Ongoing research into sustainability reveals that companies worldwide are continuing to struggle with integrating it into their organisations, despite the growing strategic importance of environmental, social and governance (ESG) demands.According to Nadine-Lan Hönighaus, global ESG governance lead at KPMG International, their research indicates that more than half of the companies surveyed have found that sustainability responsibilities still primarily rest with the CEO."Only about 50% of the companies we interviewed have a chief sustainability officer (CSO) in place. More often than not, the CEO is also tasked with fulfilling the CSO role," she noted, highlighting the significant challenge this places on CEOs. "The CSO role is very demanding, with a wide range of functions, and meeting its requirements simultaneously with those of a CEO is exceptionally difficult."She emphasised that having a CSO in an organisation was crucial, but equally important was their direct reporting line to the CEO and their inf luential position within the organisation to drive meaningful change. Furthermore, for any CSO to achieve significant success, they needed a dedicated budget and a seat on steering committees within the company, as this was essential for implementing lasting change.Simon Weaver, global head of ESG strategy at KPMG International, highlighted the ongoing challenges with transformation in sustainability efforts. "When I speak to sustainability experts within organisations, I frequently encounter three main challenges," he explained. "Firstly, they often feel isolated in their efforts to extend planning horizons across the organisation. Secondly, while there is a clear understanding of the importance of sustainability initiatives, there's often a shortfall in allocating sufficient financial and capital resources to meet these objectives. Lastly, they frequently express a sense of responsibility for everything related to sustainability but lack sufficient control over the outcomes."Speaking during a recent online event, Hönighaus emphasised that it was critical for companies serious about ESG to appoint a CSO for their organisation. She further stressed that, given the escalating regulatory environment and growing ESG reporting demands, companies must adopt a holistic approach. This includes ensuring they have the right people in appropriate roles with a clear understanding of their responsibilities and the necessary resources to deliver on their ESG commitments.She described sustainability transformation as a significant change process that should be substantial rather than superficial. “It takes courage to undertake such transformation and, understandably, organisations may sometimes fear feeling overwhelmed.”According to Control Risks, ESG regulation globally is set to increase, while stricter enforcement can also be expected. It has also found that regulatory standardisation is on the rise.Oliver Naidoo, managing director of JC Auditors, said incorporating ISO standards into a business’s ESG strategy allows the company to offer a robust and reliable mechanism for assessing and enhancing sustainability performance. “Standards like ISO 14001 for environmental management and ISO 45001 for occupational health and safety provide clear requirements for setting objectives and targets, which are crucial for effective KPI reporting. This not only ensures compliance, but also builds credibility and trust with the various business stakeholders."Naidoo said moving forward it would be essential for businesses to not only understand but also embrace the principles of ESG.“The International Organization for Standardisation (ISO) standards play a crucial role in enabling a business to meet international ESG demands. ISO standards provide a comprehensive framework that supports businesses in setting, achieving, and reporting on their sustainability goals, aligning perfectly with ESG principles,” he said. Furthermore, ISO standards not only allow businesses to demonstrate tangible evidence of their ESG performance, but also enable them to protect their brand through a risk-based approach. This approach ensures that businesses are not just meeting current standards but are also prepared for future challenges, safeguarding their reputation and operational integrity.There's often a shortfall in allocating sufficient financial and capital resources to meet sustainability initiatives.– Simon Weaver – KPMG“
