6 Steps to integrate sustainability based on ESG criteria into business strategy

No one doubts that integrating sustainability into strategic business management is not a whim, nor is it a response to government and regulatory guidelines, or a way to satisfy the demands of customers and stakeholders, who are increasingly demanding when it comes to organizational responsibility. However, it is important to note that sustainability is not just about addressing environmental issues. Today, there is talk of addressing this challenge holistically, from the perspective of environmental criteria linked to social performance and corporate governance, known as ESG criteria.

From this perspective, corporate sustainability must be integrated across the organization and not limited to a specific function or department, so that it can have a significant impact on the entire corporate ecosystem and stakeholders, including customers, suppliers, employees, investors, and society itself.

Sustainability regulation

However, global sustainability regulation is now a reality; for example, the European Union (EU) has taken an important step by requiring organizations and their subsidiaries, regardless of whether they are located outside the European Union, to identify the risks and opportunities of environmental and social criteria; likewise, public companies are required to to disclose information on risks and opportunities related to environmental and social sustainability criteria (Corporate Sustainability Reporting Directive - CSRD), thus revolutionizing the competitive model and promoting the economic and social transformation that is essential to address the social and environmental challenges we are facing globally.

For its part, in Colombia, the Superintendency of Companies (SuperSociedades), recognizing that sustainability is a multidimensional issue that must be part of corporate strategy, decision-making processes, and risk management, published in its External Circular 100-000010 of November 21, 2023, the ” Administrative Recommendations on the Presentation of Sustainability Reports ,” which provides guidance to its supervised entities on incorporating international sustainability reporting standards, as well as the results of their performance and their impact on environmental, social, and governance (ESG) issues, economic and financial issues, using the criteria of an international standard.

While it is important to note that, according to Supersociedades, by January 2025, sustainability reports in Colombia will be a participatory and voluntary exercise, and that at least in the first year of these recommendations (educational phase), this report will not be mandatory or subject to penalties, it is important for companies to be prepared and plan how they will focus their strategy to create a culture of sustainability, aimed at channeling opportunities in such a way as to reduce risks, given that there is no point in producing sustainability reports if there is no strategy to support the

Steps for guiding the adoption of the sustainability strategy

Much has been written about the reasons why companies should adopt sustainable strategies, but over time, those reasons have become more evident. Here we summarize, in the form of guidelines, the steps companies can take to move toward sustainability based on ESG/ASG criteria:

Conduct a diagnosis. Diagnosis is a necessary tool for identifying the current state of the company in relation to its management of the various ESG criteria, both from the point of view of the internal context of the organization itself and in relation to its environment and stakeholders. It also allows for the identification of senior management's level of ambition and opportunities for improvement in its management, becoming the basis for defining the initiatives that will shape the ESG strategic direction.
Assessing the company's impact. Identify which environmental, social, and governance factors affect it directly and indirectly.
Set objectives and targets. Once the most relevant ESG criteria have been determined, the company must set specific objectives and targets to address them, which must also be aligned with the Sustainable Development Goals (SDGs).
Integrate ESG criteria into the company's strategy. It is essential to map out a clear path for ESG criteria to become part of the core of the organization and for these to be internalized in the short or medium term. It is important to bear in mind that the sustainability strategy must be integrated across the company, incorporating ESG criteria at different levels of the organization, from senior management to front-line employees, and not be limited to a specific function or department.
Involve the team. It is crucial that all human resources within the company understand the importance of sustainability criteria and how they are being approached by the organization. They must receive training in environmental, social, and corporate values so that they can be part of the strategy and the established objectives can be achieved. However, commitment to change on the part of the management team is undoubtedly essential, because sustainability is a matter of leadership.
Measure and report progress. Measurement is key and also an important resource in terms of communication and improving reputation. However, it should be noted that regularly measuring and reporting progress toward sustainability objectives and goals is the final stage of a process.

Ultimately, proposing and developing a corporate sustainability strategy that is integrated into the organization's DNA is the best way to improve financial results, attract investment, and ensure compliance with current regulations (and even anticipate future ones). Because companies that fail to adapt will simply disappear.
How can RSM Colombia help you bring order to all this?
RSM supports you in implementing best business practices in sustainability, incorporating ESG criteria, and sustainability reporting, with defined methodologies and tools that allow you to identify and address emerging risks and challenges.
We promote innovative, profitable, and sustainable solutions within the framework of national government guidelines and international standards, that enable you to transform your current sustainability challenges into real opportunities for your business. If you want to know more about how l