Developing a sustainability strategy using an example and framework will make your life a lot easier. In our first sustainability strategy post, we covered:
- First, map and understand your value chain to reveal where the biggest ESG impacts occur.
- Second, list and assess these impacts, ensuring you account for both risks and opportunities.
- Third, engage stakeholders, both internal and external, to gain insights and refine your understanding of what truly matters.
With the help of sustainability expert Annemie Godts – who helps companies in building a sustainable future – let’s now look at the next steps of the sustainability framework with some examples: the stakeholders, prioritization and bringing it all together in a solid strategy
3. Engage with your stakeholders
« Tune into your environment – what you hear today shapes tomorrow »
To effectively prioritize ESG (Environmental, Social, and Governance) impacts, organizations should engage both internal and external stakeholders in a structured and collaborative process.
- Internally, leadership teams, employees, and department heads should collaborate to identify and assess ESG issues that align with the company’s values, strategy, and risk profile.
- Externally, stakeholders such as customers, investors, regulatory bodies, and local communities offer valuable insights into which ESG areas are most critical according to them. Also distinguish between the direct actors in the value chain (e.g., suppliers, manufacturers, distributors) and indirect actors, such as regulators, NGOs, or third-party organizations that influence or control the sustainability practices in the value chain.
The value chain developed in Step 1 from the sustainability framework will serve as a guide for identifying the key stakeholders with whom it is useful to engage.
Lookig back to the typical value chain mentioned earlier, potential stakeholders to engage with could be:
- Raw materials: Sourcing and procuring raw materials from suppliers.
| Environmental impacts | Environmental NGOs, Local communities, Environmental agencies, Sustainability certifying bodies (e.g.Fairtrade) |
| Social impacts | Labor unions, Human rights organizations, Local communities, Suppliers and subcontractors |
| Governance impacts | Anti-corruption bodies, Ethical trading organizations, Industry associations, Investors and shareholders, Suppliers |
- Transport: Moving raw materials and finished goods between different stages of the value chain, from suppliers to manufacturers and eventually to customers.
| Environmental impacts | Transport and logistics providers, Environmental regulators (air quality, emissions), Fleet management companies |
| Social impacts | Labor unions, Local communities impacted by transport routes |
| Governance impacts | Compliance bodies for transport law, Industry associations, Transport and logistic providers |
- Manufacturing: Transforming raw materials into finished products.
| Environmental impacts | Environmental protection agencies, Local governments, Sustainability consultants, Utility providers |
| Social impacts | Employees and labor unions, Occupational health and safety organizations |
| Governance impacts | Compliance and regulatory bodies, Internal auditors, Industry bodies (for standards), Insurance company |
- Packaging: Packing finished products, ready for shipping to consumers, retailers or warehouses.
| Environmental impacts | Environmental NGOs, Packaging suppliers, Recycling and waste management companies |
| Social impacts | Employees and labor unions (packaging workers), Health and safety regulators |
| Governance impacts | Regulatory agencies (packaging standards), Packaging industry associations, Investors interested in circular economy practices |
- Distribution and logistics: Moving products to warehouses, retailers, or directly to consumers.
| Environmental impacts | Logistics provider, Utility providers (energy efficiency initiatives) |
| Social impacts | Warehouse employees and labor unions, Occupational safety regulators |
| Governance impacts | Ethical supply chain organizations, Compliance auditors |
- Retail and business channels: Marketing and Sales activities promoting and selling products.
| Environmental impacts | Retail partners, Energy efficiency organizations, Organizations providing building standards |
| Social impacts | Consumers organisations, Consumer protection agencies |
| Governance impacts | Investors, Regulators (consumer protection laws), Ethical marketing bodies |
- Use phase
| Environmental impacts | Consumers assiciations |
| Social impacts | Consumer advocacy groups, Health and safety regulatory bodies |
| Governance impacts | Compliance and certification bodies, Product safety regulators |
- End of Life: Managing product disposal, reuse, or recycling at the end of its life.
| Environmental impacts | Recycling organizations, Waste management companies, Environmental NGOs |
| Social impacts | Local communities, Regulatory bodies for waste disposal |
| Governance impacts | Waste management regulators, Compliance bodies for environmental law, Investors interested in sustainability |
When selecting stakeholders to engage with, it’s essential to focus on those most affected by or influential in relation to the specific ESG impacts identified. Prioritizing key stakeholders—such as employees, suppliers, customers, and regulatory bodies—ensures meaningful engagement. It’s important to involve a diverse mix of stakeholders to capture a broad range of views.
The number of stakeholders to involve will depend on the engagement method; for example, surveys may include a broader group, while focus groups or interviews should focus on fewer, more critical stakeholders to ensure deep, actionable insights.
By conducting surveys, focus groups, or interviews, companies gather diverse opinions and identify key ESG factors. This engagement ensures that ESG priorities are aligned internally while remaining responsive to broader societal, environmental, and market expectations.
The following video highlights the importance of engaging with stakehoders and demonstrates how this engagement can significantly influence a company’s success or failure : https://www.youtube.com/watch?v=VHGTsEwbOJY
4. Focus on what matters by prioritizing ESG impacts
« Cut through the noise – focus on what fuels your impact »
Once you have a comprehensive list of impacts, the next step is to conduct a materiality assessment in collaboration with internal and external stakeholders. This process helps identify and prioritize the Environmental, Social, and Governance (ESG) issues that are most critical to your business, ensuring that significant risks and opportunities across your value chain are effectively addressed.
The assessment should consider the following dimensions according to the CSRD:
- Whether the impact is positive or negative.
- Actual versus potential impacts (what is the likelihood of occurrence).
- The severity of the impact and the extent of damages or benefits it causes.
- The scope of the impact, whether local, widespread, or global.
- Whether the impact is reversible or remediable.
- The opportunities or risks associated with the impact.
How to perform this assessment in practice:
This process is often referred to as a double materiality assessment cfr the CSRD. On one hand, you evaluate your company’s impact on people and the planet, and on the other, you assess how these impacts may affect your business in terms of risks and opportunities. This dual perspective enables you to determine which ESG issues are most relevant and urgent for your business.
« A roadmap for tomorrow starts with today’s choices »
Once the materiality assessment is complete and stakeholder inputs have been gathered, the company can develop its strategy by focusing on the highest-priority ESG issues. This decision-making process should involve the company’s senior leadership, the Executive Committee (Comex), Board of Directors or the highest governance body within the company, to ensure alignment with overall business objectives.
Prioritization should carefully balance stakeholder concerns with the company’s strategic goals, ensuring that the most impactful and relevant ESG initiatives are addressed. Decisions at this stage will guide the company’s long-term sustainability strategy, shaping its actions and commitments moving forward.
To effectively manage the process, a core team should be established to handle the preparatory work. This team should be multidisciplinary, drawing members from various departments such as sustainability, operations, procurement, human resources, finance, and legal.
Their role at this stage is to develop the initial long list of potential material impacts, ensuring that the diverse expertise within the team captures all relevant ESG aspects across the business.
A steering committee (Steerco), comprising representatives from all relevant business lines and supporting services, such as strategy, risk management, and corporate communications, should oversee the process. Reporting directly to the Board or CEO, the Steerco is responsible for reviewing progress and aligning priorities with business strategy.
This collaborative approach is also a great way to onboard employees across the organization, fostering a culture of sustainability. By engaging various departments and business lines early in the process, you create ownership and ensure that ESG goals are integrated into day-to-day activities.
Want to explore the impact of your sustainability on your business strategy? Book a 0,5 day workshop or keynote with Annemie and myself. Reach out via the contact form on this website.
