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If sustainability is key to survival, how do you bring it to life?

Photographic portrait of Mark Veser

4 minute read 20 Jul 2023

Related topics

Sustainability in Financial services

Financial services

We explore how Swiss companies can develop and implement a sustainable strategy for the future.

In brief

Climate change is real, and a sustainable economy is the order of the day.
Swiss companies must take action and make sustainability an integral part of their strategy if they are to survive in the long term.
To build a successful sustainability strategy, companies should involve all their employees and start now.

Like society as a whole, Swiss companies are facing a paramount challenge: the urgent need to respond to climate and environmental issues. Action is the only way to prevent severe consequences for the economy and society and, in the best case, achieve the Paris climate targets. But it’s no easy task.

Sustainability has become more than just a buzzword for companies. They no longer need convincing of the need for a sustainability strategy. Legal requirements and the associated implementation deadlines have had an impact. And regulations from Switzerland and abroad are exerting additional pressure on companies to become more sustainable.

Companies are also intrinsically motivated to become climate-neutral. They have to, quite simply, if they want their business to survive in the long term. And this depends on a whole range of factors in the real economy – logistics, supply chains, workforce – becoming more sustainable. Investor and customer expectations are also constantly growing.

No one person, no single department can define and implement a sustainability strategy alone.

Sustainable Finance

EY sustainable finance teams helps financial services companies define sustainability goals that create value and make a measurable difference. Learn more.
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So, what does a corporate strategy that meets these requirements look like? Where should a company start? Needs vary greatly and depend on the specific business model. But all strategies have one thing in common: they’re not about individual departments but cross-functional solutions. No one person, no single department can define and implement a strategy like this alone. In other words, introducing a dedicated sustainability function is not enough.

The issue impacts the product and service portfolio, research and development, purchasing, production, and sales; but also all other corporate functions such as human resources, legal and compliance, and risk management. To implement sustainability in a company credibly, effectively and over the long term, the topic must be viewed as a guiding principle and integrated across all business areas.

It is vital that companies build the capacity and expertise to achieve this now – and that doesn’t just mean at the board and C-suite level; all employees should be involved. After all, employees are the key stakeholders in any sustainability strategy. The measures taken should be tangible in their day-to-day work. Every company and every individual needs to understand that sustainability and decarbonization are not just risks but also an opportunity.

A dual strategy may also benefit some companies.

B2B offers the greatest lever for change. For a company in the agricultural sector, for example, this can mean securing long-term access to sustainably produced raw materials. Therefore, it is in the company’s interest to stop climate change. After all, what happens if the company can no longer obtain raw materials in the necessary quantity and quality because of drought, for example?

However, a dual strategy may also benefit some businesses. For example, companies can significantly reduce their CO2 intensity by adjusting their strategy. This could include a focus on acquisitions that depart from the original, CO2-intensive core business and help to reduce their carbon footprint.

For the climate, it is better to support companies on their path toward a sustainable and successful future.

Dr. Mark Veser

Partner, Head Climate Change and Sustainability Services | EY Switzerland

Banks and insurance companies play a central role by financing and insuring the transition to a more sustainable future and enabling companies to address climate change through dedicated products.

However, it is not advisable to merely exclude companies if their core business involves high CO2 emissions. In this respect, Switzerland’s sustainability legislation accommodates companies in a practical way. Exclusions only shift the problem. Instead, real incentives are needed to change behavior. For the climate, it may be better to support companies on their path toward a sustainable and thriving future.

Recommendations for a sustainability strategy

EY has put together five recommendations to kick-start your conversation about the sustainability strategy at your organization.

Nobody – no CEO and no department – can stop climate change single-handedly. All functions must be involved, and the board and management should lead by example.
The operational leadership should be represented by the company’s different functions.
There needs to be a shared vision for the sustainability strategy that is understood by all stakeholders.
It is critical to not only see the risks of a sustainability strategy, but also to emphasize the opportunities.
It pays to start early. Preferably now!

Summary

The future of our society, economy and planet hinge on companies’ ability to develop and implement a successful sustainability strategy. It’s a big undertaking, but also an exciting opportunity. Leadership and employee buy-in are indispensable to successful implementation – and positive, impactful change. Starting now.

About this article

Photographic portrait of Mark Veser

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Limited, each of which is a separate legal entity. Ernst & Young Limited is a Swiss company with registered seats in Switzerland providing services to clients in Switzerland.