Seven success factors for making the switch to a sustainable business

Seven success factors for making the switch to a sustainable business

Sustainability does not happen by itself. By focusing on the right priorities, a company can transform itself into a forerunner in sustainability. That transformation is essentially a change process that impinges on many parts of the business. There are a few crucial elements in this process.

Businesses can no longer afford to saddle the next generation with the adverse impact of their activities. Society simply doesn’t tolerate that type of behaviour any longer. The transition to becoming a more sustainable business is not a casual choice, but rather a necessity.

Wim Eraly – Senior General Manager, Corporate Banking, KBC Belgium

1. Developing a vision

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Sometimes there may seem to be good reasons to delay the shift to a sustainable business

  • The technology is not yet advanced enough
  • The scale of investments required is massive
  • The legislation is not yet clear.

‘Most of these arguments are easily countered, however. The main thing is to develop a vision and set things in motion from there,’ says Filip Ferrante, Director of Corporate Sustainability at KBC Group.

Every step you can take in this regard is one in the right direction. If one technology is not there yet, there may be another technology available that can be at least part of the solution. The financial picture of an investment also usually looks rosier when the long-term savings effects are factored in. And those who wait until the regulations are fully in place risk having to make sweeping changes quickly with little time to prepare.

2. Consultations with stakeholders

In the transition to a sustainable business, it comes down to regularly checking whether the priorities are right. Stakeholders can provide crucial feedback on this.

‘By speaking to employees, customers, suppliers, shareholders, NGOs or local authorities, you bring external views into the company. All these different stakeholders can challenge the business strategy. That provides inspiration and leads to innovation,’ says Filip Ferrante.

At the same time, companies must realise that all these different stakeholders also have other priorities. A company cannot satisfy everyone’s needs.

‘It is important to talk to stakeholders. But the company must then decide for itself which elements it takes away from those conversations and which it does not,’ says Filip Ferrante.

3. Working out tangible objectives

Many companies do not know where to start when developing their sustainability vision. The United Nations' Sustainable Development Goals are then often cited as a valuable framework. These are 17 objectives that can serve as an inspiration for choosing priorities.

‘The last crucial step is then to make the link to concrete targets. Until that happens, nothing will be genuinely addressed,’ says Xavier Baeten, who teaches Corporate Sustainability and Responsibility at Vlerick Business School.

4. Looking beyond global warming

Given the great urgency, a good deal of attention is focused on global warming and measures to reduce CO2 emissions. But sustainability is about much more than just climate.

It is also about:

  • Combating poverty
  • Gender equality
  • Health and well-being
  • Sustainable consumption and production
  • Biodiversity

‘Every company needs to analyse where it can have the biggest impact,’ says Xavier Baeten.

5. Attracting the right competences

Sustainability is a complex challenge. Gone are the days when a sustainability manager has to shape sustainability policy on his own.

‘A sustainable business needs specialists in a variety of fields: from sustainable mobility to diversity. If those competences are not present within the company, it is necessary to seek external help,’ says Xavier Baeten.

6. Changing your view of profit

Sustainable companies do not opt to maximise profits in the short term.

‘Sustainable companies are also allowed to make a profit,’ says Xavier Baeten, ‘but the way profit is viewed needs to change. In the old model, a negative impact on the environment has no impact at all on the company's financial result. The bill is simply passed on to society. That is not acceptable today.’

Companies now need to create sustainable value. The financial aspects are only one part of that. This means that a company must be willing to make sustainable investment decisions with a long-term vision, even if they do not deliver short-term profit.

7. Getting your employees involved in the transition

The sustainable transition starts with top management and trickles down to the rest of the company.

‘Sustainability can’t just start from the bottom up,’ says Wim Eraly. ‘That creates too many silos, each with its own priorities. That makes it impossible to develop the focus and resources to make structural changes.’

Xavier Baeten confirms this: ‘Sustainability must really be supported throughout the company. That starts with the board of directors and senior management. The big challenge is often to then engage all employees, because sustainability isn’t something that can be imposed. You can set up major awareness-raising campaigns, but in the end it comes down to talking to workers and finding out what is important to them and what they want to achieve. Only when they themselves genuinely believe in what they are doing will they convey this to the customers with whom they have direct contact.’

Sustainability in practice: Alro

Sustainability is at the heart of our business strategy

‘The green evolution is the only realistic option for the future and is the core focus of our business strategy,’ says Carl Bruynseels, Technical Director of Alro Group. The coating and lacquering company is a supplier to major car and truck manufacturers. Based in Dilsen-Stokkem, it currently coats parts for Audi and Volvo electric cars. Porsche also makes good use of Alro’s expertise

Traditionally, Alro has applied paint or coatings to various car components, but the electrification of the automotive sector is creating new opportunities. The components in the battery housing of electric cars, in particular, are a new niche. These parts require specialist treatment. To ensure optimum conduction, all abutting surfaces must be kept meticulously paint-free during the coating process. This used to be done using masking tape, but through its own R&D efforts, Alro has developed a laser application for this purpose. In addition, Alro has forged a partnership with the German company IPC, which has developed a coating for the battery housings for electric cars. This coating can considerably slow the spread of a fire

Alro is not only using new technology to respond to the transition towards sustainability. Its own production processes have also become much more sustainable in recent years. Where possible, the company uses water-based paints rather than the more polluting solvent-based products And the coated parts are now bake-dried at a lower temperature, so that the ovens consume less energy. The residual water left over from the production processes is also reused as far as possible, and the company generates its own energy using solar panels and two wind turbines. ‘We try to keep our environmental footprint as small as possible. A green revolution is undeniably taking place. We see it in our customers, who are increasingly demanding more in terms of sustainability. If we weren’t so committed, it would often not be worthwhile even quoting for contracts,’ Carl Bruynseels concludes.

KBC expressly points out that the use of terms such as 'green' and 'sustainable' on this webpage in no way suggests that what is described is already (fully) in line with the EU Taxonomy.