New EU rules underline what we know: sustainability is and will be a prerequisite for doing business in the future. So use the strategy to let it seep into your company's DNA.

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Once upon a time. That's how many adventures begin, and most end well. Before that, however, the protagonist often has to go through a lot of hardship.

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That's how I think many business leaders feel when we tell the story of Denmark's green transition. About how the black oil crisis became green wealth.

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Because now that the transition is really taking off, sustainability is also starting to cause trouble. Sustainability reporting, environmental standards, documentation requirements and taxes galore.

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Soon the heretical thought creeps in: does climate change and Amazon wildlife really depend on whether my small business sorts waste into five piles?

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I don't want to conclude on that.

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ALSO READ: Remember the strategy when the crisis hits

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On the other hand, I dare say that the company's own future depends very much on its ability to see sustainability as a condition of existence. And by that I don't just mean green requirements, but also requirements for equality, education, human rights, social responsibility and much more.

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The demands are only increasing. So all companies - regardless of size - might as well incorporate them into their strategy.

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New EU requirements on the way

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One of the latest examples of this development is the EU's CSR Directive (CSRD), which will cover large listed companies in financial year 2024 - and companies in accounting class C in financial year 2025.

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According to PWC, the directive proposes to increase the requirements for companies to report on their environmental, human rights and corporate governance impacts. And the number of sustainability standards to be reported against also looks set to increase from 12 to 84 (!).

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To turn a blind eye to these developments is therefore like peeing in your pants to keep warm on a melting ice sheet.

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ALSO READ: SDGs: Bullshit bingo or building blocks?

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Let sustainability seep into the strategy

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If you think that sounds unmanageable, don't worry. In my experience, a lot of companies are in fact delivering on a lot of sustainability agendas. They just don't have the overview and don't have it documented.

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Why write them into a strategy when we do it anyway?

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Partly because documentation requirements are increasing, partly because incorporating sustainability into strategy often makes it visible that sustainability efforts can be used much more actively - in everything from recruitment to sales.

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Often, there is a real "aha" moment when business leaders discover, for example, how many SDG initiatives they are indirectly helping to address.

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This could be the paper mill switching to a more environmentally friendly material, or the consultancy company contributing knowledge on everything from gender equality to technical solutions for cleaner production.

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And often I have seen how it inspires to go the extra mile under the motto: "If we're going to contribute all this anyway, why not go all the way and...".

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In this way, the company's own adventure can go from being a hopeful story to a powerful asset.

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This column was published on Jyllands-Posten's Finans and in Jyllands-Posten, Erhverv on 16 January 2023.

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