In business, the term “burning platform” describes a situation where a drastic change is required to current operations and continuing as before is not an option. We’re all doing business on a burning platform – our planet.
The purpose of business is about to change
In 1970 one planet Earth was sufficient to resource humanity. In 2024 we need 1.7 Earths1 and in 2050, only 35 years from now, we will need 3 planets2. The production of plastic has increased 20-fold during our lifetimes, and only 10% has been recycled. Currently, 60% of mammal biomass is livestock3. And the list goes on. It’s clear that sustainability is not only a reporting directive incited by the EU, but something that is going to change the way we do business.
In the past, the sole purpose of most businesses was to make a profit and grow their shareholders' investment. This is about to change: sustainable business means operating business in a way that the environment, community, and society as a whole are not harmed. All change, especially major transformations like the one we are experiencing, need to be led and managed. But how to get started?
1. Understand your current situation
To start, you need to know where you are now. In the Corporate Sustainability Reporting Directive (CSRD) Double Materiality, you assess your business’s impact on the environment and society. The Double Materiality also considers how changes in the environment and society may affect future profits, thus future-proofing your business.
2. Set and state your ambition
Where do you want to go? Leading change requires decisions, some of which may have a negative impact on the financial profit of your business in the short term (yet nothing compared to the cost of doing nothing in the long run). The ambition for sustainable business needs to come from management, the board, and owners, as it may mean the purpose of your business changes. The findings from the Double Materiality assessment should be aligned with your business strategy, targets, and activities. A transformation means you need everyone on board: it’s equally important to communicate the ambition as it is to state it.
3. Map the relevant data
Once the objectives are clear, you identify the relevant data streams and points needed to measure the change. The EU CSRD has over 1100 data points to choose from – the relevant ones will be defined by your Double Materiality assessment. You also need to consider what data is available, how reliable it is, and – if it’s not available – is it possible to start collecting data. You also need to consider through whom you could access this data, for example your subcontractors.
4. Analyze and report your impact
CSRD sustainability reporting is done together with financial reporting. This means you need to collect the data during the previous fiscal year. To start, you will likely use a spreadsheet to collect the data, however as the process becomes part of normal operations, sustainability data will flow through your systems just like operational and financial data.
5. Measure your sustainability activities and adapt your strategy
Based on the sustainability data and analysis, you’ll be able to follow the impact of your activities and plan new ones. You should also revisit and restructure your business strategy, objectives, and roadmaps to make sure all respective activities and organizational incentives are aligned with the data.
Vincit Sustainability Architecture webinar recording (in Finnish)
Sohvi Salmelin,
Strategy & Business Design Lead at Vincit
