Once the opportunities and risks have been identified and you have considered priority areas, you are ready for step two.
At this stage, the board and management will determine how the company should position itself strategically when it comes to sustainability in order to achieve its vision for the future. The board is ultimately responsible for compliance with international guidelines and laws and outlining sustainability efforts in the right way is therefore their responsibility too. Often, a decision by the board will be needed to invest resources or change certain business processes. Getting the board and management to commit themselves is crucial for the success of any sustainability programme.
At this stage, the company's board and management will:
- Identify core values
- Set priorities
- Establish goals
- Produce policies and guidelines
- Determine how the company will work with sustainability
Establish core values
In order to establish a strong corporate culture, it is essential that values and principles are commonly agreed. These soft values underpin your policy and guidelines and may in some cases consist only of a few but, nonetheless, important value words. Examples of value words are equality, diversity, transparency, environment and consideration. Core values are directly related to your company’s identity, in other words, what you want your company and brand to represent.
At this stage, you need to focus on what is important to your company and how you want to be perceived by stakeholders. You should bear in mind the risks and opportunities identified by your step 1 analysis. The core values can appear to be different for different companies and industries. For some organisations, environmental issues are the most important element and for others, staff and working conditions are the key priority.
Having established your core values and decided on how you want to be perceived by stakeholders, it is time to prioritise the key focus areas, in a clear and concise way. At this stage you should pay attention to the areas you considered most important in step 1 and match them with your core values. We have developed an example of how to set up the measures in a template. Using this method, you will take into consideration the effects of measures, that is, finding out if they enable you to achieve the future vision you have set out for the company – while revealing how much effort is required.
Once you have selected your focus areas, establish the goals you will work towards in your sustainability programme. By setting goals, you can more easily achieve your future vision and desired brand image.
You should set up both short and long-term sustainability goals for the company that are SMART, that is, Specific, Measurable, Attainable, Realistic and Timely. By having clear goals, you can measure precisely what the company has achieved and see the effecs. To be able to implement them throughout the organisation, the goals must be attainable and realistic. Only define goals that the company is realistically capable of living up to. Unachieved goals may pose additional risks to relationships with stakeholder groups and may damage credibility and loyalty internally.
Create a policy and guidelines
Once you have created your core values, followed by outlining priorities and goals, you need to develop a policy with guidelines that describe how to achieve the goals and company vision. You should clearly outline which steps to take within all areas of sustainability, or your focus areas. At this stage, you can consult international standards and guidelines to get an idea of requirements and expectaions you need to fulfil. Whether or not you should use any of these will depend on stakeholder needs and requests, the behaviour of competitors, and specific circumstances within the industry. Your internal policies and guidelines will then form the basis for establishing your code of conduct in step 3. For many companies, the code of conduct is equivalent to the policy and guidelines in this step, Business Sweden has chosen to make the Code of Conduct a separate document to clarify that it is to be communicated externally.
Examples of useful tools, standards and guidelines
UN Global Compact – UN initiative containing ten general principles for responsible corporate governance. The principles are based on international conventions on human rights, labour law, the environment and anti-corruption. Companies and organisations can choose to join the initiative and then commit to the ten principles and to report their efforts to the Global Compact.
OECD Guidelines for Multinational Enterprises – Government recommendations to multinational companies that contain voluntary principles and standards for conducting business activities responsibly. The guidelines are consistent with applicable laws and internationally-recognised standards.
ISO 26 000 – a voluntary international standard for the adoption of social responsibility measures. The standard can be used in both the public and private sectors and addresses the environment, human rights, consumer issues, anti-corruption and business ethics.
ISO 14001 – a voluntary international standard for environmental management systems that assists companies in reducing their environmental impact.
ISO 37001 – a voluntary international standard for management systems to counter bribery
SDG Compass – a tool that helps companies with strategic work contributing to the implementation of Agenda 2030.
WBCSD – World Business Council for Sustainable Development, offers tools and methodologies for working more sustainably.
Food, Textiles, Toys, Jewellery, IT and Telecom, Pharmaceuticals, Raw materials
You can also recieve information from handbooks and tools in each respective section: human rights, working conditions, anti-corruption and the environment.
Map out your sustainability programme
Once you have produced a policy and guidelines, you will need to develop a clear structure and plan for how to carry out your sustainability work in Steps 4-6, i.e. implementation, evaluation and adjustments, along with reporting. Several of the international tools mentioned above provide guidance on how you can or should work with sustainability.
Your company should have a clear structure and methodology for:
How sustainability measures are to be implemented and controlled both internally and externally
More information and recommendations in step 4.
How the company will evaluate and respond if inconsistencies are found
Develop a plan for how to evaluate your performance after a certain period of time. At the same time, you should develop a plan of action – steps for how the company intends to respond if business practices are lacking or violations occur. Management should immediately know what to do if they receive information about internal or external inconsistencies. More details are found in step 5.
How the company will report and follow up on its sustainability work
Swedish companies of a certain size are, according to the Annual Accounts Act (ÅRL – Swedish) to report on sustainability. The audit industry organisation, FAR, has published a report concerning this new law. They will help you determine if your company is subject to the new law and how the report should be formulated. More information can be found in step 6.