Sophie Schlachter, Business and Sustainability Analyst, reveals how integrating sustainability strategies into traditional business planning enhances credibility, drives efficiency, and strengthens brand reputation.
Why all businesses need to start planning for sustainability
People are increasingly aware of the immense challenges that the global community is currently facing. Our natural environment is under a level of pressure it cannot sustain, with six of the nine recognised planetary boundaries now crossed. This reduces the ability of the earth to self-regulate, and risks the collapse of humanity’s fragile life-support system. Around the world, floods routinely wash away farmland, critical infrastructure, and entire villages; wildfires are decimating the world’s rainforest and bushland; and heat records are being broken at a terrifying pace.
In addition to the ecological crisis, social indicators are showing signs that we are going backwards in human health and well-being. Inequality has sharply increased since COVID-19, and billions of people still lack access to safe water, sanitation, and hygiene, and continue to rely on unsafe and polluting fuels for cooking.
This polycrisis makes it evident that the way we use and share our natural, social and financial resources (i.e. the way our economy is organised), is causing some pretty big problems. If we don’t do things differently, these crises will persist and most likely get worse.
The imperative to do things differently extends to all of the five key forces which shape our economy; policy, technology, finance, citizens and of course, business. In response to the polycrisis, policy is being reformed to incentivise sustainable behaviour and prevent damaging behaviour, technology is fervently advancing climate-mitigation and adaptation solutions, finance is being mobilised to enable the transition to net-zero, and civil society is increasingly aware of, and motivated by, issues of environmental and social justice.
Businesses can be seen as the nexus of the five key forces. They respond to and help deliver government policy objectives, commercialise new technologies, absorb and redistribute finance, and react to the needs and wants of civil society. As such, businesses have enormous potential to develop and deliver a more environmentally sustainable and socially equitable economic system. The reality is, we cannot do it without them.
Business at the centre: The ‘B’ in SBP
Of course, it can be difficult for businesses to change the way they operate! There are strategies, processes and assets which have been built with “business-as-usual” in mind, and pivoting in response to the necessary transition towards sustainability is complex. Good planning, therefore, is key.
Rather than a reactive and chaotic adjustment to the new demands of a sustainable business, Sustainable Business Planning (SBP) provides a tool to help facilitate an organised, strategic and impactful uptake of change, that maximises the benefits of transition for both the business and the planet.
For people and the planet, the key benefit of SBP is representation. The incorporation of sustainability-related data into existing planning models means that sustainability planning, monitoring and reporting can be surfaced alongside other mainstream business information. To quote Donella Meadows, lead author of the seminal 1972 report The Limits to Growth, “A decision maker can’t respond to information he or she doesn’t have.”
Businesses can’t do things differently if they don’t have the necessary information to respond to.
We know the benefits of a connected planning model framework for traditional business planning – real-time insights, single source of truth, scenario analysis, modelling of interrelated inputs, business-wide analysis – and we can leverage this same framework to ensure that sustainability initiatives are strategically accounted for, alongside day-to-day planning activities.
The benefits of Sustainable Business Planning
For businesses, there are three key benefits of implementing Sustainable Business Planning.
1. Risk and Regulation Preparedness
As an auditable and integrated tool, SBP ensures data is being collected, collated and utilised to both manage and report on climate-related and nature-related risk, effectively. SBP therefore lowers enterprise exposure to non-compliance risk for sustainability reporting, climate-litigation risk, and potential lack of investor confidence and should be seen as a foundational element in a company’s risk mitigation strategy. This benefit is particularly pertinent for large Australian companies, who face mandatory reporting as soon as January 2025.
2. Efficiency and Innovation
Efficiency is the low-hanging fruit of sustainability, and there are obvious cost benefits of doing more, with less. Developing SBP models allows you to identify points for improvement in areas like the energy, water, freight and material efficiency of your operations, as well as that of your supply chain partners.
Similarly, imagining how businesses can do things differently requires creativity and leadership. When underpinned by a rigorous data foundation, SBP models support companies to seize new opportunities presented by the transition to a sustainable economy, including new products and services, new business models and new customers.
3. Customers and Talent
The community is increasingly motivated by their understanding and awareness of climate change, and social inequality. Their willingness-to-pay for sustainably produced or sourced goods remains strong, despite cost-of-living pressures, and companies that are able to provide sustainable products will benefit from increased brand integrity and customer support.
The same applies to talent acquisition, with many workers now expecting that businesses act as a force for good in society and being prepared to leave if a company’s values do not align with their own.
How Sustainable Businessworks in practice works in practice
Sustainable Business Planning integrates environmental and social modelling with traditional business planning processes, such as Sales & Operations Planning (S&OP) and Financial Planning & Analysis (FP&A).
Using the established principles and structures of a connected planning framework, SBP expands the scope to sustainability-related data and analysis. The resulting connectivity of traditional business planning with sustainability-related planning delivers the insights required for organisations to achieve their sustainability targets, while simultaneously developing the resilience, efficiency and innovative capacity of the business. Engaging with environmental and social matters using SBP is a highly effective way for an organisation to prepare for, and thrive in, the transition to a more sustainable economy.
The goal of SBP is to develop a planning system that supports ambitious environmental and social initiatives, that are fully integrated into the wider business strategy.
For example, the below image demonstrates how traditional planning use cases for a manufacturing business might be extended into environmental modelling, using the core S&OP planning models as a foundation.
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In this example, an organisation conducting their normal monthly demand and supply planning activities decide to extend their modelling to incorporate New Product Development, building a planning model for the introduction and ramp-up of the new product, and integrating this into their existing demand and supply projections. They’re aware of an increased desire amongst their customer base for a more environmentally friendly version of a current product and include data on the life cycle impacts of the new product in their environmentally extended Bill of Materials. This allows them to confidently communicate the benefits of the product to their customers, and report transparently to their shareholders about how they’ve reduced their company’s ecological footprint.
Six months later, the company utilises the forecasted demand for the successful new product to conduct scenario analysis on how to increase the circularity of the product, in a Circular Operations plan. They can identify the rate of use, based on actual sales, and estimate the benefits of including recycled material in the product, or even designing a ‘product-as-a-service’ offering, which would improve the environmental sustainability of the product even more.
The finance team are excited with the positive impact on profit of this new offering, with the demand forecast model showing an increase in revenue from the new premium offering and the Circular Operations model showing a reduction in costs through more efficient use and reuse of materials. Everyone wins – especially the planet.
Be the change: How to help your organisation get started with Sustainable Business Planning
As a first step, try to identify the kinds of sustainability-related information your company already reports on. This might be your carbon emissions footprint, or the gender equality metrics of your team. You could also try to identify potential efficiency improvements in production and expenditure – the ‘win-win’ opportunities – and discuss with the operations team what kind of data they’re already collecting in that area.
Sustainable Business Planning has the power to deliver fantastic outcomes for your company, and more importantly, for the people and planet around us.
While we acknowledge that there are challenges that you will need to anticipate, we believe that by being prepared to face them – and with the support of our expert team at Zooss – you and your organisation can be successful in your endeavours, and help to shape a more sustainable future.
Better Planning. Better Planet.
Read more: Getting started in Sustainable Business Planning: Part 2 – Scoping SBP for your organisation
To start your sustainable planning journey, contact us.
About the author – Sophie Schlachter
Sophie is a Business and Sustainability Analyst at Zooss Consulting. She holds a Masters of Sustainability from the University of Sydney, and has previously worked in regenerative agriculture and waste management, most notably for OzHarvest and the Taronga Zoo Conservation Society. She has completed Life Cycle Assessment software training (SimaPro) and is a certified Anaplan Model Builder.
About Zooss – Passion, Purpose, Skills
Zooss Consulting is passionate about pioneering Sustainable Business Planning. We are a team compelled by curiosity, constantly seeking new ideas and fresh perspectives on the best-practise and innovative use-cases for SBP. By embedding environmental and social sustainability into traditional business planning, we aspire to lead our partners into a more inclusive, equitable and regenerative future.
We are a purpose-led organisation and have donated 50% of our company to the Onyx Foundation. Onyx is a not-for-profit organisation providing long-term funding to biodiversity conservation and regeneration projects around Australia. Ultimately, Zooss’ purpose is to protect our natural world for the next generation, both through Onyx and through the positive impact of our client’s SBP models.
Better Planning. Better Planet.