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BCG presents the six steps of sustainable transformation

Sustainability, a company’s ability to create positive environmental and societal impact, is rapidly reshaping competitive advantage. The scale of the disruption that will play out over the next few decades, along with the opportunity it creates, will be staggering.

But while the opportunity is clear, the way to drive a successful sustainability transformation is less obvious. To succeed and create a competitive advantage, companies must simultaneously integrate an environmental, social, and governance (ESG) lens into every element of the business and capture the value that this transformation creates.

BCG has identified six actions that distinguish leaders from the rest of the pack.

First of all, aspiring sustainability champions must develop a sustainability strategy anchored in purpose. The strategy must connect to the company’s purpose, focus on long-term value creation, and be driven from the top.

Capturing business value is equally important as companies that lead in sustainability, as reflected in ESG performance, can also outperform their rivals financially.

BCG highlights that companies have a major opportunity to unlock new sources of growth, particularly in relation to the trillions of dollars that the public and private sectors will be investing every year to drive the global economy to net-zero carbon emissions. Therefore building new sustainable businesses has a huge potential.

Companies that aim to become sustainability leaders must also assess and enhance the sustainability of their existing portfolio and operations. The study underlines that new tools and technologies are critical in making the core more sustainable, for instance in supply chains companies have an opportunity to create end-to-end transparency, from sourcing through distribution.

Companies that want to drive a sustainability transformation must ensure they have the right capabilities and foundation in place to succeed. At the same time, they will also need to continue to adapt their operations, product portfolio, and business models as the bar for sustainability inevitably rises over time.

Finally, leading companies must create a compelling and distinctive narrative around their sustainability strategy—one that connects and amplifies their purpose.

According to BCG, companies that fail to take up the challenge, and instead continue to view sustainability through a compliance or ESG reporting lens, will miss the opportunity to tap into lucrative new markets and create new, winning business models.

On the other hand, companies that execute effectively in all six areas will truly transform their business and turn sustainability into a competitive advantage.

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