Tone at The Top Strategy and Roll Out in the Life Science Industry – Digital!
In response to customer demand for proof of their sustainability actions, our client engaged EcoVadis, one of the largest European rating agencies, to rate their sustainability performance. The results were not good. At the same time, the corporate social responsibility department and the finance department triggered a materiality analysis and identified numerous mitigation activities. The company board decided not to manage these activities centrally with a sustainability program, but instead split the activities between the responsible departments. For the HR department, this resulted in a significant challenge:
- As around 40% of the EcoVadis test grid was relevant to HR, and the materiality analysis identified five action fields in HR, a significant portion of the work would fall to the HR department.
- HR was in the middle of an HR transformation program and struggled to find solutions in a tight timeframe.
- The HR department viewed the requirements made by EcoVadis and the internal departments as an additional burden that they were unlikely to manage.
Analysis and Complexity Reduction
The first task was to provide the client with an overview of the situation and clarify the requirements.
- There was a large and diverse amount of relevant material. We reduced complexity by collating different approaches and perspectives that already existed in the organization.
- We chose GRI as a reference point, in part because reporting to CSR/Finance on materiality topics was the most urgent task.
- We transposed existing material using GRI as a reference point and identified any gaps.
Sustainability topics cut across all HR functions and were hitting an already over-burdened global HR organization. We ensured that all leaders:
- Understood why sustainability is essential, both from a risk and an opportunity perspective, and why it should be an integral part of any HR strategy
- Understood what parts of ESG/Sustainability are most relevant to HR
- Understood how this topic supports existing strategic initiatives by adding another perspective and a higher sense of urgency
- Received a blueprint for a structured management approach to ESG/Sustainability topics to reduce the complexity of cross-functional topics
- Gave commitments to co-design the management approaches for the individual materiality topics, including KPIs and targets.
- Co-Design of Management Approaches
- We supported HR topic owners with project management, provided expertise, and established sparring partnerships to create consistent, MECE, and detailed management approaches per topic, with the right set of KPIs and suitably ambitious targets.
- Preparation for Reporting
- Different reporting requirements were met by management approaches that contained all necessary information to both fulfil CSR/finance requirements and EcoVadis requirements.
At the end of the project, we reflected on the client’s results and achievements:
- We helped the client create five valid management approaches that defined targets and how to reach them in the following five years.
- HR defined core KPIs on a GRI basis and set up a data collection strategy suitable for sustainability reporting.
- The client created a management approach blueprint that will work for potential future requirements.
- The EcoVadis recommendations were substantially reduced within six months and the rating improved dramatically. There was a significant ‘pay-off’ of the work in reducing complexity, creating structure, and transposing capability: With sustainability integrated into the existing HR strategy and a standardized management approach, blueprints for materiality topics – including KPIs and targets – the HR department received company-wide recognition for the speed and quality with which they had delivered.
The revelations and insights that we can use in future projects
- It is challenging to align sustainability topics as they cut across departments, divisions, and teams. A clear and early focus on storytelling and communication and on stakeholder management is essential.
- Decentralized management of sustainability requirements results in inefficiency and frustration. We would always recommend setting up a program to align efforts throughout the entire organization The revelations and insights that we can use in future projects
- Without explicit support from the Board of Managing Directors regarding sustainability targets, the efforts by the organization will only lead to moderate success and won’t fulfill the existing regulatory reporting requirements.