‘Plotting out a genuine sustainability policy means more than simply drawing up a report once a year’, says Xavier Baeten. He lectures in corporate sustainability and responsibility at the Vlerick Business School and sits on KBC’s External Sustainability Board – an independent advisory panel made up of experts from the academic world. ‘I advise businesses to set out concrete objectives, to commit to innovation and to focus on the long term.’

According to Xavier Baeten, sustainability is part of KBC’s DNA. ‘I’m sure it has something to do with the cooperative thinking that underlies the bank.’ The financial group was created in 1998 through a merger of several firms including CERA bank, which had descended in turn from mutual savings and loans organisations and later the Raiffeisen savings banks. ‘In the wake of the 2008 financial crisis, there was a very powerful impulse towards sustainability at KBC from senior level. Thomas Leysen and Johan Thijs, the company’s chairman and CEO respectively, gave the theme an immense boost. The focus previously had primarily been on offering funds with a green colour (ecologically driven): after that, a much broader view was taken. Hence the independent experts who now sit on the advisory board. My area of expertise is remuneration policy and the social aspect more generally.’

‘A sustainability report on its own won’t get you very far. You state that you’ve emitted about 5 percent less carbon. But what does that mean? Is it sufficiently ambitious? It’s important to set out your goals. I advise businesses to look at the 17 Sustainable Development Goals (SDGs) that the United Nations has adopted as the new global sustainable development agenda for 2030. These are the worldwide targets for sustainable development.’

‘Businesses have to realise that they can’t score highly in all 17 fields at once. So it’s important to set the right priorities. You can’t perform at the same level in every area. Which goals relate most closely to your business? Name them and set material targets to pursue. Targets, in other words, that are important to both your stakeholders and your organisation. You should also make it possible to make the necessary adjustments along the way.’

According to Baeten, it is important that the business as a whole gets behind the sustainability strategy, while also concluding that a top-down approach works most effectively. ‘It’s important for management and the board to be fully supportive of the policy – by ensuring, for instance, that bonuses don’t depend, or not entirely, on profits, but also on sustainability goals.’

‘This approach is entirely at odds with traditional thinking. It only works if you take a long-term view. You have to invest in the short term to achieve sustainable results in the future. Sustainability rarely if ever translates into profits immediately. Companies really do have to stick their necks out. Businesses like Solvay and Umicore are a rarity in that regard in Belgium.’

Baeten harks back to innovation as the driver of this long-term thinking, citing the example of the Finnish oil refiner Neste. ‘It’s one of the most sustainable companies in the world. The company takes leftover oil and fat from fast-food outlets – it pays for their waste – and refines it into diesel for buses and trucks. The fuel emits 90 percent less carbon as a result.’

Baeten concludes by citing the importance of an ethical compass for all employees. ‘It’s always important to put ethical themes on the table regularly and to discuss them with colleagues. People often lose sight of moral guidelines when they come under pressure. That’s a risk and one we have to look out for all the time, however soft that might sound. You can’t draw up hard-and-fast rules for it. A CSR policy is not a precise science.’