Society faces several pressing sustainability issues, from the climate crisis to biodiversity loss and growing inequality. The shift towards a more sustainable world must happen now. And companies have a crucial role to play.
"Not only should companies invest in compliance with rules and regulations and correct reporting, but they would also do well to deploy credible sustainability communication to inspire employees and stakeholders in the wider value chain to action," says Michael Wagemans, Head of Sustainability at KPMG in Belgium.
"Our socio-economic model is shifting to stakeholder capitalism, whereby companies want to create as much value as possible, not only for themselves, but for all stakeholders, including employees, suppliers, local communities, and assets like nature," says Michael. "Companies have an immense responsibility and can generate a lot of positive impact. Unlike governments and NGOs, companies pursue a revenue-growth model, which allows for scalability and unlocks unique capabilities and opportunities to combine planet, people, and profit."
CSRD on the horizon
"The Corporate Sustainability Reporting Directive (CSRD) requires companies to report extensively on sustainability. Companies currently subject to the Non-Financial Reporting Directive (NFRD) are already expected to report in 2025 on 2024 data. Other companies covered by the CSRD have an additional year to prepare," says Rihab Kaibi, ESG Reporting Specialist at KPMG Sustainability Advisory in Belgium. "Either way, in reporting time, the CSRD is coming up very quickly. I encourage companies to prepare now and recommend starting with a gap analysis so that you at least know what to expect. The challenge is often that data is scattered throughout the organization. Finding a model to track and systematically maintain reliable, measurable data is a tough process for companies."
A little more conversation to get a lot more action, please
"Reporting and communication should not get in the way of action," says Michael. "On the contrary, communication is especially important as a means to spur people into action and should aim to do so. Companies that get it right inspire and create engagement. They communicate not to polish their image or reputation as sustainability leaders, but to reinforce the action they have in mind. Successful communication should move people into adopting more sustainable behaviors."
"Sustainability transformation is really a story of change management, where we have to start doing things in a different way," says Michael. "It means that as a company you have to communicate in the most effective way possible to bring about that change."
"Communicating about sustainability goes beyond sustainability or ESG reporting. It is woven into the whole process and is best engaged from the start, with the development of the sustainability strategy," says Michael. "After all, when companies are serious about using their communication channels to inspire people to act, it's a good idea to think about how they can do so throughout the entire sustainability transformation process.”
Effective communication happens both in a top-down and bottom-up manner. Of course, the tone at the top needs to support the sustainability ambitions. In the absence of executive support, it’s practically impossible to move forward. But there should also be room for grassroots action, by giving employees channels through which to engage with sustainability. Newsletters, community calls, open house days, employee volunteering; all of these can be vehicles to raise awareness, enhance understanding, and ultimately move people into action.”
Sustainability is not just a ‘good news’ show
"When organizations communicate around sustainability from a purely marketing angle, they quickly enter the danger zone," says Michael. "A lot of companies still miscalculate. My message is: it should not only be a ‘good news’ show. Be honest and transparent about your ambitions and actions; what goes well and what you are struggling with. That's the only way to earn credibility. Vague marketing language and stock photos of wind turbines stopped working a while ago; stakeholders see straight through this and are not impressed – and rightly so. Make no mistake: there’s no credible communication of sustainability without rock solid claims."
Time to move beyond the go-it-alone mentality
"If we really want to get traction on the sustainability agenda, companies need to move away from the winner-takes-all model and focus on cooperation to address broader social and environmental challenges across their value chains," Michael argues. "A good example of this is the concerted global effort to improve sustainable palm oil production, which requires multi-stakeholder commitment across every stage of the supply chain. This collaborative effort relies on a wide range of linked actions, such as securing fair wages and labor conditions for agricultural laborers, ensuring farmers and producers receive a fair price for their crop, training to improve production methods and reduce negative impacts on local biodiversity and critical ecosystems, and educating consumers through initiatives such as the Rainforest Alliance. Together you can have greater impact. And communication should support this eco-system approach."
Connecting with the head and the heart
"The winners will be organizations that start working proactively and pragmatically today," concludes Michael. "Those who demonstrate strong sustainability performance through facts and figures, while at the same time succeed in appealing to people’s emotions, thereby goading them into action. When it comes to motivating your stakeholders to act, it’s important to remember that the heart is triggered through communication, while the head looks for evidence in the reporting. The most effective companies are skilled at doing both.”
Engaging sustainability reporting and communication
Do you want to report on your sustainability ambitions, actions and accomplishments, and/or deploy credible sustainability communication to inspire your stakeholders? Our KPMG experts can help you on your way. Discover our full range of sustainability services or contact Michael Wagemans, our Head of Sustainability.
Arvesta is the full-service partner for farmers and horticulturists, specializing in animal nutrition, agri and horticulture and retail with their Aveve and Eurotuin stores. Their mission is to increase the profitability of farmers and horticulturists through sustainable innovations. KPMG in Belgium helped Arvesta with their entire sustainability journey, from strategy formation to materiality analysis, communication and reporting. By investing time and energy in tailored communication, we helped prepare them for sustainable action and got all their employees on board.
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