"We believe that for any business to be future-ready and create long-term value; a sustainable, purpose driven business model design should be paramount."
Sustainability to us means that organisations focus on three pillars simultaneously – environmental, social and governance (ESG) performance. Understanding, measuring, reporting and continuously improving impacts across all three dimensions, contributes to greater organisational resilience, stakeholder satisfaction and competitiveness. ESG is a way of measuring sustainability metrics used to describe the transparency, sustainability and performance of a company which can support future growth prospects, attract and retain talent as well as further innovation of less harmful products and services.
Today it is no longer a question of whether a company ‘should’ become sustainable - because doing nothing is not an option -the question is how fast and targeted companies will respond. We truly believe this is the right thing to do.
Right now, for most entities, there is a growing business imperative to address sustainability. Material risks and opportunities companies face are broadening and becoming more complex with the realities of climate change, global health pandemics, calls for more transparent supply chains and rising pollution levels as countries industrialise.. These mounting risks are seeing a global movement emerge driven by capital markets, governments, NGOs, local communities and other stakeholders calling for greater transparency and accountability across the ESG spectrum to better understand the true impact of business and industry on our environment and communities.
To date, the business community and economic system we operate in has not fully accounted for the true cost of doing business. As such many externalities such as pollution, community health impacts and lack of justice continue in to be unaccounted for
In addition to being the right thing to do, a variety of research and studies show that sustainability creates value for businesses. It increasingly suggests sustainability improves financial performance, builds customer loyalty and attracts and engages employees.
By rethinking our businesses through the sustainability lens, we can unlock value and create positive change.
At BDO, we aim to inspire, educate and lead an unstoppable movement for sustainable business practice in our markets.
Part of the challenge for many businesses is understanding where to start. BDO’s roadmap is not meant to be linear, and the adoption and execution of sustainability will not be the same in any two businesses. In some cases, a company may leapfrog several steps or be forced to join in at the ‘compliant’ stage. But what is important, is understanding that it is a journey – an ongoing journey that will increase in value and importance.
BDO has developed a five-stage maturity roadmap that helps illustrate the sustainability integration journey.
It aims to help simplify the complexities of sustainability and to promote the value that sustainability integration can create for a business.
- ACTIVATING – A business at this stage is looking to ACTIVATE their sustainability agenda by assessing and prioritising their materiality risks and opportunities through the lens of various stakeholders. The process involves education, training and a review of the business operations and governance.
- COMPLIANT – A business at this stage has elements of a sustainability programme in place, albeit on an ad hoc basis as a result of being REACTIVE and narrowly focusing on responding to regulatory and stakeholder requirements.
- PROACTIVE – A business at this stage has approached their sustainability programme in a systematic, whole-of-business approach, looking to boost value creation opportunities internally as well as externally.
- STRATEGIC – A business at this stage has embedded sustainability across most parts of the business and is developing products and services, with a focus on circularity and technology, and ensuring they have a positive impact in the markets they operate in.
- PURPOSE DRIVEN – A business at this stage has embedded sustainability across all parts of their business and is using social, economical and environmental criteria beyond what is required by law to positively impact those in their value chain.
BDO has developed several Sustainability tools to help raise awareness around how sustainability concerns impact their organisations.
These tools also provide guidance on the path to achieving and transforming for a sustainable future.
Sustainability is a journey which means constant monitoring and assessment of a sustainability programme even once a programme has been designed. Below illustrates the approach that BDO takes in addressing the continuous improvement process which aims to consolidate an organization’s commitment to sustainable development, focusing on the measurement of impacts, corporate objectives and change management.
In an ever-evolving sustainability landscape, BDO has been providing our clients value driven sustainability services for over 20 years. The following three phases tracks how BDO can assist clients on their sustainability journey following our five-stage maturity integration roadmap (Emerging, Basic, Advanced, Leading, Innovator).
DEFINE REPORTING PLAN. Define and plan the activities to be carried out, taking into consideration corporate objectives and consistency with internationally recognised standards for non financial reporting and other regulatory frameworks recognised as best practice. BDO supports the organization in setting up the process, identifying the most appropriate methodology, alignment with corporate priorities, defining parameters and activities, conducting materiality risk assessment and ensuring stakeholder engagement.
ANALYSE AND MEASURE. Within this phase BDO selects tools and processes (including advice around reporting frameworks) to effectively capture ESG data and content. BDO supports the organisation in collecting the necessary information, verifying the data, and ensuring that the data & sequence is interpreted and correctly captured within the defined report parameters.
REPORT AND IMPROVEMENT. During this phase BDO facilitates the preparation of the final draft of the report based on careful analysis and collaboration with management. As a result of this coordination effort, BDO supports the organisation in defining the contents by ensuring the alignment with the appropriate reporting frameworks and regulatory requirements, also providing stylistic refinement for effective and transparent communication.
BDO supports our clients towards a strategic path of reporting, communication, dialogue and positioning among its stakeholders and market:
- MATERIALITY ANALYSIS, is the foundational activity for the start of reporting. It consists of identifying the primary impacts of economic, environmental and social elements, summarized in a Materiality Matrix. This methodological analysis helps to determine the broader dimensions of the company, defining its strategic role with respect to the sector and the challenges within a national and international context.
- STAKEHOLDER ENGAGEMENT, an activity carried out with the purpose of updating the Materiality Analysis. BDO would propose a strategic engagement programme with key stakeholders to ensure communication and alignment of programme objectives.
- "INTEGRATED THINKING" aims to look at a business wholistically to find value-creation opportunities using a combination of financial and non-financial methods. BDO accompanies the organization in a journey of value creation including a short, medium, and long-term horizon. Using internationally recognized frameworks, BDO promotes ESG reporting processes that allow the periodic publication of non-financial report (besides the annual financial report), or integrated financial report - namely a single annual document containing both financial and non-financial information in accordance with industry standards.
- ROLE OF THE SUSTAINABLE DEVELOPMENT GOALS - The SDGs encourage business to make sustainable development a central part of their business strategy to ensure organisations meet the needs of the present without compromising the needs of generations to come.
Given the transformational nature of integrating sustainability into an organization, BDO has developed comprehensive advisory support to ensure we offer clients best-in-class solutions.
BDO’s global reach across 164 countries and workforce 97,200+ enables us to work globally while acting locally. We benefit from a global presence, access to industry and commercial insights and a globally diverse workforce that our clients can access. Our global sustainability services framework stitches together BDO’s best, both from service expertise to industry experts.