Building a sustainable business: 5 tips for ESG success

In our first blog, Barco, Nitto, VPK Group and delaware explained what triggered them to embrace sustainability. Ann Peeters proved them right, confirming the value that ESG creates: “Businesses that develop strong ESG practices and policies not only catch the eyes of investors, customers and talent. They also achieve better economic results.” 

Whether you are enthused by their stories or already busy with ESG and curious how your peers are faring: here are 5 tips – or call it a short roadmap to ESG success.

Tip 1: Make ESG an integral part of your corporate strategy

Your business is probably already engaged in several environmental and social initiatives. These days, who isn’t? Still, now that ESG is firmly becoming more mainstream and regulations ever stricter, that is no longer enough. ESG must enter the boardroom and drive corporate investments.

“Our recycled cardboard and paper are circular and we have been saving energy and water for years, but we wanted to raise our ambitions,” says Erik Peeters of VPK Group. “In 2019, our management and board unanimously decided to review and refine our approach to sustainability.”

“We chose to incorporate ESG topics into our decision-making process in 2018, with the full support of our board and shareholders,” continues Sam Strijckmans of Japanese multinational Nitto. “The EU Green Deal is now the starting point of our strategy and long-term objectives: for every decision we take and every investment we make, we first check if it is sustainable. Our colleagues in Japan depend on us to set the example.” 

The same story at tech company Barco, whose corporate strategy is based on five pillars. ‘Go for sustainable impact’ is one of them.

Tip 2: Don’t rush in. Understand your impact first 

A robust ESG strategy requires that you understand the impact your business has on society and the environment. Only then can you start deciding which topics require action (first). “We can see how many firms are taking ESG initiatives but struggle in setting priorities,” says Ann. “A materiality assessment is a great way to start: ask your stakeholders which topics matter the most, summarize the results and then pick your battles.”

In the experience of Nitto, VPK Group and Barco, this assessment was fundamental for professionalizing their ESG strategy. Barco regularly renews the survey to make sure it reflects the actual challenges, explains Jan Daem: “Every few years, we consult our internal and external stakeholders to understand what they consider ‘material’ topics to tackle. In 2021, we added a dynamic analysis to see how our material topics will most likely evolve. Diversity and inclusion, for example, is now high on Barco’s agenda.” 

Ann stresses that such an ambitious materiality assessment is difficult for smaller companies. That’s why Agoria included a list of 12 material topics for Belgian tech firms in its first sustainability report. These are ideal as a guideline for companies wishing to kickstart their ESG initiative but with fewer resources than trendsetters like Barco, Nitto and VPK Group.

Tip 3: Pick your battles wisely and set targets 

So, no matter how big or small your company, start by understanding which topics matter most to your business and prioritize them. For manufacturing firms like Nitto, the environment was a logical priority. “We set ourselves the ambitious target to become a carbon-neutral company by 2045,” Sam explains. “That is five years ahead of the EU timeline and we’re well on our way, thanks to investments in ‘low-hanging fruit’: 100% green electricity, LED lights, renewable energy via solar panels, etc.” 

“Now we’re focusing on innovation to make our products greener. All solvent-based adhesives, for example, will be replaced by an emulsion-based alternative. Step three is our supply chain. Nitto has begun evaluating suppliers based on ESG criteria.”  

“VPK Group cardboard is circular by origin, so we can skip the green-product part,” Erik adds. “Reducing the environmental footprint of our operations – waste, energy and water, however, is high on our priority list. Frameworks like the UN Sustainable Development Goals (SDG) and the external audit system help us to structure our actions and remind us that social and corporate governance are equally important for sustainability. That has been confirmed by our materiality matrix: workplace safety and employee engagement really matter to our stakeholders.”

Tip 4: Get organized and walk the talk

Putting sustainability at the heart of your business, requires solid decision-making, the ability to knot the ends, accountability and the focus to monitor progress. In other words: your organization must invest in sustainability governance.

At Nitto, the regional HQ director shapes the ESG policy, while the operational entities are responsible for its execution. Just like VPK Group, Barco appointed a sustainability manager who has global responsibility for the sustainability program. “A steering committee, workstreams and ambassadors all help to ensure continuous improvement and commitment across the business,” Jan explains.

“That commitment across the business is crucial indeed,” Sam adds. “We make sure to share our plans, ideas and successes with everyone in the company, before sharing them with the outside world, and we encourage our employees to take initiatives themselves. That’s a fantastic motivator to get everyone on board. It sparks a great vibe throughout the organization.”

Tip 5: The truth lies in measuring

While reading all the above, did the word ‘greenwashing’ come across your mind? We hope it didn’t, yet if it did: we can’t blame you, as many organizations did use this trick in the past. Yet, one look at the integrated or sustainability reports of Barco, Nitto and VPK Group, an overview of their certifications and the reports of the ESG rating agencies that critically audit their processes, should convince you.

“Transparency, KPIs and measurements are the way to lift the greenwashing concerns,” says Jan. “And still, it’s not easy, as there are so many different rating agencies, standards and qualifications that it is hard to compare results. I’m confident that will change for the better in the future. For now, we cannot but set meticulous KPIs and clear targets, measure our progress and report as detailed and transparently as possible.” 

“That’s where data and technology come into play,” Evelien concludes. “To boost your sustainability performance and meet the reporting duties, you need to collect, process and analyze big amounts of data. A solid data infrastructure, data-driven solutions and AI can help to generate more datasets, combine them, analyze them, make predictions, and much more – to then transparently report on them.”

Yep, then the round-table discussion entered our field of expertise: data and technology. And everyone unanimously agreed that they are quintessential in their ESG efforts. Check out blog 3 to read why measuring, analyzing and reporting is key and how data and tech can help.