify and extend their licenses

to operate
- Have sustainability departments reporting to regulatory affairs
- Communicative: companies with a limited capture of opportunities provided by
sustainability and high ESG compliance.
- Industries where opportunity seizing is complicated (f.e. sustainability
measures are costly: automotive industry)
- Communicative companies can be found in almost all industries
- Sustainability departments are most likely to report into the corporate
communications department
- Opportunistic: companies that recognized the opportunities offered by sustainability
but are still struggling with the relatively high-risk profile of their portfolios
- Suffer from sustainability schizophrenia: were the least-sustainable parts of
the company often end up being spun off (zinc and copper commodity
business)
- Transformational: companies that have embraced sustainability in a holistic fashion:
both capture opportunities and to reduce risk exposure
- Set the standard for their industry by focusing strongly on execution
- Sustainability programs are more closely tied to business operations, driving
new opportunities for eco-efficiency and revenue growth, with co-creation with
external stakeholders
One way of assessing your starting position is through applying the Integrated Reporting
SpiltIRSpigt Framework. It helps companies report with a focus on value creation from
financial as well as non-financial drivers. The tool is centered around a model that focuses
on capturing value through six forms of capital for value creation. In brief, the six standard
capitals within the Integrated Reporting SpiltIRSpigt Framework can be defined as follows:
- Financial Capital: The funds that are available to your organization for value
creation such as debt, equity and grants.
- Manufactured Capital: Your manufactured capital is made up of assets such as
buildings, infrastructure and production equipment.
- Intellectual Capital: The most common forms of intellectual capital are, for example,
tacit knowledge, intangibles from brand and reputation and patents.
- Human Capital: Human capital is created from your people’s competencies, their
capabilities and experiences.
- Social and Relationships Capital: The relationships with your main stakeholders
and how they ensure your social license to operate, create long term value and
support growth.
- Natural Capital: Your natural capital can most often be defined from topics such as
biodiversity, ecosystem health and your use of natural resources such as air, water,
energy and minerals.
Applying the above forms of capital to corporate reporting, helps disclose matters that
fundamentally affect an organization’s ability to create value over the short, medium and
long term. The disclosed matters, also known as materialities, can have both positive and
negative impacts on your company’s performance.
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Chapter 4: Focusing on Materialities That Matter

Once the statement of purpose has been established, companies and individuals frequently
must cope with limited bandwidth in terms of attention and resources. Therefore, there is
importance in selecting a limited number of high-impact efforts, instead of the
all-too-common machine gun approach of spraying efforts large and thin.
Concentrating on a limited number of relevant sustainability issues tends to improve the

performance of such environmental, social and government (ESG) performance activities.
Evidence from research (materiality index: mapping the individual sustainability issues as
defined by the SASB, to the MSCI KLD 4000 Social Index):
- Companies that concentrated their efforts on material sustainability issues
outperform their peers in terms of total shareholder returns by 4.83%
- Companies that worked diligently on immaterial issues did not significantly
outperform their peers who performed poorly on those same issues.
- Companies performing highly on both material and immaterial ESG issues were
shown to perform worse than those focusing only on material ESG issues.
Conclusion: it pays to identify the proper ESG issues on which to focus a sustainability
strategy. A properly defined sustainability program performing well on high-material issues
strongly connected to business activities can create significant value for investors. More is
not better, better is better.
The evolving reach of boards’ fiduciary responsibility

Fiduciary trust: the legal obligation of one party to act in the best interest of another (board
acts in interest of shareholders).
- This principle has extended to include the longer-term impacts of sustainability risks
and opportunities. Stakeholders and other providers of capital are now accepted as
stakeholders contributing to the list of material topics.
While looking to comply with the principles of fiduciary trust, firms might struggle with the
question of when a sustainability issue turns into a material topic from a legal perspective:
- Sustainability issues that could have a long-term shareholder value impact must be
regarded as financially material
- A factor is deemed financially material if it might have a present or future impact on
a company’s value drivers, competitive position, and thus on long-term shareholder
value creation
The creep of corporate responsibility

The range of corporate responsibility has widened, from stand-alone issues to all value chain
drivers. In the past, companies were mostly concerned with their own behaviors, they now
also have to take responsibility for the conduct of suppliers, clients and other stakeholders,
which resulted in a radical rethink of their scope of accountability.
- Uncovers fresh facts about the impact of products on health, well-being and the
environment (sugar in food, Apple’s harsh labor conditions)
Reporting on sustainability: the Materiality Matrix

Materiality matrix: a simple graphic that visually presents on one axis the import of an issue
to stakeholders and on the other axis its impact on the company’s business.
The purpose of a materiality analysis can be fourfold:
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1. Aligning sustainability strategy with corporate strategy

2. Identifying and prioritizing business opportunities
3. Improving decision-making processes by incorporating key sustainability criteria
4. Reporting relevant information concisely
Each industry faces its own specific sustainability challenges. Within an industry, individual
companies can have significantly different profiles, which complicate sector benchmarking.
The process of developing a credible, extensive materiality matrix is not simple for any
company. In addition to the regular difficulties that occur when organizing a multiple
stakeholder process, the sustainability materiality assessment can suffer from several
business-induced complexities: complications generated by the specifics of the business
model of the company. The three most common are:
1. The mixed-up chameleon complexity: a chameleon that discovers it can change
not only its color but also its shape and size and tries to imitate all the animals at the
zoo. With a potentially very diverse client base, the range of material topics that
needs to be addressed can easily become huge and unmanageable
2. The geography complexity: as definitions of material issues might differ by region,
global operators face an extra challenge compared to local competitors. This
geographic differentiation of material issues not only applies at the country level, it
can also become relevant on a regional or even local level.
3. The hodgepodge complexity: conglomerates with a broad array of portfolio
businesses face a correspondingly large number of potentially material topics. This
diversity makes it difficult to focus the efforts on a small subset of issues.
a. In the absence of one central business driving materiality, much is left to the
individual portfolio business. Decentralized business creates extra complexity
for reporting and corporate alignment and it can stand in the way of
implementation of transformational level.
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Building your own materiality matrix

Developing a materiality matrix is an intensive exercise that requires involving a broad array
of stakeholders. Generally, the process is repeated every three to five years, with smaller
intermediate updates in some instances.
- Sometimes, it is also required to publicly disclose the materiality analysis process
that was applied and its outcomes, as well as associated targets and progress
towards achieving the targets.
To generate a materiality matrix that embraces the principles of vectoring, a straightforward

six-step approach is recommended as outlined below.
1. Select and assess the relevant stakeholders: solid overview of the impacted
stakeholders and their sustainability priorities. Helps companies to focus on the right
issues with the right stakeholders and brings improved adaptiveness to stakeholders.
Two methods of classifying stakeholders:
a. Mendelow influence-interest grid: straightforward way of visualizing
stakeholders by classifying them according to their influence over your
activities and their interest in them. It has four action quadrants.
b. Salience model: rating the relative importance - the salience - of
stakeholders by looking at the cumulative score on three elementary
stakeholder attributes: power, urgency and legitimacy. Scores on these
attributes can be high, medium or low.
i. Seven sections emerge as possible classifications for stakeholders:
ii. Latent stakeholders: low salience classes, possess only one of the
attributes
iii. Expectant stakeholders: moderately salient classes, possess two of
the attributes
iv. Definitive stakeholders: possess all three attributes
2. Define the long list of sustainability topics: from various standardization and reporting
initiatives such as GRI and SASB, lists with predefined topics exist form most
sectors. These predefined topics form a solid basis for creating long lists with
relevant topics for the selected stakeholders. Typically they include more than 30
possible topics
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3. Rank the topics and create a short list: desired vectoring can only be achieved if
topics are into a shorter list of 15 important issues. Research is applied to prioritize
the topics with the help of stakeholders.
4. Rate the business impact of the short list in terms of both risks and opportunities: it is
important to understand that the impact could be both positive and/or negative.
a. Integrated Reporting (IR) Framework created an interesting tool to
determine the impact of investigated issues. It look at four ways of creating
value from sustainability:
i. Cost savings from eco-efficiencies
ii. Revenue growth
iii. Enhanced reputation
iv. Lowering risk
5. Construct a concept materiality matrix: from the researched stakeholder information,
the first version of the materiality matrix can be constructed (draft concept). To be
visually attractive, there are a number of practical questions:
a. Are color marking required for local and global issues?
b. Is it possible to display the link between company strategy and the materiality
matrix?
c. How will the selected topics be displayed?
d. Should the standardized actions be included in the matrix quadrants?
6. Fine-tune the materiality matrix, get sign-off by senior management and document
the process: final checks are conducted. Do not forget once the sign-off has been
obtained to document the process for potential use in the annual report.
Materiality Map: a quick-and-dirty materiality scan. The map is applied during a two-hour
workshop with a group of 3-8 participants.
1. First, the scope of the organization is
considered
2. Next, determine what stakeholders are
relevant and solicit examples of
sustainability initiatives within the scope
of the organization are identified
through a plenary brainstorm session
3. Plot the sustainability issues on the map
considering the relative business impact
and relative importance to stakeholders
4. Take the 7 most important material
issues and score the organizations’
performance
5. Wrap up the workshop by concluding in
a plenary formal
Tips, traps and takeaways

Tips:
- Put extra emphasis on the governance of the materiality analysis process and its
documentation
- Map the high-importance sustainability topics with the company’s must-win battles
and its enterprise risks, identify gaps and develop an action plan to overcome them
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- Link the SDG to your materiality matrix

- Use the correct jargon to describe material sustainability topics as they will resonate
better in the organization
- Once the choice of material sustainability topics is finalized, focus on the attractive
presentation of the matrix
Traps:
- Make sure to obtain the attention of senior management: unsupported processes
generally lead to generic materiality matrices with little added value
- Beware of the reporting-purpose-only materiality matrix that is too distant from the
business to really engage colleagues and outside stakeholder
- In composing the long list, do not confuse material issues with operational topics or
financial indicators such as revenue growth
- When comparing your selected sustainability focus with that of your peers, be aware
that official reports provide a projected image.
Takeaway:
The importance of an authoritative materiality matrix was brought forward. In weighing and
selecting sustainability topics, less is more and better is better.
Focusing on a concise set of sustainability issues that are unmistakably material to
stakeholders is fundamental to success; it will not only increase the energy of participants in
the sustainability program but also reduce reporting efforts and make the external
communication more comprehensible.
To determine the relevance of the various stakeholders considered, two methods for
stakeholder classification were presented:
1. The Mendelow model that categorizes stakeholders into one of four quadrants
through its Influence-Interest grid;
2. The Salience model where the relative importance of stakeholders depends on the
scoring of three stakeholder attributes: power, urgency and legitimacy.
Managing and documenting the process for the development of the materiality matrix is
another key to its success. When developing a materiality matrix, several business-induced
complexities need to be taken into consideration.
Chapter 5 - Sustainable Development Goals

We will develop a better understanding of an outside source of drive and inspiration for many
organizations and individuals, namely the:
United Nations Sustainable Development Goals: a unique initiative in voluntary global
responsibility with clear targets and deadlines
- September 25, 2015, 193 nations adopted this ambitious set of goals. Made by
governments, businesses, NGOs, and citizens around the world
The goals were set to cover a broad set of topics in 3 main dimensions of sustainable
development:
1. Economic growth
2. Social inclusion
3. Environmental protection
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The goals were meant to be universal and had to apply to all countries.
- The private sector was tasked with the crucial role of becoming the engine for
innovation and technological development behind the SDGs
- Since action and progress on the SDGs was the most important features of the
goals, governments, civil society, the private sector and other stakeholders were all
expected to contribute to the realization
- To keep healthy pressure on implementation, the responsibility to monitor progress
toward the SDGs on the road to 2030 was required
Food waste
Roughly 30% of our global food is wasted, resulting in a loss of $940 billion and 8% of global
Greenhouse Gas emissions, while 795 million people are undernourished. Responsible
consumption and production is goal 12.
- Awareness of food waste opened an array of opportunities in the marketbase (selling
imperfect fruits for less)
- It also attracted a host of startup entrepreneurs looking for other gems in the garbage
(use imperfect lemons to make lemonade)
- Even as a social startup with admirable business models, one must be careful
not to wake the sleeping giant (big company) if you want to survive
- Firms aspiring to contribute to goal 12 depend on clear direction and effective and
successful implementation
- Three-step principle: target, measure and act - to develop the business
case
- Target: set ambition, which motivates action
- Measure: what gets measured gets managed
- Act: what ultimately matters is action
Focus and structured action planning were essential for achieving impacts. Firms need to
check for SDGs that are considered relevant but are still unaddressed in their current
sustainability program: compare the 17 SDGs with the firm's respective targets.
Peer analysis: comparison the reported activities of your company with the industry peers.
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- Can result in an action list for improved communications and led to changes in the
firm’s SDG-focus
- Once the peer analysis in complete, the selection of appropriate SDGs and
associated targets is back on the table
- Forward-thinking companies have been mapping their selected SDGs with their
strategic must-win battles, to increase boardroom relevance of the SDGs
Partnering is required
Cooperation and partnering is a source of energy for effective sustainability efforts, because
the world’s biggest challenges cannot be solved in isolation. To reach ambitious
sustainability goals, global partnerships are nothing less than unavoidable.
Local and Global: not just the developing countries

SDG 6 aims to ensure the availability and sustainable management of water and sanitation
for all. With water scarcity and flood resilience becoming growing issues in many countries,
partnerships to address SDG6 are no longer the exclusive preserve of developing countries
- Once regarded as a distant problem, water has become a topic on global scale
- Global topics within the SDGs do not always require large-scale, global initiatives
(Bavaria collaborates with locals farmers, banks, government and other stakeholders
to preserve resources)
The SDG Proposition Workshop

When a firm contemplates the development of an SDG initiative but does not have the
resources to conduct full-fledged research on this, a simple workshop version of the SDG
analysis can be helpful.
- Make sure to start with the definition of material sustainability topics for the firm
- Ask participants to note 5 items containing the company’s most relevant strategic
initiatives and discuss them
- Determine in plenary the geographies best targeted by the SDG initiatives
- Brainstorm on potential SDG initiatives
- Present the ideas and cluster them if necessary
- Select jointly the top 5 initiatives through voting
- Connect the ideas to the sustainability topics, must-win battles and geographics

Tips:
- Follow the Champions 12.3 example of taking a target-measure-act approach
- Address only the most relevant SDGs and concentrate on turning plans into action
with the help of clear monitoring
- Link the SDGs to your existing materiality matrix, solve potential conflicts and
complete the program where gaps appear
- Consider building a coalition of the willing in your value chain with fellow stakeholders
for the realization of action plans
Traps:
- Beware of insufficient pruning of SDGs on relevance resulting in a lack of focus
- Challenge and test the relationship of the selected SDGs with the company strategy
- Avoid looking for isolated approaches, with little partnership and collaboration
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- A paternalistic framing, viewing the SDGs as a faraway challenge, is a setup for

failure. Make your SDG program local if your business is local
Takeaway
The SDGs offer opportunities in many forms and sizes: the key concern for companies is to
actively contribute to some of these goals. The chapter highlights two leading prerequisites
crucial to success:
1. The alignment of the selected SDGs and the intended solutions with the existing
priorities in the company’s strategy and sustainability program. A mapping exercise
to scrutinize the SDG alignment is therefore recommended.
2. The suggested SDG peer analysis to come to grips with the overall SDG landscape
within the industry, the development of partnerships within the value chain, big and
small, global or local, are indispensable. Partnering can be developed in a horizontal
sense (with peers), a vertical sense (with value chain partners) or both
Chapter 6: ESG Ratings and the Stock Markets

ESG ratings: environmental, social, and governance ratings
ESG attention is upcoming because:
1. Shareholders have started to pay attention to sustainability as a driver of value
creation.
- Ignorance-is-bliss strategies have outlived their usefulness, so there is a lot
of attention to the sustainability issues of the investments of shareholders
- UN Principles for Responsible Investment (PRI): expects its signatories to
incorporate ESG issues in their investment analysis and decision-making
process
- Turns investors into active owners incorporating ESG issues into
ownership policies and practices
2. The ESG concerns have also evolved from simple negative screening: the practice
of excluding whole sectors, individual companies or certain practices from investment
portfolios based upon negative ESG factors, toward a more proactive position on
sustainability
a. Active owners, through voting and engagement, encourage companies to
improve their ESG results
b. An improved ESG profile will lead to decreased costs, enhanced
competitiveness and ultimately better profitability for investments
Four-step company assessment

1. Gather the company’s sustainability data, condensing it into nine topics
2. Developed a company-specific analysis using Porter’s Five Forces model, creating a
link between the companies’ competitive advantage and their social responsibility
3. Involved benchmarking the companies’ preparedness, gauging the quality of
ESG-driven reports and weighting the maturity of the company’s social-impact
strategies
4. Required compiling a summarized version of the assessment, aimed at highlighting a
company’s strengths and weaknesses and addressing its main sustainability gaps
From engagement to results
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Active engagement does not necessarily lead to results; it is a long road from getting
institutional investors to consider integrating ESG variables into their investment decisions to
actually factoring ESG parameters directly into their valuations.
- Issue of identifying ESG issues that are material to the valuations (difficulty in
interpretation)
- Solution: demand higher-quality information
The increasing burden of non-financial reporting

Companies are often overwhelmed by the sheer volume of reporting now expected from
them. To cope with this, a number of avenues are available:
- A solid integration of the sustainability key performance indicators (KPIs) within the
regular management structure helps reduce the extra burden
- The establishment of a selective set of sustainability issues to report about
decreases the necessary efforts
Reporting trap: with so much expected on the reporting front, what is actually left in terms
of resources to effectively improve the business impact of the company on society?
While sustainability is becoming more multi-faceted, institutions are forced to rely

increasingly on third parties to assess ESG performance, creating a whole new industry of
service providers: ESG rating agencies
- Companies need to make sure they are not being rated on issues that are not
material to them and thus unfairly downgraded in the ratings
- But, participation in ESG ratings can bring additional attention for sustainability from
the C-suite, provide useful analysis and feedback to improve sustainability programs
and a source of peer information.
Designing an ESG Ratings Game Plan

ESG ratings are complex and getting more so. Hence, it is crucial for companies to develop
an appropriate game plan to deal with them.
1. First step is to question if a company should bother
2. Sorting through the various ESG rating schemes for the one that is most appropriate
3. Determine the why:
a. Learn form its benchmarking
b. tell the investment community how well it is performing on ESG issues
c. Both
Most companies are likely to opt for a mix of objectives to capture two different benefits:
richness and reach
- Value from learning: richness
- Value from communication: reach
Richness
Richness: refers to the need to gain insights on the company’s ESG performance, not only
through feedback from the rating agencies but even more so from comparison with
competitors and peers (eager student perspective):
- Focus: does the rating focus solely on one specific issue, or does it assess the
company’s sustainability performance from a wider perspective?
- Depth of the questionnaire: how broad or specific are the questions in the rating?
- When main objective is to learn, detailed questions are more valuable
14
- Level of personalized feedback: what kind of feedback on the company

performance is provided at the end of the process
- Feedback is only relevant as a tool for optimizing performance if it is detailed
and insightful
Reach
Reach: refers to the ability to demonstrate leadership in sustainability through a credible
third party (seeking influence perspective):
- Initiator and target group: what is the organization behind the assessment and
what are the target audience?
- Companies looking for a strong reach need to prioritize stakeholder relevance
and impact
- Recognition: conduct a proper audit of the reputation and trustworthiness of the
ESG ratings agency
- Assessment starts with key stakeholders, ask them which 3rd party they trust
- Communication channels: publications such as the RobecoSam Sustainability
Yearbook, are useful for demonstrating your company’s performance from an
independent expert perspective
- Take note of the rating agency’s business model and how it communicates its
results
ESG Program Canvas: to help companies unravel the complexities associated with the
outcomes of ESG ratings
1. Filling in the sustainability checklist in a plenary brainstorming format
2. Compare results against heatmap score of industry sustainability leaders
3. Uncover ESG performance gaps
4. Identify possible causes of the ratings outcome from the sustainability strategy
checklist
5. All interventions and actions can be shared and clustered
6. Summary of the most appropriate interventions is prepared including the ownership
of the action points and timing

Tips:
- Develop a vectoring approach to present your sustainability strategy to investors
based on ESG factors with a focus on links to your core business
- Determine the sandbox in which you want to play (relevant ESG ratings)
- Use the feedback from ESG ratings not just to iterate your questionnaire answers but
also to help improve your sustainability program in a structured manner
Traps:
- Do not delegate the intelligence of your sustainability program to the questionnaire of
the ESG ratings
- Answering all ESG rating requests without prioritizing resources is likely to
lead to mediocre results
- ESG ratings are evolving. Stay updated
Takeaway:
15
The ESG ratings market is a booming industry that is developing ever more sophisticated
tools and procedures to assess companies. These tools are continuously updated to reflect
new areas of concern. Inclusion of SDGs as relevant factors in ESG assessment
methodologies is an emerging field of interest.
The field of ESG ratings is clearly becoming more competitive. For participating companies
looking to inform potential and current investors, this increased complexity results in an
expanding reporting burden. It becomes essential to select the best-fitting ESG ratings
agencies, using the suggested reach-richness mapping, to balance the influence potential of
the individual ESG ratings with their learning potential.
Chapter 7 - Investors’ Perspectives on Sustainability

The money world is never late to catch on a new value creation opportunity, green or not.
- Venture capitalists: quick to develop investment vehicles targeting the technologies
required to create a more sustainable future (green/impact/responsible funds)
- Private equity managers: have been in a position to influence the adoption of
sustainability standards in their portfolio companies
- Hedge fund managers: also initiated efforts to adopt improved practices
- Mutual fund managers: responded by putting a collection of retail vehicles with
clear sustainability credentials on the market
Buy-and-sell attitude: shared by ventured capitalists and private equity investors
- Return to funders: go back to their investors regularly and raise the subsequent
funds to create an obligation for the general partners
Investors often discovered the potential value impact of CSR activities before companies
themselves, and with their usual efficiency, elaborated various schemes to benefit from
them.
Sustainability and startups

Innovation and corporate sustainability research have focused mostly on large companies.
Large firms have the administrative systems and corporate reputation for more extensive
sustainability reporting, whereas smaller companies often lack resources and structures.
- But, startup are often characterized by an entrepreneurial style of management,
offering the answers to many social and environmental problems
- SMEs, and especially startups, can be the ideal incubators for eco-innovation,
and can bring to market new, less environmentally damaging products,
services and processes
- Startups are a rich source of sustainability innovation, in products, services
and business models (AirBnB, Uber, sharing space/equipment is more
sustainable)
- New generation of sustainable entrepreneurs has appeared focusing on the
triple bottom line: balancing economic health (economy), social equity
(people) and environmental resilience (planted) through their entrepreneurial
behavior.
- Focus on benefit stacking instead of pure profit maximization
The adoption of the SDGs encouraged innovation from the private sector as companies
were tasked with the responsibility of becoming the engine for innovation and technological
development. It bred opportunities for entrepreneurs, generating a new type of accelerators,
dedicated to the pursuit and support of green ventures.
16
Venture capital: invests in early stage, mostly technology-based companies and capitalizes
on their success
- Naturally drifted toward larger deals: later investment stages in the development of
technology companies
- Always search for the next big thing: so no surprise that they are often the pioneers
Sustainable venture capitalist: dedicated to investments that have the potential to
generate large economic returns, while creating positive environmental and social impact
- Seek to optimize the triple bottom line rather than economic returns only
Private equity: capitalism on steroids, observers have an eye for fast value-creating
opportunities, on which they unleash the most effective tools management and financial
theory have to offer.
- Game plan is usually very simple and very focused
- Required exit after 3-5 years of investment
1. ESG Integrated: most basic approach: KKR integrated ESG consideration into
pre-investment due diligence and post-investment management
2. ESG Targeted: include investment where an improved performance on material ESG
issues helps to create value or mitigate risks (eoc-efficiency, eco-innovation,
eco-solutions)
3. Solution Focused: include investments in real estate, energy and infrastructure that
provide solutions for sustainability issues, such as health-care and climate change
Hedge fund investors: once known for pushing extreme cost-cutting measure, have
emerged as active promoters of a different kind of corporate action, namely social and
environmental change
- Socially responsible investing
Mutual fund: is a type of financial vehicle made up of a pool of money collected from many
investors to invest in securities like stocks, bonds, money market instruments, and other
assets.

Tips:
- Sustainability provides a rich investment theme for technology-driven investors, such
as venture capitalists
- Private equity investors, because of their short buy-and-sell strategies, are naturally
focused on what can create value rapidly for their investee firms. It is no surprise that
hey pay significant attention to ESG factors, not only in the investment phase but
also during their active involvement period
- Many private equity firms have turned CSR into a competitive advantage when
negotiating
- Private equity firms are very competitive against each other; CSR has become an
effective weapon
- Mutual funds have developed sophisticated ESG-driven investment strategies
Traps:
- Sustainability needs to be considered as a source of value creation opportunities, not
simply as a risk exposure
17
- Beware of the reporting purpose only sustainability programs

- Do not underestimate the incentive and motivational potential of an active CSR
agenda in the war for talent
- Avoid the less material issues
Takeaways
- Venture capitalists were quick to spot the potential of new technologies required to
create a greener, more responsible future. Funds were launched with pure or mixed
sustainability strategies to pursue emerging technologies with the potential to create
new industries.
- Private equity investors were hot on their heels, first paying lip-service to the cause
in their annual reports to limited partners but then realizing the potential of
sustainability for their portfolio companies
- Hedge fund investors, without the luxury of the relatively long investment horizon of
private equity investors, jumped on the bandwagon as well, ensuring that their
arbitrage strategies would also be supported by strong compliance policies.
- A practical conclusion of the chapter is that even the most financially savvy investors
have not only accepted but incorporated sustainability into their products and
strategies
Chapter 8: Encouraging a Culture of Sustainability

Those who lead sustainability transitions inspire the people around them, sparking a culture
of sustainability in the company that leads to changes in behaviors and attitudes.
To successfully develop a culture of sustainability, the C-level (CEO, CFO etc.) requires help
from middle management, a certain level of maturity in the industry and some closeness to
consumers’ needs
- The ability to articulate a vision and define ambitious goals sets leading companies
apart
- Companies that have many social and environmental policies and sustainability
policies (high-sustainability firms) were deemed to have a stronger culture of
sustainability compared to low-sustainability firms
- High-sustainability firms outperformed low-sustainability firms on total
shareholder returns
- High-sustainability firms are better at involving their board of directors and
made more use of dedicated sustainability board committees
- High-sustainability companies were better at embedding sustainability into
their senior management structures
Measuring Culture
There is a positive impact of a culture of sustainability on performance. Unfortunately, many
directors give more attention to key financial metrics and strategic priorities and
consequently fail to recognize that their mission cannot be fulfilled without the appropriate
corporate culture.
- An undermanaged culture can backfire badly
To define and measure culture, several tools are available, such as in-house scorecards and
surveys, standardized organizational culture measurement models.
18
- Denison Organizational Culture Model: linking culture to bottom-line performance

(profitability, growth, quality, innovation, customer/employee satisfaction). Identifies
and assess four key traits of cultural strength:
1. Mission (indicator of integration, direction and vision)
2. Consistency (indicator of integration, direction and vision): backed by values
and systems
3. Adaptability (trait of flexibility): listening to the marketplace
4. Involvement (trait of flexibility): alignment and engagement of employees
It accentuates the importance of culture for the development and implementation of a
sustainability strategy.
Building a Culture of Sustainability: the Power of Coalitions

The essential proposition is that a culture of change can be strengthened by groups of
like-minded companies forming coalitions of the willing that share a common culture.
- Partnerships do combine skills and provide access to constituencies that one partner
might not have, but they also enhance the credibility of results
- Result that might be less effective and believable if they only come from
business, civil society, or government
Coalitions: companies with strong sustainability cultures are forming coalitions with
like-minded companies to advance knowledge, create momentum and engage partners in
developing value chains that possess a higher level of sustainability
A possible alternative to becoming a member of an existing movement is to create a

coalition of your own. Coalitions can also be forged around sustainability issues:
- Champions 12.3: coalition of 40 CEOs, ministers and other global leaders dedicated
to achieving the Sustainable Development Goals (SDGs) on food loss and waste
- The results of the initiative are openly shared with internal and external stakeholders

Tips:
- Involve the middle management early to help turn the firm’s statement of purpose
into an effective culture of sustainability
19
- Check for coalitions that are compatible with the company culture on the topic of
sustainability for knowledge exchange and gaining momentum
- Measure, and keep measuring, the current state of corporate culture and respond to
the outcomes of these surveys
Traps:
- Although buy-in from the top is essential for success, it is not enough. Be careful not
to focus on the boardroom only
- Avoid launching a spree of well-intended sustainability initiatives from the top,
especially without an appropriate unifying theme and/or overarching target
- Compliance on governance issues is just a starting point. Once the governance
within the organization has been covered, redirect the sustainability efforts toward
value capture from innovation and operational eco-efficiency
Takeaways
A culture of sustainability has a positive impact on corporate performance and on corporate
behavior. Developing a potent sustainability culture requires leadership qualities very similar
to those required to lead major change processes.
Laggards have taken notice and are not sitting on their hands. The divide on the
performance of governance-related factors between decile extremes has been decreasing,
even though sustainability pioneers seem to continue to harvest the fruits of their early
starts. Experts predict that sustainability leaders will have to excel at integrated sustainability
strategies, vision, innovation and transparency in the future to maintain their prime positions.
Coalitions are shown to be powerful vehicles for exchanging information on sustainability
programs, jointly raising awareness and gaining momentum for cultural change with internal
and external stakeholders. In the absence of a suitable established coalition, companies
have at times resorted to creating their own.
Chapter 12: Stellar Performance from Sustainability Teams

A four-pillar structure is presented to energize the teams in charge of sustainable innovation.
This is a method to generate superior performance from sustainability teams
1. Direction: start with a strong statement of direction, a clear-cut sense of purpose and
direction energizes the innovation process
2. Diversity: accelerating sustainable innovation also implies developing a large variety
of solutions and capitalizing on the diversity of teams
a. Developing more alternative sustainable solutions (MASS) is less likely to
happen with homogenous teams that lack diversity of opinions and
perspectives
3. Experimentation: trail and errors, a journey of discovery, experiment with different
things, continuously developing, experimentation extended beyond the industry
boundaries
4. Collaboration culture: collaboration with value chain partners is practically
unavoidable in the acceleration of sustainable innovation.
a. Companies organized under a ‘network of teams’ operating model were found
to reach a higher level of collaboration, including with the company’s external
ecosystem
b. Knowledge and experience from outside is needed as well - need to
externalize collaborations
20
c. Culture of collaboration can improve the performance of sustainability teams,

impacting not only external stakeholders, but also internal team members.
Key Account Teams and Sustainability: Bootcamps and Boosters

One way to enhance collaboration on sustainability within the ecosystem is by working
through key account teams.
- Bootcamps and boosters approach provides an excellent opportunity to put into
practice the four-pillar structure
- It represents a complementary and interesting way for commercial teams to leverage
their company’s sustainability programs for the benefit of key clients
Key account management: the approach your sales people take to your most important
customers and clients.
Stages of bootcamps and boosters:

1. Stage 1: internal bootcamp with key account team, usually cross-functional;
customers, competitors and other stakeholders are analyzed to discover the potential
for collaboration on sustainability issues (one-day bootcamp)
2. Stage 2: multi-stakeholder booster: meeting between the client and the key
account team is scheduled to share the bootcamp results and jointly develop
potential solutions through a co-creation workshop (½ day)
a. Grounds for the common sustainability efforts are scopen
b. Key material issues performance is detailed, singling out relevant
opportunities
c. A 100-day plan was jointly developed, and next steps are specified, assigning
owners and timelines to monitor progress
These joint efforts contributed considerable to improving the sustainability performance of

both companies, with the combination of bootcamp and booster leading to increased
business and a more intimate collaboration

Tips:
- As a team, do not limit the quest for solutions on sustainability to the existing
boundaries of your industry. Look way beyond for inspiration.
- When looking for sustainable development within the value chain, create a
multi-functional cross-company teams diverse enough to effectively address the
challenge
Traps:
- Commercial teams sometimes fail to recognize the client’s emerging requirements for
sustainability. If not prompted, the possibilities of jointly addressing the sustainability
issues might not reach the commercial agenda
Takeaways
The importance of teamwork was brought forward. A four-pillar approach was proposed to
improve the performance of sustainability teams. To reinforce the messages of the chapter
but also roam new frontiers for performance improvements, the possibility of engaging key
account teams in a co-creation process of sustainable development with key clients is
outlined. To facilitate that process, a formal game plan involving two workshops, an internal
21
bootcamp and a booster with the client and possibly other external stakeholders, was
introduced with the purpose of improving the joint ecosystem performance.
Chapter 13: Embedding Sustainability into the Business Core

The final step into effective sustainability implementation is ensuring that the great strides
made in improving a firm’s positive impact on society and the environment become
sustainable. We discuss how to make sustainability an integral part of the business and
ensure its perennity (eeuwigheid).
Principal preconditions for successful implementation:

- Strategy compilation: how to start with implementation
- Readiness assessment: where to start with the implementation
- KPI reporting: measuring progress on a local level
Compiling the sustainability strategy: how to start?

Four archetypes: traditional, communicative, opportunistic, and transformation, identified by
analyzing the risk-reward trade-off made by companies on sustainability. Before embarking
on a journey to improve the sustainability performance, capturing its starting position in this
model draws a simple, but telling picture of the situation.
- To estimate the company position, the performance on the main attributes of the four
archetypes can be evaluated
- Plotting the current position is no replacement for an in-depth analysis on
materialities and ESG ratings, but it provides a useful overview with which to start the
implementation roadmap.
Issues identified through the materiality analysis are often not connected with the enterprise
risk assessment for several reasons:
- Limited understanding of sustainability risks
- Diverging reasons for sustainability versus risk disclosures as well as inconsistent
time horizons
To map this materialities with a company’s risk assessment, a number of approaches can be
used:
- Three-way matching: combine your own internal risk expertise with the knowledge
obtained from stakeholder interactions and the criteria from various reporting and
ESG rating system
- Helps the company cover risk not only from a business perspective but also
from a stakeholder point of view
- SONAR (Systematic Observation of Notions Associated with Risk): through an
internal platform, employees report and discuss early signals of issues that might turn
into risks for the company. Periodically, these signals, or risk notions, are clustered
and assessed further by internal risk experts
- Finally, in-depth investigations are carried out on selected topics, and
outcomes are integrated into the risk management process
- Not limited to general topics, it also includes risks related to ESG, enabling
the firm to identify actual and potential risks at a very early stage
Assessing the Business Readiness: Where to Start?
22
Once the sustainability strategy has been compiled and adequately documented, the next
challenge is to identify where to start in addressing the issues identified and how to gain
maximum momentum for change.
- To answer that challenge often means addressing a series of related questions
- To start formulating answers, it is useful to revisit the materiality complexities
(mixed-up chameleon complexity, geography complexity, hodgepodge complexity)
To identify the business units with the most potential for improvement requires conducting a
portfolio sustainability assessment
- Companies are looking for a more refined view of sustainability performance of their
individual businesses
- The World Business Council for Sustainable Development (WBCSD) developed a
framework to conduct such a portfolio sustainability assessment. It plots the nit
strength on sustainability against the maturity of its markets.
- Sustainable Portfolio Management (SPM): tool to identify and analyze
opportunities that could bring positive impact to its non-financial objectives
- Evaluates the company’s products from a holistic perspectives based on
three sets of criteria
1. Environmental footprint
2. Social impact
3. The way in which they answer market demand and challenges
- Products are sorted on a two-dimensional matrix (heatmap) either as stars,
neutral or as challenges, considering:
- The products’ environmental manufacturing footprint and its correlated
risks and opportunities - vertical axis
- The degree to which the products bring benefits or face challenges
form a market perspective - horizontal axis
Taking Value Chains as Starting Point
23
A sustainable portfolio assessment is a useful tool for prioritizing business units, divisions or
product groups for sustainability implementation, but smaller or less diversified firms may
see this as technical overkill.
A simple value chain approach can provide the basic insight necessary for implementation.
For Heineken, the top four criteria were:
- Use of regional raw materials such as grain, water, hops, etc. (85%)
- Regional job creation and security (83%)
- Supporting the regional economy and farmers (80%)
- Avoiding long transport distances, carbon footprint (75%)
KPI Reporting
Priority targets: which parts of the organization to address first in the sustainability
implementation
- Necessary to identify appropriate KPIs and reporting procedures for local
implementation
- Key performance indicators (KPI): measurable value that demonstrates how
effectively a company is achieving key business objectives
- Non-financial reporting of sustainability KPIs requires solid frameworks, discipline
and effective reporting tools, irrespective of the ultimate purpose of the information
gathered
- Sustainability KPIs: evaluate fundamental ecosystem issues. They should not only
cover the company’s direct activities but also their impact on the value chain
Stakeholder theory: posits that an organization’s performance should be measured against

the expectations of a broad range of stakeholders with vested interests in the impact of the
organization’s activities
- Balanced scorecard: performance management tool, which always includes
non-financial information
The 5R Philosophy: A new perspective on Production Waste Management

The 5R approach: consisted of sorting the waste into groups according to the way in which
it could be managed:
24
1. Reject: from the production process entirely

2. Reduce: by modernizing the production process or better sorting
3. Reuse: in production
4. Recycle: and use again
5. Recover: incinerate to generate energy and other inputs
The full implementation plan ultimately required:

1. Searching for technical solutions to reduce the amount of waste generated
2. Modifying processes at the plants
3. Searching for contractors that specialized in the disposal of production waste
4. Informing staff and changing the corporate culture
Developing a Roadmap: Plotting the Future

Plotting the Future: a planning tool focused on actions to achieve defined sustainability
goals. The purpose of the tool is to develop a concrete roadmap on how to get from the
current situation to the desired objectives
- Based on back-casting: a technique that starts by projecting a future objective on a
time horizon and then plans backwards toward the present
Workshop:
1. Team jointly develops the future objective
2. Prioritizing the milestones
3. Participants also can create additional milestones to complement the prepared ones
4. Prune the list and prioritize the milestones (max 15)
5. Develop an action plan: detailed, containing features such as the actions to take,
resources, responsibilities, stakeholders, and schedule
6. Complete roadmap is delivered, enabling the teams to get started on the
implementation
7. (To improve the roadmap further, make an explicit 100-day plan that includes
actions, timing and resources)

Tips:
- Compose a one-page summary of the sustainability strategy for use by the senior
management, including top-level targets, SDG framing and clear linkages to the core
business
- Effective implementation requires selecting the most appropriate starting point
- Dust off the old balance scorecard and equip it with the (proposed) sustainability
KPIs. This will allow you to assess whether these KPIs provide a sufficiently
complete view from a stakeholder perspective
Traps:
- Beware of KPI overload: managers have limited bandwidth and hence can only
effectively track and influence a limited number of factors (materiality issues)
- Sustainability is a dynamic concept: new issues will keep popping up (use SONAR)
Takeaways
This chapter focused on how to effectively embed sustainability into the core of the business,
as a means of ensuring its own sustainability. Preconditions for successful implementation
25
were uncovered by following a simple three-phase game plan: strategy compilation,

readiness assessment and KPI reporting.
Balanced scorecards, that is, management dashboards with sustainability KPIs, were
shown to be very convenient tools for measuring a company’s key material issues but also
for representing the various stakeholders’ opinions.
The waste management program at the Tula production cluster showed the relevance and
potency of the vectoring approach to sustainability strategy definition and implementation
under difficult circumstances.
The Plotting the Future instrument was introduced as a convenient planning tool focused
on action to increase the odds of achieving the defined sustainability goals or vision
7 Roles to Create Sustainable Success - Carola Wijdoogen

Chapter 1: Introduction
The 7 roles described are needed to fully embed sustainability or corporate social
responsibility in a company
Each role is different and adds specific value to
the embedding process in the company.
1. Networker: engage
2. Strategist: lead
3. Coordinator and Initiator: support
4. Stimulator and Connector: challenge
5. Mentor: empower
6. Innovator: innovate
7. Monitor: learn
26
3 amendments:
- The coordinator: expanded with the initiator role, because starting a project/activity
yourself and showing how changes can been made often works as a catalyst
- The stimulator: expanded with connector, because CSO (chief sustainability officer)
not only stimulates change but also creates new connections with a multidisciplinary
cross-company approach
- The innovator: is added since driving relevant innovations is essential for achieving
the sustainability goals
This list of roles are linked with the specific CSR or sustainability activities that need to be
done within a role, based on the practical experience of many CSOs or CSR managers.
Some activities are linked to more than one role.
The 7 roles are recognized in different parts of the world; however, the definition and
maturity of sustainability or CSR differ substantially. These differences might decrease in the
coming years. Every company has its own sustainability journey. The everyday practice is
different for every CSO, CSR or sustainability professional.
CSR and sustainability are used interchangeably, but in essence it is the same. The book
will give practices and experiences of the authors journey as a CSO of NS.
Chapter 2: The Networker

Networking is a key component of the CSO’s role.
Networking: means maintaining relationships with external parties, creating connections
and recognizing and shaping collaboration opportunities.
- You build a network of peers who meet together and learn from each other
- Responsible for the communications on the sustainability results of your organization,
which includes speaking engagements
- Indispensable for stakeholder engagement
Stakeholder engagement
Corporate responsibility or sustainability management is a continuous process (together with
stakeholders). Stakeholder engagement is both important and complex.
Stakeholders: all internal and external people on whom your products or services have a
significant impact and whose activities - in turn - can have a major influence on a company’s
performance. (clients, communities, shareholders, suppliers, government officials)
- Stakeholders interest can be expressed and served in different ways (trough
individuals, organizations, market research, international frameworks
- Stakeholders interest will nog always be aligned; they can conflict with each other
and with the interest of the company and society
Actively engaging stakeholders not only helps to give direction, but it also helps to generate
support for the organization and its CSR strategy.
It is important to take stakeholders into account and to involve them proactively. It is
therefore of great interest to build a strong network and to organize the inclusion of relevant
stakeholders and their social interests.
27
You can organize stakeholder engagement by looking at your organization in 2 ways:

- What forms of regular contact already exists with your stakeholders, and through
which processes?
- Which stakeholders are not yet engaged? How can you structure their engagement?
In a company, a process is usually already in place to engage market-related stakeholders

that influence a company’s core activities. Each department maintains its own relationships
with its key stakeholders.
- For the sustainability stakeholders that are not yet engaged (NGO/governments) first
consider which department should build and maintain such a relationship.
- Companies with a longer history of stakeholder engagement usually hold (bi)annual
central stakeholder dialogues: very valuable, because stakeholders are better able
to calibrate the importance of their own interests.
Several roadmaps available to map the different stakeholders and determine how you want
to engage with them:
- GRI guidelines
- ISO 26000
- Local CSR guidelines
Networking
Networking serves many purposes:
- Finding partners in your sector or supply chain with whom to cooperate or innovate
- Learning from your peers is common practice when learning on the job as
sustainability professional
There are many networks that a CSO can join (sector, product specific, national,
international). Some networks are free of charge or requirements, others are not. A proactive
and careful selection of added value of a network for you or your company's goals is
important, since time and resources are always limited.
- Ask advice of peers to find out what network would serve your purpose best
Stakeholder engagement in practice

Stakeholder engagement should be about building relationships and acting on issues and
not about endless lists of issues and stakeholders.
- It is all about people, relationships, and communications.
Best practices for the networker:

- Being transparent: takes courage, can be in many forms (small things like a summary
of a dialogue)
- Building relationships
- Opening the door
Guidelines for sustainability reporting usually link stakeholder engagement to the selection of
important (or material) topics:
- Stakeholder inclusiveness: who influences us and whom do we influence? (who)
- Can be prioritized by plotting them in a matrix
- Materiality: which themes are important for us and our stakeholders? (what)
28
- Current topics might be known, it is very interesting to also share the topics
that you envision becoming more important in the years to come with your
stakeholders in a central stakeholder dialogue.
- Materiality matrix: useful tool to generate an overview of topics and to
prioritize them on importance and impact. The interest of the stakeholders are
plotted against the impact of your organization.
- To create the matrix, you first set up central stakeholder dialogues,
using a structured process to determine and prioritize the material
topics.
- To note the outcome of this process, an independent third party is
recommended.
- You can also find standardized materiality maps (SASB) which
identifies sustainability issues
- Responsiveness: how do we respond to material issues which are important to us
and our stakeholders? (how?)
- There is a difference between existing processes around certain topics and
new processes that respond to stakeholders and integrate new topics into
strategy
The learning Networker

Signaling issues early on
Unexpected and new material issues can always emerge in structured dialogues. They
develop from early issues: issues that are either less clear or are more likely to manifest
themselves in the future and have been overlooked by both the company and its
stakeholders.
- These topics are not part of the regular conversations, as these are more focused on
current and urgent topics.
- An early issue (f.e. triggered by a news item) can suddenly turn into a hot and
material topic
The risk of unexpected material issues cannot be entirely eliminated, but this might reduce it:
- Detect early issues under the surface by actively asking stakeholders (engage a
limited number of stakeholders)
- Search for early issues that can blow over from abroad or from other sectors: find
and appoint an owner for such issues locally to discuss in more detail
- When issues suddenly become urgent, do not fall into the trap of going for the quick
solution: first, assess its coherence with the company and material topics and weigh
it against long-term interests.
- Transparently and proactively, show how interests and early issues of different
stakeholders are taken into account in policy and decisions.
By proactively organizing early-issue signaling in your Network role, you can make an
important difference.
The unattractive dialogue

There is always room for improvement in stakeholder dialogues. You want to avoid important
stakeholders staying away from the table because they do not expect to get anything in
return for example.
29
- Stakeholder engagement demands thorough planning, a comprehensive

assessment of whom you want to engage with, what you want from the stakeholder
dialogue and what you offer in return
- Stakeholders might feel like they have a very instrumental role or neglected after they
have participated. You may have to accompany some connections within your
organizations (Connector role)
- The use of statements is very valuable in such conversations.
- For stakeholder engagement to be effective, it is essential to build rapport between
people. Invest time in engaging with the people that represent our stakeholders, build
mutual trust. It takes time, personal contact and a willingness to listen.
The successful Networker

- It is very tempting to manage by numbers, so you can show your stakeholders good
results, clear progress and how serious you are. The real challenge is to really
engage your stakeholders, build a trusted relationship with them, based on true
transparency and in which you have the courage to be vulnerable
- The business network has enabled me to work with other companies in the program,
creating new markets and insights for our business and contributing to the SDGs and
our purpose. In the Network role, I convinced other partners to join.
Tips for Networkers

- Actively build or join a network that can help you achieve your goals
- Have influential stakeholders engage in conversation with key people in your
company to share how sustainable business can generate positive value for your
organization
- Engage stakeholder proactively
- If stakeholder engagement processes are in place, investigate how best to
join these processes
- Reduce fear of transparency within the organization, highlight the benefits of sharing
- Be aware that building and maintaining your network and engaging stakeholders
requires a human touch. It is all about people, relationships and communications
- Be honest about what stakeholder can and cannot expect from you and your
company and admit if you don’t have the answers (yet)
- Stay focused on the long-term goals
- Always make it clear what will be done with stakeholders’ input (feedback)
- Allow stakeholders to influence the way in which your company defines and fulfills its
social responsibility
- Do not just pay attention to dissatisfied or angry stakeholder, but also to positive
stakeholders
- Be alert to issues under the surface and early issues
- Be aware that there might be relevant issues that do not (yet) have an owner
- In the case that your sustainability report will be externally assured, do invite your
accountant to the stakeholder dialogues
- Stakeholder engagement and internal/external networking is a continuous process
that requires time and careful attention
- When stakeholders have conflicting interests, bring them together for a joint
conversation
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- Know how to choose your partners and show openness and commitment to the
partnership
Chapter 3: The Strategist

As a CSO or sustainability manager, you are responsible for the development of a
sustainability strategy and (partially) for integrating this strategy into the overall strategy of
the organization.
- An important task in the Strategic role of the sustainability manager is creating a
sustainable vision and mission and embedding this in the overall strategy
- The scope of the Strategic role is determined by the space you get within the
organization to exert influence
Sustainable value creation

Vision: describes how a company looks at (future) society and which role it wants to play
within that society
Mission: makes that role concrete; sets the point on the horizon that you want to reach
Strategy: displays the way to get there and makes the vision of the future solid by attaching
goals to the mission.
Sustainability strategy: focuses on creating sustainable value
- There are increasing numbers of books and articles that explain what sustainable
value creation is or should be
- Back-casting: a type of creative thinking that starts from the desired end
results, asks how it is possible to get there and translates this into an action
plan
- Practical way to create a sustainable value strategy is to combine societal needs
and your stakeholder interests with the core business and resources of your
company, guided by the moral compass of your mission and purpose
A company has a wide range of means to create sustainable value and thus contribute to
society:
- Economic power: to produce new sustainable products/services
- Political power: rewrite the rules of the game by developing new codes of conduct
- Business assets: buildings, sites, materials, networks, (non)financial resources,
employees, customers and media
For existing companies, transformation processes and systems change often take years.
There are various models that describe the different steps a company goes through in the
transition towards sustainable value creation.
Three stages of the degree to which sustainability has become a core concern of the firm:
1. Compliance stage
2. Efficiency stage
3. Innovation stage
Signaling trends
The strategy department is in charge of the process to create the vision and mission. This
process is fueled by external trends and developments (both ways). The sustainability
manager should provide relevant trends and topics of the stakeholders:
- Explicitly ask stakeholders what they see as future/relevant topics
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- Annual reports of similar companies
To provide general societal trends, you can make use of trend reports:
- Sustainable Development Goals (SDG): the most relevant global sustainability
topics.
- There are 18 goals, of which a selection can be relevant in the context of the
current and future activities of your company (opportunity/risk)
- World Benchmarking Alliance (WBA): identified 7 vital system transformations to
accomplish the 2030 agenda and listed the industries that are particularly important
for driving each transformation
- The SGD Compass: provides guidance for companies on how they can align their
strategies as well as measure and manage their contribution towards the realization
of SDGs
When you already have a vision and mission, you can explore how society is changing and
how the company can connect its core activities to a societal role in these changes (healthy
aging for pension funds).
- Ideally, the company vision and mission are aligned with the sustainability vision and
mission.
The sustainability manager is also in charge of the process besides providing relevant
sustainability topics and context.
- Map what sustainability activities are already taking place within the company
- Set a realistic yet ambitious sustainability goals, both in increasing your positive
activities and in reducing your negative impacts (CO2 emissions)
Simon Sinek’s Golden Circle: when creating a vision and mission, the
matter of ‘why’ quickly comes up
- Most companies know what they do
- Many companies know how they do it
- Only a few companies know why they do it (what value they add to
society)
- These companies are the ones that inspire and attract
clients and talent, so companies should think from the
inside out and start with ‘why’
The lack of ‘why’ can cause it to become difficult to clearly tell the story
behind the conviction.
The answer to why can be divided in two categories:

- Intrinsically motivated
- Business-case driven
You may not have to choose between this. It is a great proposition to have a strong business
case, also when you are intrinsically motivated. In addition, a sustainability strategy initially
based on a business care or extrinsic factors can lead to intrinsic motivation or vice versa.
Sustainable Value Framework: can help to develop and substantiate a strategy. From
whatever perspective or motivation, the sustainability strategy shows a clear win-win in each
quadrant
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Four core dimensions of a sustainability strategy with different links to company

performance and value creation for stakeholders:
- Growing profits and reducing risks: through preventing waste in current operations
(eco-efficiency measures)
- Enhancing reputation and legitimacy: through stakeholder engagement and product
life cycle improvements (sustainable business)
- Accelerating innovation and repositioning: through the development and use of the
next generation sustainable technologies (clean technologies)
- Crystallizing the firms’ growth path and trajectory: through co-creation of new
business, focused on serving needs of those most needy in society
Ideally, companies operate in all four quadrants supporting a more holistic approach, but you
do not have to. It is important for CSOs to realize that, to act more sustainably, companies
and people can be motivated by different reasons.
Sustainable value creation in practice

The primary business drivers for sustainability often relate to the level of maturity of
sustainability in a business. There are three groups of business benefits, in order of level of
maturity of sustainability in a business (from low to high)
1. Risk management and reputation:
a. Avoiding negative media coverage or negative feedback from stakeholders
b. Actual operational risks (extreme whether effects due to climate change)
2. Productivity issues:
a. Less water and energy: saves money
b. Renewables: saves money
c. Attracting and retaining talent
3. Contributing to growth:
a. Constant innovation
b. Building of brand - next generation of consumers (Greta Thunberg)
One can also measure level of maturity of sustainability by involvement of different
departments during the years (from low to high)
1. Legal department: regulatory compliance
2. Communication team: reputation management
3. Supply chain team: cost and delivery disruption
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4. Finance team: productivity and investments

5. Brand team and marketing: brand equity
6. Commercial sales: customer engagement and growth
7. Board and shareholders: future resilience
The learning Strategist

Two-pronged approach: an intrinsic conviction joined with an economic business case for
sustainable business
A change of board of CEO is always a moment of recalibration of the business strategy. A

CSO should be extra alert. Make sure that sustainability is not removed from the list (not
explicitly mentioned in the strategy). Good operational performance is a condition for
sustainable growth.
The successful Strategist

Business/corporations are extremely important when it comes to accelerating transitions. A
successful strategist navigates his or her business towards creating sustainable value for the
company and for society.
Companies can use their assets in a way that makes economic sense and contributes to a
sustainable world.
- Big companies lead by example through their innovative and economically sound
renewables policy. Big companies can be the frontrunners of transitions, and as soon
as other companies see it as sound economic policy, it will be an unstoppable trend.
It already is, we are beyond the point of no return.
Tips for Strategists

- Adjust your strategy role to the space you are granted within the organization
- Develop a sustainability vision and mission aligned with the corporate ones. Find the
‘why’.
- Look at the current corporate vision and mission through a sustainability lens
- Explicitly highlight positive developments and subsequently assess the risk and
opportunities
- Make use of existing methods in a company (if you are starting a separate strategy
process)
- Do not get distracted by the different expectations about what the vision of the
company should be
- Be bold and ambitious if you can
- Choose a more practical approach if the organization is not ready yet for an
ambitious vision
- Increase the level of maturity of sustainability by building on various business drivers
for sustainability
- Ensure you are at the table when a strategy revision process kicks off
- Engage other people in the development of your vision and mission
- Where considering the creation of a separate sustainability vision and mission, weigh
the costs in hours and energy against the expected benefits
- Use your company’s assets in a way that that makes economic sense and
contributes to a sustainable world
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Chapter 4: The Coordinator & Initiator

Coordinator & Initiator role: an important task of the CSO is to support the organization
and its different departments by initiating and embedding sustainability in the governance
and organizational structure of an organization.
- You are aware of the changed sparked by the sustainability strategy
- You organize, coordinate and facilitate departments, people, processes, change and
projects to deliver on the strategy using the governance and organizational
management structure
The strategic framework or sustainability plan

To turn the vision, mission and strategy into action, most companies create a strategic
framework. Usually include:
- The key topics or areas on which progress is needed
- The principles or frames based upon which action will be taken
- The key performance indicators used to measure results
- The baseline/starting point and the goals to be achieved
Based on these elements of the strategic framework, departments and teams within the
organization can create their own plans to achieve the goals, using measures.
- The CSO will adjust the level of detail and concretization so that it will fit into the
regular strategic planning:
- Decentralized: less detailed framework than in a centrally led organization:
(less content-driven, more process-drives)
To further increase supportive action, it is important to translate the strategic framework and
the goals into other governmental elements (job description/appraisal processes). It takes
quite some coordinating power to safeguard that the sum of all derived plans add up to the
intended strategy and results.
- It is key to make the framework as clear as possible
- Effective target setting requires being clear on the exceptions
- Coordinator role will take more time when sustainability is not integrated into
corporate strategy
- Using the same language (formats and expressions) will facilitate integration and
embedding of sustainability into the organization activities
The following five S’s can be used to embed sustainability in the organization:
1. Stakeholders
2. Strategy (leadership)
3. Support (values): internal backing and the softer elements of change (shared
values)
4. Structures: the way in which the company is organized and governed
5. Systems: the way in which the company is supported (processes/technologies)
As a coordinator, be aware of changes of these 5.
Departments and people are ultimately responsible for the implementation, but as a
Coordinator, you are dependent on their appetite for change and speed of implementation.
You can initiate or accelerate change by carrying out select sustainability projects
(pilots/temporary activities) yourself. This can be especially useful when:
- There is a lack of capacity, capability or priority in the current organization
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- The focus is on new sustainability topics

- There is a need for an appealing iconic project to show how sustainability leads to
success
When the pilots are proven successful, they are rolled out and owned to other parts of the
organization. Golden rule among sustainability professionals: if you cannot find a business
owner within 3 years for a project that you initiated, you should stop the project.
- Carrying out projects yourself do not just initiate change, but also offers opportunities
to strengthen your internal networks
Making plans, implementing and embedding in practice

Throughout the years, the sustainability goals became increasingly concrete or larger in
scale: each topic at its own speed, due to:
- Increased insight into different waste streams over time
- The growing availability of solutions that could help achieve the goals
- An increase in the number of partners willing to contribute to solutions
- Difference in local color
Good target setting is a very important process if you want to create sustainable success
- Most companies adhere to the rule of ‘underpromise and overdeliver’, but that will not
get you the best solutions and change needed.
- Has to be a realistic stretch: enough challenge and realistic at the same time, with an
inspiring vision
Footprint, Handprint and Blueprint: the dynamics of Dow’s goal setting over the years
- Footprint: 1995-2005: first goals were set on energy and safety to prove the point
that sustainability adds to the triple bottom line: environment, social, economics
- Handprint: 2005-2015, another set of then years goals were set on products
- Blueprint: 2015-2015: goals to lead and solve public problems
Identifying opportunities
Changes can also pose opportunities. Each change provides opportunities to bring
sustainability into the conversation and to assess how it can best be integrated into the
organization.
- The more change there is, the faster sustainability can be integrated into the
organization, but it does require the CSO to actively seek opportunities
- A limited budget can be an important strategic decision intended to speed the
integration of sustainability in the business
- A limited budget can undermine the credibility or standing with the organization
The structure and size of the sustainability team need to be in line with what is required to
further the integration of sustainability into the business. This depends on how the company
is structured already. There are 3 phases to integrating sustainability;
1. Initiation: related to the level at which the company has the basics of sustainability in
place.
a. Time spent on generic embedding activities
b. Sustainability is quite small (CSO might be a part-time role)
2. Development: related to the level that a company is on its way towards fully
embedding sustainability
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a. Team efforts become more specific, since it’s clearer what the organization
needs
b. Knowledge and innovations are developed and transferred to the organization
3. Maintenance: related to the level at which CSR is fully embedded within the
organization and the company is an industry game changer through sustainability.
a. Sustainability efforts are led and implemented by the existing organization
b. Authority of the CSO grows and responsibilities change
The structure, efforts and location of the sustainability team in the organization also need to
be aligned with the way in which change is managed at the operational level. The structure
and size of the sustainability team also depend on the portfolio of sustainability activities for
which the team is responsible.
When sustainability objectives can be achieved through a limited number of projects, then
usually only a limited number of the employees are involved as well. Further integration can
be achieved by embedding sustainability into different support systems such as
procurement, client services or HR.
The learning Coordinator & Initiator

- The ultimate effect of the Coordinator role is very much dependent on finding
effective interventions
- The CSO has to deal with the pace of change. The following interventions might help
to achieve acceleration:
- Expand the Initiating role by carrying out project or starting activities yourself
- Position the sustainability department at a place in the organization where
you can exert the most influence
- Set up a good information system to proactively put sustainability on the
decision-making tables: a great deal of information can make faster
embedding possible
- Deploy professionals with the skills required for accelerations: also put
together a diverse team in terms of drivers, know-how, competencies and
roles
The successful Coordinator & Initiator

The following practices describe how the Coordinator role can effectively make use of
sustainability information. The working of different measuring instruments such as LCA,
(external) uses and collection of sustainability information are further explained in Chapter 8.
- Focus and organize sustainability in accordance with the largest impact: the scope of
responsibilities and resources has evolved as corporate sustainability has evolved
- Use self-assessment to determine your next step: maturity models can help
determine your next step. ey show how far sustainability is embedded and which
subsequent steps must be taken
- Introducing carbon fees to accelerate business ownership: a very effective
instrument to accelerate business ownership is the internal carbon fee because - if
the fee is high enough - it holds business divisions financially responsible for
reducing their carbon emissions
Tips for Coordinators & Initiators

- Ensure that what the organization needs to achieve is crystal clear
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- Find an owner for each topic and objective, so it is clear who is responsible and for
what
- Translate the objectives towards the entire organization, so everyone can contribute
through concrete action and innovation
- Change ‘underpromise and overdeliver’ into ‘smart risk-taking culture’ when it comes
to sustainability
- Make use of existing methods for strategic planning and implementation
- If you want to achieve results or showcase innovations fast(er), consider carrying out
a few sustainability projects yourself
- Force the existing organization to actively engage by funding a maximum of 50%
from the sustainability budget
- If you cannot nd a business owner within three years for a project that you initiated,
you should stop the project
- Be aware that a company is always in the process of changing
- Be alert to changes in strategy, structure systems
- Use patience and intuition to determine when to go with the flow and when not.
- Adjust the structure and the position of the sustainability team as needed
- Understand how your company works and whom or what you need to get things
done
- For multinationals consider local conditions
- Establish a good ow of information
- Do not just involve those people willing to contribute, but also the people you really
need
- Professionalize the sustainability organization
- Use a maturity model to assess the progress you have made and where you would
like to take your organization
- Trigger business ownership with effective instruments
- Understand the language of nance since this is the most important department if you
want to achieve results
- Be the three P’s: patience, passion and perseverance, and then add the C of charm
Chapter 5 - The Stimulator & Connector

The CSO:
- Motivates, stimulates, inspires and motivates others to integrate sustainability
objectives into their roles
- Builds bridges between the outside and inside
- Connects things in ways to speed up more sustainable business practices and
usually achieves this without formal authority
- Generating support
Why does sustainability need support?

If there is insufficient support and the responsibility and initiative are left with a very limited
number of people, there is a risk of the sustainability strategy evaporating with just a few
personnel changed.
- The more employees feel engaged, the better sustainability will be embedded and
the higher the profile of sustainability will be
How to generate support?:
38
- 40% depends on structural elements: reporting, checklists, e-learning tool, codes of

conduct and audits
- 60% depends on non-structural elements: the organizational culture, mindset, and
behavior of the employees
- Stimulator & Connector focuses on these non-structural elements, by creating
an undercurrent of new ideas within your organization and stimulate
employees to implement these ideas themselves, which does not happens
spontaneously
Stimulator & Connector role: understanding the business objective, building trust and
support, creating crucial and cross-functional connection to embed sustainability into
operations and strategies
- It is different from the Coordinator role, which focuses more on the structural aspects
of integrations
- Stimulator focuses on cultural aspects, generating support without formal instruments
- Successful implementation of sustainability requires a fine balance between these
roles; balancing structure, culture and behavior
The next conditions (both structural/cultural) help to create the optimal conditions to be
effective in the Stimulator role:
- Senior management support of sustainable business: underlying intentions need to
be clear, promoted, and embedded in every department, so that employees feel
connected
- A vision in which the why (or need) for sustainability is established
- Key external and internal stakeholders have been engaged in the creation of the
visions/strategy
- Sustainability is organized in such a way that it triggers initiatives from within the
existing organization and leaves the responsibility for implementation there as well
- The CSR manager acts in an open, social and communicative manner, which
facilitates the organization and creates goodwill
- The CSR manager makes drivers or intentions behind employee behaviors visible
- The CSR manager creates a sustainable ‘winning team’ undercurrent in the
organization by:
- Providing a stage to colleagues who have achieved results
- Bringing an external point of view into the organization to support a key
argument
Support is not all you need. It also needs to become clear what employees can do
themselves within the scope of their own roles.
39
To generate support, you can never ‘over-communicate’ on sustainability.

Effective communication: tone at the top, credibility, relevance and repetitions are all
important
- Tone at the top: enable senior leadership to frequently and actively speak on the
importance of sustainability inside and outside the organization
- Credibility:
- Always communicate intentions and drivers, not just results
- Be consistent in your sustainability messaging as an organization
- All sustainability measures also need to be visibly implemented at board level,
to make the tone at the top credible
- Relevance:
- Communicating is hard work; prepare well for each communications
opportunity
- Choose carefully the projects you want to communicate: they will not all be
equally relevant
- Self-reflection and humor are a must
- Repetition:
- In sustainability communications, repetition is key. Even though there are
people who say they are fully aware, the majority will keep asking why we do
not share the positive sustainable news more often
- Repeatedly use the same concise model or visual; indicate where something
fits in at a higher level and yet make it more concrete and easier to
understand
- The terms ‘CSR’ or ‘sustainability can be meaningless; spend time clarifying
what you mean
The internal sustainability network

You also need internal support from people at key positions in the organization, next to the
engagement of external stakeholders.
- These people can offer informal support when things do not progress through the
formal channels and can also be key sparring partners to help define how to continue
and progress
- Access to information is crucial
- Provides an extra set of eyes and ears, making them crucial in driving sustainable
change, give feedback and information about what is really going on
- Intrinsically motivated
Sustainable behavior
Everyone can say they will act more sustainable, but that does not mean that people will
actually do so.
40
- 90% of people’s behavior is unconscious, so when trying to change behaviors, it is

important to know which are the drivers underneath the unconscious behaviors:
- Going for short-term gains
- Maintaining a positive self-image: act sustainable
- Competition, direct feedback, ease and habits
Unilever's 5 levers for change: consider using these levers in your activities and
communications
1. Make it understood: awareness and acceptance
2. Make it easy: convenience and confidence
3. Make it desirable: self and society - positive self-image
4. Make it rewarding: proof and payoff
5. Make it a habit: reinforcing and reminding
Values can be a strong compass towards a sustainable business strategy, especially when
they originate from their founders and are embedded in the mission or purpose. Other
symbolic forms and activities accumulated over time shape an organization’s unique identity
and character (myths, rituals, humor).
- Involving so-called company heroes to generate support for sustainability plans can
be very effective
- To come up with a plan, you have to understand your company from practice
Generating support in practice

- Asking many questions and really listening to the answers helps to generate support.
There are many reasons why employees don't or do want to behave more
sustainably, but by asking questions you may find out.
- Estimating what the other needs is usually quite an intuitive process; really listen to
others and to explore what the situation really requires. Personal drive can get in the
way
- You cannot have a personal conversation with everyone: translate it into a more
general principle: always strive to really understand your target group
What’s in it for them?

- Understand what sustainability means to your colleagues
- It is important to offer a very concrete call to action
- Everyone has personal nurms
Establishing and maintaining internal support is key in this role:
- Taking stock through your network of whether there are people or groups already
working on sustainable change
- Peer communications is really effective
- People are encouraged to submit sustainable ideas through internal communications
- There are many other ways to steer employees
The learning Stimulator & Connector

Structural elements can open the door a little, but actual support is only created if you can
really make the other person enthusiastic. It is always a challenge to maintain support and
attention for long-term sustainable goals, because the daily activities already require more
attention, especially with middle management.
41
- If things in daily activities are not going well, sustainability becomes an ‘add-on’
instead of another, inspiring way of working
An extra difficulty is the vulnerability of internal support: if someone changes jobs/leaves the
company, their support is gone and you have to start all over again. In such a situation it
helps if the structural elements are in order, but there should always be a mix between those
two.
Important tips to overcome obstacles:
1. To create executive sponsorship and recognition: it should be in the company or
organization’s DNA
2. To make the CEO accountable: they should be the ones who makes the
announcement about new commitments or achievements
3. To look further than one’s own company’s needs: find new partners and share
lessons learned
4. To use R&D, technology and operations to test new solutions
5. Have a solid and appealing story when explaining why renewable energy should be
supported
The successful Stimulator & Connector

Mission Zero: sustainability program that empowers people to use both their expertise and
their passion in contributing to the mission to become a restorative company on three levels:
1. Level 1: introduction training for new employees understanding what sustainability
means, understanding different aspects
2. Level 2: comprehends a team session on functional level
3. Level 3: not only a training program with colleagues from different departments, but
also includes writing a paper/proposal (needed to become a Sustainability
Ambassador)
The result is a significant internal involvement among employees at all levels, giving them
space to help realize the company’s sustainability goals.
Informal meetings helped to generate support, besides competition and engaging internal
sustainability networks and volunteers:
- Inspiring lectures
- Ideas competition
- Network session
- Speed dating with board members
- Interactive panel discussion with the public
- Information about latest sustainable initiatives
- Thematic and practice-oriented workshops
- Informational quiz
Social intrapreneurship: means that an organization offers space to employees to behave

as entrepreneurs in a social way.
Corporate philanthropy: to make a contribution to social projects in a more structured and
coordinated way, companies often choose to start a Foundation that supports social projects
by donating money or employees’ time, or both.
Tips for Stimulators & Connectors
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- Learn from others how they generate support

- Focus the generation of support on a few key people who want to have and can have
real impact
- Consider whose help you need to get something done
- If you are just getting started with sustainability as an organization, create a platform
to give credits and visibility to people
- Be aware that your intrinsic motivation and engagement with sustainability can be a
pitfall
- A video has probably more impact than figures and data
- Capture 3-5 most important sustainability facts on the back of your team’s business
cards
- You can never over-communicate on sustainability
- Communicate hard, factual and understandable results
- Share achievements by colleagues from the entire organization
- Use humor and search for the ‘hook’ to catch attention
- Do not expect miracles from communication
- ‘Just do it’ is a great mantra for some behavioral changes
- If you ask for suggestions and ideas from other, make sure you can follow up on
them
- Be alert to the vulnerability of internal support in a changing organization
- Use and appealing and relevant project to showcase how important sustainability is
to the company
- Make an eort to really understand your company and its dynamics from different
perspectives and to nd the right mix of interventions
- Consider aligning the position and orientation of a Corporate Foundation to
sustainability goals
- Be “light”, always nd or celebrate a win
- Dedicate time to your Stimulator & Connector role, but do not let this fully occupy you
Chapter 6 - The Mentor

Mentor: engage others, through offering support and coaching
- Gathering information and ensuring that people are informed about and discover the
relevance of sustainability to their role and function in the organization
- Crucial to know how to translate sustainability to different functions in the
organization and what tools are available to make jobs and tasks more sustainable
- You can only support people if you have some insight into their role and job
- Continuously adjust your mentoring style to different situations and colleagues (can
be done by cross-functional experience)
Difference with the Stimulator role is that the Mentor works on an individual/functional level,
whereas the Stimulator focuses on engaging people on a general organizational level.
Integration of sustainability on a functional level

By analyzing the key business processes and considering which ones will be subject to
sustainability-related changes, you can draw up a plan for the further integration of
sustainability into the organizational functions
- Map those processes in detail and consider which will be the subject to change
43
- A workshops/individual meeting can help an employee to determine how he can

contribute in his role
- The actual workshop process is just as important as the results of the
workshop
- Different skills and competencies will be needed to complete the anticipated
transitions successfully
- As a Mentor, you have to support the translation of sustainability for all functional
areas (HR, Sales, Operations etc).
- You have to note and be capable of relating to every job level from the strategic to an
operational level; each function has different job levels
Sales, Marketing and brand

Embedding sustainability in the marketing team and brand is an important step in the
maturity model for integration of sustainability in an organization.
- When market research and/or customer surveys show that clients will buy
sustainable products and services, you can convince the marketing team
- Without those numbers, showing your own conviction might help
- Key to show that there are others ways sustainability can add value (positive impact
on corporate reputation)
- Effective to research expectations client have around sustainability, to translate
sustainability to a relevant product innovation
- Stimulating customers to demand more sustainable products/services
Personnel and HR
Sustainability can contribute to the development of a social sustainability strategy. Identify
social aspects of sustainability:
- Diversity policy
- Long-term vitality and employability of people
- Opportunities for people with limited access to the labor market
Sustainability is an useful and smart instrument for HRM:

- Useful: sustainability leads to organizational engagement, employee satisfaction,
motivated and inspired employees and lower staff turnover
- Smart: it helps to attract and retain talent
44
- Sustainability goals and behavior can be included in instruments such as appraisals,

performance reviews, codes of conducts, core values etc.
- By fully embedding sustainability in HR processes, new and current employees
immediately become more aware of the company’s ambitions and the expectations of
their role and competencies regarding sustainability.
- Include HR in the formal and informal organization of sustainability
Finance and control

The finance function can play a role, for example, in developing metrics for the sustainability
objectives and KPIs, assessment of sustainability elements in investment proposals,
including sustainability data and achievements in annual reports (in the reporting cycle)
- Should include sustainability in the strategic framework, planning cycle, as well as
the annual and quarterly updates and meetings
- Including sustainability in investment proposals, gradually increases commitment.
- The value of sustainability for finance varies in every company
- Sustainable investment strategies require financial skills to at least understand their
impact on the total financial portfolio and resilience of a company
- CSO needs to understand finance and relate to the CFO on a personal level
to get support
- Need to be creative and to build your business case
- Requires different skills and new ways of working from the finance
department (new business models)
Public Affairs and communications

Both external and internal communications can contribute to people becoming more aware
of the sustainable choices they can take, which can result in a more positive image of the
company or product.
Two approaches in convincing the communications team:
- Newsworthiness: package verifiable sustainability facts in such a way that they
become newsworthy
- Clear messaging: detailed and very nuanced stories are not usually effective more
engaging
It is challenging to communicate continuously about sustainability:
- Frequent touch point: physical locations that are frequently visited or seen by
clients or staff (coffee area/websites) - use this to continuously communicate
- Communicating sustainability is about repetition
- Storytelling is the most powerful when you share the full story, including daring to be
vulnerable, sharing dilemmas and things that did not go so well as planned
Public affairs plays also an important role in the integration, due to its relationship with key
stakeholders and its lobbying activities.
- It is a key source of information for the CSO
- It is an important communications channel towards relevant stakeholders
- Can also add sustainability to the agenda of networks/organization/committees which
are relevant to fulfill the sustainability ambitions
Procurement (inkoop)
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The influence of procurement managers should not be underestimated as they know the
market better than anyone else and are aware of potential sustainable alternatives.
- Proactive sustainability approach to procurement is a key opportunity
- Value of sustainability for the procurement manager is highly dependent on the
relevance of sustainability for business and management
- It is important that procurement teams have relevant and up-to-date information
about the suppliers
- Depending on the ambition of the company, as a Mentor, the CSO may work closely
with procurement and suppliers, not only to minimize risk but also to create
sustainable value, which requires the establishment of long-term partnerships
- Takes clear agreement on monitoring and steering the partnership
For companies with limited innovative capabilities, most sustainable innovations will have to
come from suppliers. It can be helpful to proactively find out which type of product/services
need to be purchased/co-developed during the coming years, so that you can anticipate and
create more time.
- Pareto principle: with 10-20 large projects, you can probably impact 80% of the
purchasing volume.
- Many suppliers also have a sustainability strategy which can create opportunities
IT
- On one hand, IT infrastructure such as computers and servers and IT-related
activities are a significant source of energy use, greenhouse gas emissions and have
a social impact
- Computers generate heat and it often takes as much energy to cool computing
equipment as it takes to run it.
- On the other hand, IT can be a successful enabler in reaching the corporate
sustainability goals (smart energy-saving software/machine learning)
Operations and QSHE (Quality, Safety, Health & Environment)

Operations: the core manufacturing process, the way in which input is transformed to output
in the most efficient way
- Create sustainable success through energy efficiency and waste-management
programs, connect and strengthen them
- Sustainability must be integrated in the core manufacturing processes (efficiency
improvements, cost reductions, compliance, but also credibility and reputation of the
organization)
As employees in the manufacturing process usually have useful ideas about opportunities
for improvement, the Mentor role should be a facilitating role.
Depending on the type of company, there could also be a QSHE team or manager, looking
after quality, environment, safety and health and compliance with relevant regulations in
those fields.
(Internal) logistics
The logistics department plans and organizes the flow of goods through an organization.
Critical success factors include speed, reliability and the lowest costs possible and
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efficiency, which perfectly aligns to sustainability-related goals around the reduction of

emissions.
In the Mentor role, it is important to work with logistics (which can be outsourced) in order to
have them - and procurement - integrate sustainability criteria into their procurement
processes
- The way in which you use and order goods in your own organization has a direct
effect on the logistics side of your sustainability plan (daily deliveries vs monthly
deliveries)
Facility management manages, simply put, the household of a company, so that every sta
member has all the services and resources (facilities) at his or her disposal to be able to do
the job well (catering, cleaning, heating etc).
- It is crucial for the CSO to cooperate with facilities to embed sustainability in every
supporting process
- Small-impact but very visible innovations (reducing plastic in the canteen, reusing
office equipment)
Mentoring in practice
How do you introduce sustainability to the daily lives of your colleagues to make your
organization more sustainable? If your colleagues experience sustainability as a natural part
of their specific role, you have succeeded and generated broad support
- Give workshops that enable people to translate sustainability to their own role and
area of expertise
- Publish cases and information on the intranet, LinkedIn or other social media
- Make the sustainability team very accessible, by making clear who the team is and
how they can be reached
The learning Mentor

Really actively recruiting and recommending is necessary to promote the workshops, which
asks a great deal of capacity
You can ensure the inclusion of sustainability criteria in procurement by integrating it into
each step of the sustainable procurement process.
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The successful Mentor

It takes time and in-depth knowledge of the business to be a successful Mentor, but it can be
a tipping point in embedding sustainability in an organization.
- Brand management is crucial to accelerate the integration of sustainability in the
business, especially when it is a consumer-facing business
- The Mentor role of a CSO in procurement can be intensive, as it needs a good deal
of research and training if you want to involve the entire supply chain. It is important
to bring benefits:
- Collective resources
- Same requirements for the supply chain
- Covering all (complex) parts of the supply chain
Tips for Mentors

- Analyze the business processes to determine which sustainable changes have to be
made in functions, activities and tasks
- Per function, show how sustainability can enrich it
- Provide concrete examples of how sustainability has been translated for that
departments
- Let people define for themselves how they can contribute in their own role
- If you develop a process of co- creation with a wide circle of your internal
stakeholders, you will dig up the in-depth knowledge necessary to operationalize and
embed your policy
- Make sustainability personal
- Every type of motivation is good, as long as it leads to more sustainable behavior
- Make it fun
- Consider how sustainability can help the other person grow
- Leverage the power of storytelling
- Use a structured and project-driven approach to increase your effectiveness
- Invest in growing your own knowledge about the functional area and language of the
target audience
- Linking sustainability to your brand strategy will lead to the sustainability agenda
becoming one with the business agenda
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- It is OK to say you don’t know the answer either

- Be creative
- Aks many questions and do not make any assumption
- Be patient
- Do not depend on just one person in each team, but broaden the engagement
- Let people share the story with each other
- Keep communicating and sharing the successes to increase engagement and
participation in workshops and e-learning
- Make sure people feel they are welcome to consult the sustainability team
Chapter 7: The Innovator

Innovator: the CSO challenges others and him/herself to ‘innovate’ for sustainable
development
- Show leadership and courage
- Able to find and develop sustainable innovations with impact, by combining a
cross-functional way of working with external orientation.
- Partnership in the value chain are a key source of innovation, but there are also
sources outside the value chain as well
- Innovator needs the trust of the organization
- Embed sustainability in the innovations process in such a way that all innovations are
sustainable or lead to sustainability-related improvements
- CSO should be aware of innovation trends and their possibilities and impacts
The challenge for the CSO is to know what to prioritize and to find business owners for the
ideas or innovations in the funnel.
Sustainable innovation process

Innovation teams are driving future procuts, operations and future business models. By
embedding sustainability in innovation and/or design teams, business will develop in a
profitable and sustainable way, based on the needs of society.
The CSO can stimulate sustainable innovations in two ways:
1. Make every innovation more sustainable
a. Begins by making sustainability the starting point for the selection of ideas in
the innovation process
2. Driving sustainable innovation
a. Embed sustainability criteria in every selection step along the way
b. When the analysis shows that the expected sustainability results can be
achieved, a well-substantiated action plan can be developed
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- The weighting of sustainability in the different stages is determined in collaboration

with the innovation manager (sustainability can be a minimum requirement, or the
most important criterion).
Your tasks as an Innovator is to determine how you can make every innovation sustainable.
There are three ways to do this:
1. Investigate how and where innovations come about in the company
2. Consider how sustainability can be used as a starting point
3. Integrate sustainability into implementation plans for innovations
Sustainable innovations are generated only when those innovations that result in (more)
sustainable products and services are stimulated and selected.
- The CSO manager has to find out whether the company has an innovation process
or not
- If it does: making products and services more sustainable can be set as a
target
- If it does not: as a CSO, you can initiate one
In reality, there is quite a mix of making innovations more sustainable and driving
sustainable innovations
- The CSO therefore has to be flexible and apply different approaches and
interventions, intuition and entrepreneurship
Initiating innovation
There are many ways to structure the innovation process. It is key to know what is in place
and to assess whether this will deliver the innovations needed to achieve the sustainability
goals/strategy.
McKinsey’s three horizon model: differentiates the following kind of innovations projects:
- Innovations within the existing organization and with external parties focused on the
1st and 2nd horizon (making current products more efficient and renewing the
product offer)
- External innovations focused on the 3rd horizon (creation of new products/services
as well as sustainable business models)
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- Horizon 1 and 2: optimization and renewal

- Often generated by employees and usually integrated into the corporate plans
of the current organization
- Key role for Innovator: create an open environment where ideas can flourish
and be implemented
- Sustainability team regularly receives ideas and improvements from others
with the request to provide comments and tips
- It is helpful to have a sense of urgency for sustainable change within the
organization
- Stakeholders are a source of inspiration and innovation (co-creation, renew or
optimize the product portfolio)
- Horizon 3: creating new products and services
- Can be a challenge, because the increasing complexity of the external
surroundings and the risk-averse of large companies
- Innovate outside the limitations of their own company by investing
money/resources in start-up ventures with relevant third horizon innovations
Smaller, visible experience innovations vouch for the sustainable nature of the company or
products. It is crucial to include some of these types of innovation in your portfolio.
Innovations can have two effects within organizations:

- Impact: large-scale, sustainable improvements
- Visibility: proving that sustainability is in the DNA of the company
Key tasks as the Innovator are:

- To keep the long-term perspective
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- To be persistent: sometimes it takes time to prove the value

- Thinking from the outside in
Initiating and guiding innovation in practice

Innovation is crucial to be able to address the changing needs of society and to continue to
add value in social, environmental and economical ways.
- Visible innovation: reuse of materials, can be serving trays created out of outdated
railway schedules, bags made out of recycled upholstery from the train seats
Sustainability is about understanding the constraints and opportunities around you and turn
them into opportunities
The learning Innovator

The Innovator role is different in each company and often a learning process in itself.
- Make continuously clear that there a difference/gap emerges between what the
company delivers and what the customer or stakeholder demands
- Investigating the boundaries of an individual company increases the chances of
discovering new and effective processes
- It is key to make sustainability very relevant for the innovation department and
connect it with the company’s core business
The successful Innovator

Innovation drives business, and when it clicks, it is exciting
Sustainability is a driver for innovations in various ways:
1. Production innovations: new techniques that saves time and have less impact on
the environment and people, reduce lead time and inventories, and increase
customer satisfaction
2. Design innovations: innovations centers are working on the R&D to use more
recycled cotton f.e. in new products
3. Longer-term design and business model challenges: searching for business
innovations to reach the sustainability goals such as full circularity
A sustainable innovation strategy might affect the entire business and value chain. As a big
company you cannot be a circular economy all by yourself. You need to have a network and
fit into the society in order to have a circular economy
Circular economy: is an economic system of closed loops in which raw materials,
components and products lose their value as little as possible, renewable energy sources
are used and systems thinking is at the core.
DSM, the organization of the SDGs, has created remarkable solutions to address several of
the world’s biggest challenges, as it states purpose-led and performance-driven, focusing
on creating a positive societal impact in various domains.
- Technology is already a great solution in reaching the SDG and to adapt to climate
change.
Tips for Innovators

- Map the innovation process in your company, so you can embed sustainability within
it
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- Ensure you have plenty of ideas and innovations in the pipeline, as only a few will be
implemented
- Adjust the way you approach the Innovator role to the maturity of the organization
regarding innovation and sustainability
- Mobilize internal innovation power by positioning sustainability as an urgent driver fro
innovation
- Arrange a sufficient number of internal stakeholders that share this sense of urgency
- leverage internal innovation processes by including sustainability as a selection
criteria
- Plot on different timelines and horizons; real breakthrough innovations take time
- If there is no room for 3rd horizon innovations within the company, arrange an
external innovations process
- Innovations get better by collaborating with others
- Ask the question, what would nature do? when searching for innovative solutions
- Groundbreaking solutions require courage and people need to feel free to both
succeed and fail
- Ensure you also include visual innovations
- Be persistent
- Shield people with innovative ideas from overly critical people
- Make sure the Initiator of an idea remains the owner
- Invest energy to turn that winning idea into success, rather than investing it only in
the prevention of unsuccessful innovations
- Make use of existing innovation processes as much as possible
- Be aware of innovation trends outside the company and their possibilities and
impacts
Chapter 8 - The Monitor

Monitor role: includes monitoring and evaluating (applications of) the sustainability strategy
and policies, such as setting up internal audits and establishing internal measurements
methodologies.
- The CSO often contributes to the sustainability content of the annual report or a
separate sustainability report
- Needs instrumental thinking: requiring strong analytical skills and the ability to
understand/or develop instruments, standards and procedures for sustainable
activities, specifically those used to monitor and measure impact or disclose
information
- Implementation of this role differs from company to company
- Collect information (measurement) which helps to guide (reporting and
improvement) the sustainability strategy and with which the company can be
accountable to its stakeholders - need to proactively collect, analyze and act upon
relevant data
The role of sustainability information

The availability of information is crucial for the integration of sustainability into the
organization. It helps to:
- Make achievements visible
- Support a positive business case
- Share with stakeholders how much progress has been made on their material topics
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- Make better-informed decisions, such as adjusting plans if it becomes clear that

goals will not be achieved
Sustainability information needs to be useful:

- Transparant
- Accessible
- Relevant
- Measurable
- Reliable (accurate)
To deliver such information, quantifiable measurements of activities are needed.
- Key performance indicators
- Match KPI's with the focus areas and the progress you want to achieve
- Look at peers using sustainability metrics and indicators for selecting metrics.
You need to ensure that ownership (responsibility and accountability) of the indicators and
the underlying metrics are secured at the right level in the organization and that the
underlying values are measurable.
- The data generated should provide useful information when tracking progress and
making necessary adjustments to plans or strategies
- You need to determine and agree on the processes as well as establish owners who
are responsible for this (align with existing processes)
- Agree with suppliers on the required information
- Definitions of measures, sources, methods should be made explicit and
updated regularly
Plan-Do-Check-Act Model: method used in business for the control and continuous
improvement of processes and products
- Plan: as the Coordinator, the CSO focuses on creating the sustainability plan with
focus areas and KPIs
- Do: as the Stimulator/Mentor, the CSO manager focuses on the implementation of
the sustainability plan
- Check: as the Monitor, the CSO focuses on the measurements of sustainability
achievements
- Act: based on the collected information, the CSO can adjust or modify the plans as
necessary.
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It is key to measure and monitor high impact metrics more frequently than those with a lower
impact in order to give managers the opportunity to modify or adjust plans when needed to
achieve targets.
- Less frequent basis: incorporate stakeholder feedback (Networker role)
Life cycle analysis (LCA): method that maps the influence of products and human activity
on the environment.
- Considers all stages in the product’s life cycle (sourcing of raw materials, product
manufacture, packaging, distribution, product’s use and disposal)
- Used as the baseline from which to set targets
- Clear picture of the product’s main environmental impacts
Sustainability reporting
There has been a tremendous development in the field of sustainability reporting.
Sustainability measures three distinct categories: environmental, social and governance
(ESG)
- Environmental: topics like greenhouse gas emissions, CO2 emissions, water usage,
waste disposal etc.
- Social: information about diversity and inclusion, labor relations, product safety,
employee health and safety, community development etc.
- Governance: good practice information such as ethics, board diversity and
composition, shareholder rights, supply chain engagement
There is growing investor demand for more uniform sustainability information linked to
financial performance of global companies:
- Non-Financial Reporting: EU Directive; companies are required to disclose
information on the way they operate and manage social and environmental
challenges
- Global Reporting Initiative (GRI): focuses on the selection of sustainability topics
that make a difference or matter for the company creating a sustainability report,
providing indicators for most environmental, social, governance and economic topics
and a general set of topics
- Integrated Reporting (IR): making clear how an organization creates economic,
social and environmental, now and in the future. The organization needs to be
transparent.
- Sustainability Accounting Standards Board (SASB): mission is to develop and
disseminate sustainability accounting standards that help public corporations
disclose material information useful to the investor
- Task Force on Climate-Related Financial Disclosures: developed
recommendations for voluntary climate-related disclosures that are consistent,
comparable, and provide useful information to investors, lenders, insurers and other
stakeholders
Greenhouse Gas Protocol (GHGP): provides accounting and reporting standards on how
companies and organizations should capture and report in a standardized way for
greenhouse gas emissions.
Two types of boundaries are important for reporting:
- Organizational boundaries: what does the organization have control of?
- Operational boundaries: scope 1, scope 2, scope 3:
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- Scope 1: direct GHG emissions from sources that are owned or controlled by
the company
- Scope 2: electricity indirect GHG emissions, purchased electricity consumed
by the company (purchased or otherwise brought into the organizational
boundary of the company)
- Scope 3: other indirect GHG emissions, a consequence of the activities of the
company, but occur from sources not owned or controlled by the company
(production of purchased materials)
To conclude, there is a wealth of information and guidance available on how to report
non-financial information in the annual reporting cycle, but there is no single sustainability
standard in the market today.
- There is a growing number of environmental, social and governance (ESG) ratings
firms that assess and score ESG disclosures
- As a Monitor, the CSO should understand and prepare their boards of directors for
the implications of growing ESG transparency and the opportunities and risks that
follow on from the increased interest in sustainability information
Impact of business activities can be measured and valued in various ways.

- Calculate and express the societal impact (environmental and social impact) in
financial values: the costs and benefits generated by a company that would not show
up in a regular annual report
- Externalities: costs or benefits or external effects of a company on third
parties, which did not choose or ask for it
- Positive: company invests in infrastructure and parks around the
office, community also benefits free of charge
- Negative: company emits CO2 for which the societal costs are higher
than the calculated costs for that company
- Tragedy of the commons: no one has property rights to the environment
and nature and therefore, no one really feels responsible for taking good care
of it
- By translating all externalities to money, you can monetize these effects,
which provides insights into social and environmental profit and loss, in
addition to the financial profit and loss statements
- Focus on material topics as relevant topics
Measuring, reporting and adjusting in practice

To embed the process of producing reliable sustainability metrics, it should be clear how and
by whom the sustainability metric is produced, which data is used, which source, what
calculation method and who is responsible for what.
The more complex the metric, the more extensive the process and the need to be very
precise and transparent about it; this eventually results in a handbook.
- Visualization is good for showing sustainability information (carbon footprint)
The learning Monitor

The most important lesson to be learned is to integrate sustainable information with the other
financial and business information processes, and make the financial department
responsible for part of the Monitor role.
- Challenges
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- To determine the right indicators and metrics

- Differences in control of job area vs business units can be demotivating
- Beliefs and opinions can get in way of facts and good policy
- Be aware that, even if your company is very open and transparent in reporting this
does not mean that there will be no fraud or deception
The successful Monitor

To truly create a more sustainable product, it is imperative to be aware of the stages in
which the product has the most negative environmental impact to enable the organization to
focus on these areas (LCA)
- If sustainability information provided leads directly to sustainable behavior, the
Monitor role directly pays off in results
Tips for Monitors

- Use facts and numbers in communications
- A picture says a thousand words
- Make use of third parties to support the credibility of your
communications/calculations
- Realize that beliefs can be strong
- Do not use too many indicators/metrics to measure your key performance areas,
select the most material ones. Consider:
- Indicators used in the sector
- Indicators from reporting guidelines
- Indicators from external agreements
- The availability of company-specific metrics or indicators
- Focus on information required to control, communicate and report in order to achieve
your sustainability goals
- Align your performance indicator or metrics and baseline measurements with existing
reporting requirements as much as possible
- For the performance indicators or metrics, use existing data as much as possible
- Focus on what you should measure, rather than on how to measure it
- Choose performance indicators or metrics and goals which can be managed
- Determine who is the owner of the KIP and metrics
- You manage what you measure, so do not just measure the intended output, but also
the impacts
- Do not just measure within the company, but also in its environment
- Do not view ESG reporting guidelines and standards as an instrument for
compliance, but as a way to embed sustainability in the management
- Use the growing ESG transparency and the opportunities and risks that follow from it
- Focus on ‘doing good’
Chapter 9: Sustainability dynamics

The roles may create the impression that the work of a CSO is very static, but that is not the
case. To be a successful sustainability professional, you must constantly change roles
during your work (inside sustainability dynamics)
- There are also external sustainability dynamics:
- The growth in maturity of sustainability
- The size of the sustainability team
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- The development in strategic themes: determined by geographical,

organizational or other contextual factors
- It is the task of the CSO to be aware of these dynamics, to reflect regularly and see
what is needed to stay connected to the dynamics of the company and society
Balancing the roles

There are no guidelines on how to divide your time between the different roles:
- Most people prefer to spend more time as a Strategist and less as a Monitor
- Coordinator & Initiator often takes too much time
The roles and activities of the CSO change as sustainability is integrated more deeply into
the organization. Each phase of maturity has its own ‘most relevant’ roles:
- Starting phase: the CSO mostly acts as a Coordinator, Initiator and Stimulator
- Development: time spend as Networker increases and as this matures, more time is
spent as the Strategist and Mentor
- Maintenance: the need for Mentor will decline and so does the Coordinator
In an ever changing environment, new themes and issues will arise and time spent in the 7
roles will intensify and change again, but the CSO will always retain the role of Coordinator
to a certain extent.
The effectiveness of interventions and activities of a CSO always depends on the context in
which he is situated.
- Regardless of the level of maturity, each situation might require another mix of roles
at the same time
- This requires an assessment of a certain context or situation and accordingly, the
use of (a mix of) roles, activities and behavior that are considered to be the most
effective
Study conclusions on the internal change agents and their contribution to sustainability
1. The success of a change agent is largely determined by contextual factors
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2. An effective change agent should be able to act according to a spectrum of

worldviews showing elements of several worldviews at the same time
A sustainability professional must reflect regularly on his or her effectiveness

- The known positive impact of team diversity especially holds for sustainability
teams: given the dynamics of the transition process itself, the context might be
changing which requires other capabilities to be effective
- CSO can increase team effectiveness by searching for complementary drivers,
knowledge, skills and competencies of his team members or recruit.
The development of disruptive technologies is expected to have an enormous impact on the

dynamics of the work and role of the sustainability team of the near future (external factor).
The focus will shift to social issues and the Strategist, Network and Innovator roles will
increase in relevance:
1. The focus will change in the coming years:
a. Digitization of the world leads to lower costs and therefore technologies can
scale and become more sophisticated
b. Because of the low costs of technologies, the difference between supplying to
wealthy customers or poor will diminish
c. Therefore, within 10-15 years, scarcity will be solved
So eventually the environmental problems can/will be solved by disruptive
technologies, however a new set of societal problems will arise such as
balance of power, fake news and privacy
2. CSO should in his Strategic role support the company with its license to grow, based
on the new needs of society
a. New business models will arise: big and very small companies will survive,
others not
b. In order to survive, a company needs to go back to its DNA (‘why’ existence)
and see what it can do for the needs of society from the perspective of the
DNA
3. CSO should in the Network role seek collaboration to build a sustainable ecosystem
for industry
a. It is expected that about 40 companies will build all our goods. THis can
create opportunities for a circular economy, since the circular economy needs
collaboration
b. In the meantime, the future role of the CSO will be about working with other
organizations and regulators
In the Innovator role, the CSO should proactively embed sustainable and ethical criteria in
the development of new technology
In order to deliver results, companies can only do so if they align all five of these business
design traits:
- Purpose: Strategic role
- Governance: Monitor role
- Networks: Networker role
- Ownership
- Finance
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Sustainability dynamics in practice

Which mix of roles is most effective in a global environment depends on 3 things. Only if you
make a sharp analysis on those three, you will be able to find the right mix of roles that
optimize your sustainable transition
- Timing: you need to analyze at which stage of maturity is sustainability in your
organization
- Culture: be sensitive to the particular culture you are working in
- Stakeholders: everyone has a personal preference in style and the way you
approach them and bring them on board
The sustainability team of the future

What remains is the need to keep challenging the organization.
- The CSO should strive to make themselves redundant and continue at full power
- The role does never stop: the challenges are large, the transition paths to a circular
economy and social cohesion are long, fundamental changes are needed.
- All companies needs outside-in thinkers: analytical, critical and creative minds
Chapter 10: Sustainability competencies

Competencies: the ability to perform effectively in a certain type of task or problem
situation, close to what we expect of someone in terms of attitude and behavior
Sustainability competencies: an observable combination of the knowledge, skills, attitude
and personal qualities that we expect of an effective sustainability professional
- Can be expressed in behavior, but there also less visible sides to them (personal
characteristics)
- Can be developed by learning and practice
The CSR competency framework: competencies of CSR/CSO managers differentiates 8

competencies, divided into four kinds:
- Cognition-oriented competencies:
1. Foresight thinking: anticipating future developments regarding CSR-related
challenges for the company
2. Systems thinking: understanding the interdependency between systems and
subsystems that are relevant for CSR, think holistically
3. Instrumental understanding: understanding CSR-relevant drivers, values,
standards and regulations
- Functional-oriented competencies:
4. Management and entrepreneurship: managing or leading CSR and
identifying, prioritizing and realizing CSR-related business opportunities
- Social-oriented competencies:
5. Interpersonal skills: realizing CSR-supportive interpersonal processes in
CSR implementation; effective social, communicative and networking skills
- Meta-oriented competencies:
6. CSR-supportive characteristics and attitudes: ethical, empathetic,
committed, enthusiastic, creative, open-minded, flexible, patient, persistent
and pragmatic in their approach
7. Value-driven competencies and motivation: a high sense of urgency and
intrinsic motivating to act on sustainability challenges
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8. Reflection competency: ability to challenge your own ideas, habits, and

assumptions and to act upon this
Good understanding of sustainability is needed, as well as understanding of different

disciplines.
Competencies for each role

- The Networker:
1. Interpersonal skills: social, communicative and networking skills
2. Management and entrepreneurship competencies
3. Ability to reflect on your own sustainability perspectives
4. System thinking
- The Strategist:
1. System thinking
2. Management and entrepreneurship
3. Interpersonal skills
4. Foresight thinking
5. Outside the box thinking
- The Coordinator & Initiator:
1. System thinking
2. Knowledge/insight in the structure of the organization
4. Management and entrepreneurial skills
- The Stimulator & Connector
2. System thinking
3. Instrumental thinking
4. Ability to listen
5. CSR support characteristics: creativity
6. Intrinsic motivation: to inspire others
- The Mentor:
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1. Instrumental understanding
2. Project management
4. CSR supporting personal characteristics: empathy, patience, persistence
- The Innovator:
1. Ability to think outside the box
2. Reflection
3. Holistic system thinking
4. Foresight thinking
- The Monitor:
1. Instrumental thinking
2. Analytical capabilities
3. System thinking
Practice shows that it is especially the need for flexibility in styles and combination of
competencies to adjust to every situation that distinguishes the dynamic multidisciplinary
‘leadership by influence’ role of a CSO from other managers.
- Circular economy competencies: different competencies are important when
compared with competencies in the field of climate and energy transition:
- System thinking is most important, forward thinking and management and
entrepreneurship are also important
4 levels of jobs classifications for CSOs, CSR and sustainability managers can be identified:
1. Chief Sustainability Officer (in a multinational)
a. Able to create a sustainable system change in its market or supply chain
b. Accountable for the development of the integrated sustainable strategy and
related business models
2. CSR director/Chief Sustainability Officer (of a national organization or a division or
country of a multinational
a. Accountable for developing programs and projects to integrate the
headquarters strategy and goals within the division or country
b. Development of the integrated sustainable strategy for a national/regional
company with relatively little influence to change ‘the rules of the game’
3. Sustainability/CSR project manager
a. Usually report to the CSO director or manager
b. Operate at a more tactical level or strategy for a local operating company
c. Accountable for the realization of projects or work/initiatives that support
corporate sustainability integration
4. Team member in a sustainability team
a. No managerial duties
These four levels differ significantly in know-how, problem-solving and accountability,
justifying a separate level.
The role and competencies of a CSO are growing and becoming more demanding. As a
CSO, you should be able to speak the language of the people of the company (different in a
tech company f.e.)
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Job classifications: the criteria by which a job is graded, differ from job descriptions, roles
and competencies.
- Results are used in job grading and job evaluations to determine what salary a given
position deserves
- Often, only a selected number of jobs within a company are subjected to
classification
- Remuneration also depends on the business sector and country or region that the
CSO is working in: business sectors or different companies
- For HR, sustainability jobs are often difficult to understand and therefore difficult to
grade, because they are new, with a broad scope and large informal influence
Career opportunities
There are many career opportunities for the CSO, CSR and sustainability managers:
- Moving up: from team member to sustainability project manager and ultimately,
overall responsibility for sustainability in an organization
- Moving around: CSO, CSR or sustainability manager in a different business sector
with completely different sustainability teams
- Moving out: might seem a strange career step, but it might be good for the
professional development of the individual to do a career switch and sometimes your
impact is bigger in the business itself than as a CSO.
5 things to do every day to be happy:

- Connect: be social, get out there and enjoy the company of others
- Get active: exercise makes you feel better
- Take notice: be aware of what is going on around you, people, the changing
seasons etc
- Keep learning: not necessarily in the formal sense but stay curious
- Give: it is proven that people who give others are happier
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Lectures
Lecture 1 - Corporate Social Responsibility and Sustainability
Sustainability had become a mainstream topic
How did it start?

- 1987 UN The Brundtland Definition: Our Common Future: they were all aware of
climate change and emissions
- 1992 UN Framework Convention on Climate Change: follow up of our common future
- 1197 UK Kyoto Protocol
- 2015 COP21 (Paris): very important companies live up to this standard, or at least
they should do
- Sustainable Development Goals (SDG’s): adopted in companies strategies to
become more sustainable
Trends in sustainability
Moving from...
- Company towards supply chain: the impact is in the supply chain
- Environment towards human: air quality and pollution, but also more on the human
aspects, like child-labor, pay fair wages (social part of sustainability)
- Check the box towards making-an-impact: what are you really doing?
- Top-down toward bottom-up: initiatives from communities and asking companies to
become more sustainable
- Nice-to-have towards need-to-have: it was an extra, but now it is needed. If you don’t
comply to the sustainability regulations, you are out of business
- CSR director towards CFO: you can still find CSR, but moreover the CFO is engaged
with the sustainability topics, because it is directly affecting the balance sheets
Purpose: companies are more working with a specific purpose
‘If you want to become a billionaire, help a billion people’
Why do firms care about sustainability?

- Increasing revenues: use lots of alternatives
- Reputation/public trust: invest in regulations and compliance stuff to make sure they
stick to the rules to not lose trust
- Attracting talent: young talented people want to work for companies with a purpose
and help society, so as a company you should be the same
- Saving costs/bonus: low energy bills, invest in recycling will all save costs
The Corporate Social Responsibility Hierarchy

- Economic responsibility: to produce an acceptable return for investors (Unilever)
- Legal responsibility: to act within the framework of laws and regulations drawn up
by the government and judiciary (Shell; which framework of which country do you
use? - be transparent)
- Ethical responsibility: to do not harm to its stakeholders and within its operating
environment (signing an oath)
- Discretionary responsibility: companies have more proactive, strategic behaviors
that benefit themselves or society or both (Tony Chocolonely)
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Risk mapping and archetypes of sustainability programs

- Traditional: inherent risks (tobacco, weapons), compliance driven and focus on
reporting to regulatory affairs - stick to the rules
- Communicative: opportunity seizing is complicated because sustainability measures
are costly (automotive, insurance). Focus on risk reduction and compliance. Have
often have to deal with left or right side competition
- Opportunistic: opportunities offered by sustainability (energy/renewables) - most of
the times a spinoff of the mother company (Eneco)
- Transformational: companies that have embraced sustainability in a holistic fashion.
Sustainability programs are more closely tied to business operations (Unilever, Tony
Chocolonely)
Materiality
Sustainability is very broad. Is it key for companies to focus on where they should invest in,
what sustainability topics are relevant for that company. It diverse per sector.
Materiality: those topics that have a direct or indirect impact on an organization's ability to
create, preserve or erode economic, environmental and social value for itself, its
stakeholders and society at large
Six-step approach to generate a materiality matrix

1. Select and assess relevant stakeholders: stakeholder are an important part of the
CSR agenda
2. Define a long list of sustainability topics (risks)
3. Rank the topics and create short list
4. Rate the business impact in terms of risks and opportunities
5. Construct a concept of Materiality matrix
6. Get sign-off by senior management
and document the process
Financial statements do not tell the full
story, therefore, non-financial statements
are also important, since the intangible
assets become much more important for
the stakeholders
Stakeholders need other information to
make decisions:
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Prioritizing among issues
Prioritizing among stakeholders (stakeholder interest)
There are many different frameworks to report. We will work with:

- GRI (global reporting initiative)
- SDG (sustainable development goals)
Global Reporting Initiative

GRI reporting principles for defining report content:
- Materiality:
- Topics that reflect the reporting organization’s significant economic,
environmental, and social impact, or
- Topics that substantially influence the assessment and decisions of
stakeholders
- Stakeholder inclusiveness: the reporting organization shall identify its stakeholders
and explain how it has responded to their reasonable expectations and interest
- Sustainability context: the report shall present the reporting organization’s
performance in the wider context of sustainability
- Completeness: the report shall include coverage of material topics and their
Boundaries, sufficient to reflect significant economic, environmental and social
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impacts, and to enable stakeholders to assess the reporting organization’s

performance in the reporting period
GRI reporting principles for defining report content:

- Balance
- Accuracy
- Clarity
- Comparability
- Reliability
- Timeliness
SDGs
Often, companies chose a few of them, depending on the industry. Ask your stakeholders
where you should invest in as a company
The triple bottom line

Means that you put a financial number of the environmental and social aspects as well, both
negatively and positively
- Have a clear view of the positive and negative influence you have as a company
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Lecture 2: KPN and the 7 roles to create successful sustainability

Jeroen Cox - The Green Connection (KPN)
The fourth industrial revolution will bring change at a speed, scale and force unlike
anything we have experienced before
- It will affect the essence of our human experience
- Radical system-wide innovation can happen in only a few years
- The interplay between fields like nanotechnology, brain research, 3D printing, mobile
networks and computing will create realities that were previously unthinkable
- Almost everyone will be able to invent new products and services cheaply and
quickly
- The business models of each and every industry will be transformed
An IT company like KPN plays a large role in this, by providing large communication
services. But how can such a company do this in a sustainable way?
This is linked to the 7 roles of sustainability.
Value drivers for our ambition on sustainability (intrinsic motivation to be sustainable

leader):
- General public expectations
- Financial Market Expectations (ESG): we need a lot of money to renew, which have
to come from stakeholders with increasing interest in sustainability
- Attract & retain talent
- Futureproof for tenders in public sector: set an example
- Cost & CAPEX savings: save energy will save money, making things smaller but
smarter
- Added value for customers
Our sustainability targets (KPN):

2011: 100% green electricity
2015: climate neutral operations
2025: circular operations
2030: fossil free fleet
2040: reduce supply chain emissions by 50%: stuff that we buy, here is the most emission
Scope 1: direct exhaust (car fleet, factory)
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Scope 2: electricity that you buy

Scope 3: the rest (supply chain = 75% of total CO2 usage)
The challenge of KPN is that there is an increasing demand for more bandwidth (Youtube,
Netflix). This is done by reducing the energy consumption together with an increasing data
communication growth.
- They also do this by virtualizing: not only using the hardware itself, but ensuring that
one machine can do multiple applications, so networks become smarter
Energy Data & Analytics

Do advanced data analytics and predict what future energy usage would be. Become much
more data driven and rethink the energy buying strategy (long-term scenario planning)
The road to circularity

Think about where products/materials came from, where they are used for, but also they will
go after being used.
KPN Circular Program: contains seven tracks in which goals and project form the circular
roadmap:
Core tracks:
1. Networks and data centers
2. Products & services
3. Real estate & workspace
4. Procurement
Supporting tracks
5. Reporting
6. Employee engagement
7. Governance
We use four levers (4 ways to improve circular performance) to realize our ambition on
energy & circularity. All four levers can be applied to operations and the products/services
we provide:
Supporting actions
- Reduce: use of virgin materials (virtualization, reused products, recycled/biobased
products, dematerialization)
- Extend: use products longer and better (lifespan extensions, rates of utilization)
Goal: zero waste
- Recycle: high-end second life of products and materials (reuse, recycling)
- Energy efficiency: reducing energy usage and increased energy efficiency

Thinking in dilemmas is very important in sustainability, because they challenge you to
rethink the current beliefs. When you become more sustainable, you have a new piece of
equipment and you have to think about what you will do with the old one.
What is the essence of circularity for KPN?

Materials flowing-in must be fully recyclable and preferably based on recycled content
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By collaborating with others, you can maximize your impact

Procurement: create impact with the circular manifest: overall 18 partners signed
representing 76% of materials impact in spend.
- By collaborating with others, you get the opportunity to think outside the box of your
company
- Capital Equipment Coalition: a coalition of forward-thinking business leaders join
forces to accelerate the implementation of the circular economy
Joint Audit Committee: checks and balances for the Telecom industry
KPN is driving the circular economy agenda together with Orange and Telefonica.
They reward companies that perform the best
Advantages:
- A local factory only gets visited once a year
- When there is a nonconformity found in that audit, they are expected to be resolved
in one year. Most of these issues are resolved quite quickly due to the committee.
Product design: measuring circular inflow with product passports

We focus on 15 product passports for iconic products covering KPN’s network and CPE
In order to make an impact, there is only one way to do it. That’s by engaging with
colleagues and suppliers, because you cannot do it on your own.
KPN introduced products with improved circular design as differentiators. We focus on

design, reuse & recycling as part of our 2025 circular ambition.
Target 2022: 15 products improved for circular design - 8 realized until now
The sustainability department needs to stay as small as possible, because the change has
to be made in the business itself.
Carola Wijdoogen - 7 Roles to Create Sustainable Success

Former Chief Sustainability Officer (CSO) at NS
Why sustainable? A win-win situation for business
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It is important that there is intrinsic motivation, but there is also a very strong business case
to integrate sustainability into your business case.
Integrating sustainability in your core activity

NS: together we make the Netherlands accessible, for everyone
- Delivering world-class mobility by 2025 (best in Europe)
- Always close by, always affordable and always sustainable
A sustainable business
5 phases in the maturity of a sustainable business:
1. Compliance and philanthropy
2. Efficiency, risk management, reducing operational impact
3. Reputation building, proactive risk management, stakeholders’ co-evaluation
4. Embedded in business processes and systems including product and service
development and value chain
5. System change, redesigning rules of the game: not longer complying to the current
rules, but redesign the rules in a more circular way or fossil free.
a. System change is needed, because you can change your own organization,
but if you can’t change the system around the organization, the situation will
not be sustainable.
Change agents in business: key in accelerating transition

- Change agents are the sustainability professionals.
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How? What does it take to create sustainable business?

1. 7 roles (based on Dutch scientific research & field research globally)
2. Competencies: 8 skills (in the book)
3. Personal drivers: keep on being motivated
7 Roles - short descriptions

1. Engage and grow the network (N etworker) : involve stakeholders
2. Lead for strategy (S trategist): integrate sustainability defined by you and your
stakeholders into the strategy
3. Support implementation (Coordinator and Initiator) : translate the strategy towards a
sustainable framework which guides the business units in what they should do
(formal structure)
4. Challenge to inspire and connect (S timulator and Connector): you use your bottom
up and challenging skills in order to engage the employees on an organizational level
(informal structure)
5. Empower others for success; individual level (Mentor): translate sustainability into
the jobs and functions in your company on an individual level
6. Innovate for continuous renewal (I nnovator) : y ou will need innovations to achieve
the goals in your strategy
7. Learn from reporting (Monitor) : gather all the information that you need in order to
find out if you are doing the right things
7 Roles in practice (NS)

1. Strategist: leader in sustainability, think of zero CO2 emission
2. Networker: find stakeholders (suppliers of renewable sources, clients/customers,
and NGO) and involve them. Ask them what is important for them & us (materiality)
a. How do we respond to our stakeholders? Collaborate with NGOs, cooperation
with the sector, involving customers & employees (responsiveness)
3. Monitor: know your facts and figures, inform your stakeholders after the new way of
renewables
4. Innovator: new way of sourcing renewables (long-partner for 10 years allowing the
NS to build new wind power projects dedicated to the NS itself, which was copied by
many others in the industry, resulting in a system change)
a. Also find a new ways of communicating (not only showing it in the annual
reports, but find a more commercial way)
b. Trains in Holland are completely running on wind power, and this idea is
taken over by many others
5. Stimulator and Mentor: empower others at organizational and individual level (Tour
throughout the company in order to engage all employees, make designers take
sustainability into account in the design of the trains)
6. Coordinator: support implementation; formal role.
The challenge
- Balancing time spend on the roles (which, when, how)
- The other business professionals: not only the sustainability professional, but also
the others should be involved. He cannot do it alone. Others should also implement
the roles needed to create sustainable success.
- Other themes coming up such as biodiversity
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‘Be the change that you want to see in the world!’
Lecture 3 - Pre-financial & Impact reporting (ABN Amro)

Calling it non-financial will not get the attention needed, so calling it pre-financials or not
yet financials will get the topics into the discussion.
Strategy refresh
- Purpose: banking for better, for generations to come
- Strategy: accelerating the sustainability shift
- Support the clients transition to sustainability
- Reinvent the customer experience
- Build a future proof bank
ABN Amro tries to combine the sustainability strategy and the corporate strategy into one,
which helped a lot in terms of reporting and communicating the ambitions. It puts
sustainability at the core of their strategy.
Sustainable focus areas

1. Circular economy
2. Combat climate change: energy transition, biodiversity
3. Social impact
The reporting journey of ABN Amro

2011: started with a small sustainability report
2012-2014: GRI Report
2015: First integrated reports; really challenging
Important debates on integrated reporting:
Where to start? - Reporting was our starting point:
- Long-term value creation: most important for ABN Amro
- Integrated thinking
- Integrated reporting: integrated reporting is a process founded on integrated
thinking
IR: the primary purpose of an integrated report is to explain to providers of financial capital
how an organization creates value over time
- To prosper over time, every company must not only deliver financial performance,
but also show how it makes a positive contribution to society. Companies must
benefit all of their stakeholders.
- We believe that companies are better able to deliver long-term value to shareholder
when they consider stakeholder concerns
ABN Amro aims to create long-term value that benefits all stakeholders:
- We take long-term value creation for our stakeholders seriously. We measure it so
we can manage it.
Integrated thinking results

We created an integrated community: people from various departments of the bank that
were working on topics that came out of our materiality analysis and look how we can
73
integrate those topics into our management reporting and ultimately into our integrated
reporting.
- Management reporting: ability to steer non-financials, evidence based.
Non-financials can be used as pre-financials
- Risk reporting: Strategic Risk Assessment aligned and more thorough
- Integrated reporting: alignment of management- (internal), external- and risk
reporting
Materiality analysis: a part of the process around integrated reporting, but also mandated
by GRI, where you try to assess what is material to your stakeholders and what is the impact
of those topics on the bank (materiality matrix).
Integrated thinking and integrated reporting brings better

decision-making.
Better decision-making ultimately leads to long-term value
creation.
Guiding principles IR
1. Strategic focus and future orientation
2. Connectivity of information
3. Stakeholder relationships
4. Materiality: how are you creation value to your
stakeholders
5. Conciseness: first integrated report (based on IR and GRI), based on 2014
materiality and with assurance on material metrics. First value creation model with
488, was not very concise
6. Reliability and completeness
7. Consistency and comparability
Rationale behind core & more approach (2017)

Core and more approach
- Increased demand for clear corporate story
- Different target groups
- New communication possibilities
- Interest for non-financial information
- New regulations: finance or sustainability space
- More detailed and granular disclosures required
Core & more approach (82 - 55 pages):

Core report = Integrated Annual Review: limited assurance from IR
- Report that is very concise, a summary of varying underlying more reports
- More reports are:
- Annual Report
- Pillar III Report
- Impact report
- Human Rights update
- Quarterly newsletter
- And more
Assurance front to back cover, based on IIRC Framework
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Biggest challenges
1. Balance
- Integrated report should give a balanced overview of the year you are reporting on
and that also means that if certain topics did not go well, you should be fully
transparent around that
- Challenging to report things that did not go so well, dilemma
2. Transparency of impact
- We are investing this amount of money, but what is the true impact?
Impact Reporting Journey

Used to get better sense of the impact
March 2019: ABN AMro publishes its first impact report
Measuring, reporting & steering make value creation ationalbe

1. Measure: value creation for all stakeholders
2. Report: on value creation for all stakeholders
a. Reporting is useful for improvement, to find gaps, to know how you are
performing, which needs to be addressed. It allows you to continuously
improve
b. The ultimate improvement that we would like to see is to steer on this topic of
value creation
3. Steer: on value creation for all stakeholders
From integrated thinking to impact:
1. Integrated thinking & reporting
2. Long-term value creation
3. Value-creating topics
4. Monetisation: dilemma in itself, because there are no clear guidelines on
monetization, so monetizing your impact on capital is highly debating
Information required to manage long-term value for our stakeholders

Information required:
1. Value created for our stakeholders
2. Value created for our investors
3. Do not harm
4. Contribution to Sustainable Development
Frameworks followed:
- IR
- Social Capital Protocol
- Natural Capital Protocol
- FIS: Framework for Impact Statements
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Tutorials
Tutorial 1
Sustainability / CR reporting: systematic way for companies to report on CR performance,
comparable to (financial) accounting standards
- Global Reporting Initiatives (GRI): most used worldwide, used in class
- Integrated Reporting (IR)
- Transparency benchmark
CR reporting trends
- CR reporting increasingly mandated by government bodies, and/or stock exchanges
- Drives adoption among large companies
- More and more governments set the GRI for the standards
- Adoption is especially universal in sectors with large environmental impact (e.g.
mining, oil)
GRI: background
- Started in 2000. Meant to help organizations account for and for stakeholders to
understand the impact of corporate activities on sustainable development
- The Standards are issued by the Global Sustainability Standards Board (GSSB),
GRI’s independent standardsetting body
- 4 types of standards:
- Universal (foundation, general disclosures, management approach)
- 3 Topic-specific standards (economic, environmental, social (33 in total)
- Modular structure: standards can be changed depending on developments without
need for complete overhaul
- Distinction between requirements (necessary), recommendations, and guidance
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- Of the 33 topic-related standards, organization can select those that are relevant
- Impact: means material impact and refers to the impact on:
- Economy
- Environment
- Society
- Not on the organization itself
- Boundary: refers to where the impact occurs (e.g. inside or outside of the
organization)
SDGs
Sustainable Development Goals: more integrated and adapted by the corporate sector
- Planetary boundaries: framework to report/design the sustainability strategy
- UN Global compact: 10 principles:
- Adopted by the financial sectors
The 17 sustainable development goals (SDGs) to transform our world:
- GOAL 1: No Poverty
- GOAL 2: Zero Hunger
- GOAL 3: Good Health and Well-being
- GOAL 4: Quality Education
- GOAL 5: Gender Equality
- GOAL 6: Clean Water and Sanitation
- GOAL 7: Affordable and Clean Energy
- GOAL 8: Decent Work and Economic Growth
- GOAL 9: Industry, Innovation and Infrastructure
- GOAL 10: Reduced Inequality
- GOAL 11: Sustainable Cities and Communities
- GOAL 12: Responsible Consumption and Production
- GOAL 13: Climate Action
- GOAL 14: Life Below Water
- GOAL 15: Life on Land
- GOAL 16: Peace and Justice Strong Institutions
- GOAL 17: Partnerships to achieve the Goal
GRI document
Reporting principles: fundamental to achieving high quality sustainability reporting. The
reporting principles are divided into two groups:
- Principles for defining report content
- Stakeholder inclusiveness: identify its stakeholders, and explain how it has
responded to their reasonable expectations and interests
- Sustainability context: present the reporting organization’s performance in
the wider context of sustainability
- Materiality: cover topics that
- Reflect the reporting organization’s significant economic,
environmental, and social impacts OR
- Substantially influence the assessments and decisions of stakeholders
- Completeness: include coverage of material topics and their Boundaries,
sufficient to reflect significant economic, environmental, and social impacts,
77
and to enable stakeholders to assess the reporting organization's

performance in the reporting period
- Principles for defining report quality
- Accuracy: reported information shall be sufficiently accurate and detailed for
stakeholders to assess the reporting organization’s performance
- Balance: reported information shall reflect positive and negative aspects of
the reporting organization’s performance to enable a reasoned assessment of
overall performance
- Clarity: make information available in a manner that is understandable and
accessible to stakeholders using that information
- Comparability: select, compile, and report information consistently. The
reported information shall be presented in a manner that enables
stakeholders to analyze changes in the organization's performance over time,
and that could support analysis relative to other organizations
- Reliability: gather, record, compile, analyze, and report information and
processes used in the preparation of the report in a way that can be subject to
examination , and that establishes the quality and materiality of the
information
- Timeliness: report on a regular schedule so that information is available in
time for stakeholders to make informed decisions
Each of the reporting principles consists of a requirement and guidance on how to apply the
principle, including tests.
- The tests are tools to help an organization assess whether it has applied the principle
Key terms in GRI Standards

- Impact: the effect an organization has on the economy, the environment, and/or
society, which in turn can indicate its contribution (positive/negative) to sustainable
development
- Management approach disclosure: narrative description about how an organization
manages its material topics and their related impacts
- Material topics: topic that reflects a reporting organization’s significant economic,
environmental, and social impacts; or that sustantively influences the assessments
and decisions of stakeholders
- Reporting period: specific time span covered by the information reported
- Reporting Principle: concept that describes the outcomes a report is expected to
achieve, and that guides decisions made throughout the reporting process around
report content or quality
- Stakeholder: entity or individual that can reasonably be expected to be significantly
affected by the reporting organization’s activities, products, and services, or whose
actions can reasonably be expected to affect the ability of the organization to
successfully implement its strategies and achieve its objectives
- Sustainable development/sustainability: development that meets the needs of the
present without compromising the ability of future generations to meet their own
needs
- Topic: economic, environmental or social subject
- Topic Boundary: description of where the impacts occur for a material topic, and the
organization’s involvement with those impacts
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Tutorial 2: Science-based targets and Climate-based Financial risks

Science-based targets: greenhouse gas emission reduction targets aligned with the latest
climate science for keeping warming below 2 degrees Celsius
- A SBT for a company represents that company’s share of the global carbon budget
- The GCB is the amount of carbon the world can collectively emit whilst
hoping to stay on a 2 degree path
- This budget is allocated to a company
- Shifts the discussion from ‘how much do we expect to reduce?’ to ‘how much
must we reduce?’
Scope 1: direct emissions from primary processes (easy to manage)

Scope 2: indirect emissions from power consumption
Scope 3: emissions are all indirect upstream and downstream emissions that occur in the
value chain of the reporting company (difficult to manage, but more and more important)
- Upstream: users of products
- Downstream: suppliers
Criteria scope 1 and scope 2

- C1 - Scopes: the targets must cover company-wide scope 1 and scope 2 emissions,
as defined by the GHG Protocol Corporate Standards
- C2 - Significance thresholds: companies may exclude up to 5% of scope 1 and
scope 2 emissions combined in their inventory and target
- C3 - Greenhouse gases: the targets must cover all relevant GHGs as required per
the GHG Protocol Corporate Standards
- C4 - Base and target years: all targets must cover a minimum of 5 years and a
maximum of 15 years form the date the target is submitted to the SBTi for an official
validation
- C5 - Progress to date: targets that have already been achieved by the date they are
submitted to the SBTi are not acceptable
- C6 - Level of ambition: at a minimum, the target will be consistent with the level of
decarbonization required to keep global temperature increase to 2 degrees Celsius
compared to pre-industrial temperatures, though we encourage companies to pursue
greater efforts towards a 1.5 degrees Celsius trajectory
Criteria scope 3
- C11 - Boundary: complete a scope 3 screening. If scope 3 emissions are ?40% of
total emissions, a scope 3 target is required. The scope 3 target boundary must
include the majority of value chain emissions
- C12 - Ambition: targets should clearly demonstrate how the company is addressing
the main sources of GHG emissions in line with current best practice
- C13 - Power generators that distribute fossil fuels: targets required for hte use of
sold products
- C14 - Timeframe: targets must cover 5 to 15 years from date submitted to SBTi for
an official validation
Science-based targets types

- Percentage-based emissions reduction targets:
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-Percentage-based absolute target in line with 2C pathway when possible or

intensity target based on the SDA
- Other percentage-based intensity target resulting in ambitious reductions in
absolute emissions
- Most preferred
- Non-emissions-based targets:
- Performance-based target expressed in absolute or intensity terms
- Influence the behavior of suppliers or customers
- Least preferred
Climate-based financial risks: set of potential risks that may result from climate change
and that could potentially impact the safety and soundness of individual financial institutions
and have broader financial stability implications for the banking system
Financial implications of climate change:
- Emissions of greenhouse gases will cause further warming the planet
- Organizations incorrectly perceive the implications of climate change to be long term,
and therefore, not relevant to decisions made today
- However, rapidly declining costs and increased deployment of clean and
energy-efficient technologies have already near-term financial implications for
organizations
- Transition to a lower-carbon economy presents significant risks, but also create
opportunities (change mitigation and adaptation solutions)
- The expected transition is estimated to require around 1 trillion USD of investments a
year
- Value at risks, as a result of climate change, to the global stock of assets as ranging
from 4.2 trillion to 43 trillion USD between now and the end of the century
Task Force on Climate-related Financial Disclosures

- Governance: the organization’s governance around
climate-related risks and opportunities
- Strategy: the actual and potential impacts of
climate-related risks and opportunities on the
organization’s business, strategy and financial planning
- Risk management: the processes used by the
organization to identify, assess, and manage
climate-related risks
- Metrics and targets: the metrics and targets used to assess and manage
climate-related risks and opportunities
Climate-related scenarios: disclosures on the resilience of an organization’s strategy,

taking into consideration different climate-related scenarios, include a 2 degree Celsius or
lower scenario
- Tells something about the strategy and future proofness of the organization
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Corporate Social Responsibility - UvA

Summary of all lectures, tutorials and

Gedownload door: simone_kersten | simone_kersten@hotmail.com

Corporate Social Responsibility

7 Roles to Create Sustainable Success - ​Carola Wijdoogen

Gedownload door: simone_kersten | simone_kersten@hotmail.com

Sustainability programs lack air traffic controllers or often pilots:

Sources of Data and Methodologies

Two other sources of information were used extensively in the research:

Limitations of the Research

Chapter 2: Patterns of Frontrunners

Climate strategy: an example of data analytics

Identifying Key Success Drivers

Research can be both descriptive and prescriptive:

Gedownload door: simone_kersten | simone_kersten@hotmail.com

- Vectoring Step 1: Getting the Bearings Right

The Business Case for Sustainability

2. Revenue growth from sustainable innovations

The Four Archetypes of Sustainability

- Traditional​: companies with a relatively high-risk profile and limited development of

- Compliance-driven, leveraging regulations to justify and extend their licenses

Chapter 4: Focusing on Materialities That Matter

Concentrating on a limited number of relevant sustainability issues tends to improve the

The evolving reach of boards’ fiduciary responsibility

The creep of corporate responsibility

Reporting on sustainability: the Materiality Matrix

1. Aligning sustainability strategy with corporate strategy

Building your own materiality matrix

To generate a materiality matrix that embraces the principles of vectoring, a straightforward

Tips, traps and takeaways

- Link the SDG to your materiality matrix

Chapter 5 - Sustainable Development Goals

Local and Global: not just the developing countries

The SDG Proposition Workshop

Tips, traps and takeaways

- A paternalistic framing, viewing the SDGs as a faraway challenge, is a setup for

Chapter 6: ESG Ratings and the Stock Markets

Four-step company assessment

From engagement to results

The increasing burden of non-financial reporting

While sustainability is becoming more multi-faceted, institutions are forced to rely

Designing an ESG Ratings Game Plan

- Level of personalized feedback​: what kind of feedback on the company

Tips, traps and takeaways

Chapter 7 - Investors’ Perspectives on Sustainability

Sustainability and startups

Tips, traps and takeaways

- Beware of the reporting purpose only sustainability programs

Chapter 8: Encouraging a Culture of Sustainability

- Denison Organizational Culture Model​: linking culture to bottom-line performance

Building a Culture of Sustainability: the Power of Coalitions

A possible alternative to becoming a member of an existing movement is to create a

Tips, traps and takeaways

Chapter 12: Stellar Performance from Sustainability Teams

c. Culture of collaboration can improve the performance of sustainability teams,

Key Account Teams and Sustainability: Bootcamps and Boosters

Stages of bootcamps and boosters:

These joint efforts contributed considerable to improving the sustainability performance of

Tips, traps and takeaways

Chapter 13: Embedding Sustainability into the Business Core

7 Roles to Create Sustainable Success - Carola Wijdoogen

- Traditional: companies with a relatively high-risk profile and limited development of

- Level of personalized feedback: what kind of feedback on the company

- Denison Organizational Culture Model: linking culture to bottom-line performance

Stakeholder theory: posits that an organization’s performance should be measured against

1. Reject: from the production process entirely

were uncovered by following a simple three-phase game plan: strategy compilation,

7 Roles to Create Sustainable Success - Carola Wijdoogen

- Stakeholder engagement demands thorough planning, a comprehensive

Four core dimensions of a sustainability strategy with different links to company

4. Finance team: productivity and investments

- 40% depends on structural elements: reporting, checklists, e-learning tool, codes of

To generate support, you can never ‘over-communicate’ on sustainability.

Social intrapreneurship: means that an organization offers space to employees to behave