The time of simply setting ambitious sustainability targets and being applauded for it is over. No matter any current public discourse about ESG, companies now need to integrate sustainability action into their daily business to manage material risks.

The facts are clear. We have breached seven out of the nine planetary boundaries that represent a safe operating space for human life on Earth. Just take the climate crisis as the most prominent and arguably most pressing sustainability issue of our times with its adverse effects worldwide.

In fact, according to the University of Cambridge, the climate crisis threatens up to 30% of the global economy. Key drivers for business action therefore are legislation, the finance sector, customers, employees and increasingly the sober realization that it’s about risk and resilience.

Unsurprisingly, climate change thus tops the list of what businesses view as the most material sustainability issues along with own workforce, according to the European Financial Reporting Advisory Group (Efrag). This is shown by the first CSRD-aligned sustainability reports in Europe.

How to integrate sustainability into a business?  

Indeed, more than 11,000 companies worldwide are working with the Science Based Targets Initiative (SBTi) to decarbonise and reduce their carbon emissions in line with up-to-date climate science. Out of those, more than 2,000 have committed to achieving net zero emissions.

But how do you integrate such targets and real action into an organisation to achieve results?

This is not an easy job for sure, and it requires strategic and constant effort especially with a view to engaging relevant stakeholders and enabling participation. On the one hand, this involves transformation which means big changes. Here, we look at culture, governance, and leadership.

On the other hand, ESG integration requires holistic thinking as internal change happens within an external environment. Beyond what they are told directly, employees see and judge factual corporate behaviour and communication. External communication is internal communication.

Which is why communicators need to work closely with sustainability people. Internal and external need to go hand in hand and cannot be seen as contradictive. Or you fail.

External: Engagement, transparency and positioning

Of course, there is the external role of sustainability communication around ongoing and open stakeholder engagement which is a prerequisite for credible ESG integration.

Nestlé for example regularly invites small farmers, NGOs and investors to dialogue forums and publishes their feedback in its Creating Shared Value report. In this way, the company aims to build additional trust and actively involves key partners in its sustainability strategy.

Providing transparency about progress is essential to gain the trust of financial markets and consumers. The BMW Group, for example, uses an integrated sustainability and annual report, displaying environmental indicators, social engagement and corporate governance online.

Leaders can win in terms of reputation: Patagonia launched the ‘Don't Buy This Jacket’ campaign to highlight repair services and durable products. This radical communication strategy positioned the brand as a credible pioneer in ESG while also boosting sales in the long term.

Targeted ESG communication can even facilitate access to sustainable capital. Ørsted transformed itself from the Danish oil and gas company DONG into a pure offshore wind player and accompanied the change with clear messages in investor briefings and roadshows.

Lastly, public advocacy demonstrates responsibility, as working with politicians and society can shape regulation in line with your own ESG goals. Unilever established the Climate & Nature Fund and publicly reports on its lobbying efforts for stricter climate protection regulations.

Internal: Coalition, narrative and ESG integration

The implementation of sustainability is a management task that requires changes to corporate structures and processes – and often even to corporate culture. Companies must therefore promote acceptance and commitment among employees to ensure success.

Up to two thirds of change projects fail. And the top mistakes are all related to communication and leadership. According to John P. Kotter, they are:

• Error #1: Not Establishing a Great Enough Sense of Urgency
• Error #2: Not Creating a Powerful Enough Guiding Coalition
• Error #3: Lacking a Vision that Clarifies Direction
• Error #4: Under communicating the Vision by a Factor of Ten

We often see companies focusing on the technical side of sustainability transformation: Developing a strategy (without stakeholder engagement), setting targets, defining roadmaps, collecting and managing ESG data. While this is all part of the game, it all starts with a vision.

Experience shows that leaders often have diverging views on what sustainability is – and especially, what sustainability means for their specific business. And they rarely discuss it.

But you need an agreed state of the future if you want to make the right decisions in everyday business: Where to invest, what to focus on, what to prioritize in the face of conflicting interests.

Sustainability narrative as a North Star of change

Working with clients, we help develop a shared understanding of sustainability among key executives, including the specific level of ambition first. This helps to produce an authentic narrative as a communicative basis for leadership and change management: What are we doing? How do we do it? And why are we doing all this? This is the North Star of change.

In developing or reviewing a corporate sustainability strategy, stakeholder engagement is key to catching the relevant perspectives and insights. Plus, it pays dividends for implementation. One client did not engage procurement early on, and it took painful effort later to get them on board.

In fact, engaging stakeholders in a change process can lead to greater buy-in, reduced resistance, and improved outcomes. It’s about making them part of the thinking and engaging in dialogue whenever it makes sense. Here, I’m using collaborative and participative formats such as the method LEGO Serious Play or the interactive climate education format Climate Fresk.

All together now: Creating a sustainability symphony

Having used bottom-up insights, the vision and strategy then need to be systematically deployed and cascaded top down, guiding business units, regions, functions, and product portfolio. Sustainability needs to be an integral part of leadership, business, and supporting processes.

What is required is a ‘sustainability symphony’ from R&D and marketing to production, supply chain, finance, and human resources. Here, we’re speaking about recruiting, training, incentive systems and shaping culture – where internal communication plays a key role once more.

People are drivers of transformation. With its campaign ‘We create chemistry for a sustainable future’, BASF, for example, has trained employees in 90+ countries, shared best practice stories and set up a suggestion portal. Sustainability became tangible and anchored as corporate goal.

Sustainability transformation is not just a project – it’s a paradigm change across the business. Through its transformational powers, strategic communication unlocks sustainability.