The new Sustainability Act (CVIII of 2023) requires most large domestic companies to prepare not only a sustainability report but also a sustainability strategy. A good sustainability strategy is an integral part of the company’s business strategy, it supports the objectives set out in the strategy, it is known to the employees and it is a “guide” to the annual objectives. Below we have summarised some useful tips for preparing a sustainability strategy.

How to successfully implement your ESG strategy?

1. Seek input from internal and external stakeholders. Consult with board members and company executives on ESG issues that are important to the business, and talk to other stakeholders – employees, institutional investors, customers, suppliers, community leaders – about the issues that are important to them.
2. Assess the different ESG issues in terms of their materiality. Using the information gathered, identify the issues that are most important to both the business itself and to stakeholders, as well as those issues that are less important to either or both. Each element of the ESG strategy can then be prioritised based on this assessment.
3. Establish ESG performance baselines. Document current performance levels, policies, practices and statistics on ESG factors that will be addressed as part of the strategy. This will provide a starting point for future comparisons when evaluating the progress of ESG efforts.
4. Define measurable targets and action plans for ESG initiatives. This includes setting targets and performance objectives for the ESG strategy as a whole and also for its different components. Some of these targets may include desired improvements to KPIs, while others may require maintaining current performance levels and practices that are already compliant. When setting targets, it is worth identifying links with the UN’s Sustainable Development Goals.
5. Based on the targets, develop an action plan with the involvement of the organisation. Then prepare a detailed implementation plan for the ESG programme with a project timeline, milestones and responsibilities.
6. Select the reporting standards and frameworks to be used. There are a number of ESG reporting options available to companies, and it depends on the industry which framework is should be used. In general, for “newcomers” the GRI Standards are the most widely used, but in most cases within Europe the recently adopted CSRD/ESRS standard is recommended.
7. ESG data collection, analysis and reporting. Once the ESG programme is operational, processes are needed to collect and analyse data on relevant KPIs and then to prepare reports for the stakeholders. Full reports are generally produced and published annually, but it is recommended that the board and senior management are informed more frequently, especially in the early stages, in order to increase internal commitment.
8. Review and modify the strategy as necessary. ESG requirements may change as business needs, stakeholder concerns and regulatory mandates evolve. The ESG strategy should be regularly reassessed to ensure it remains effective, and any updates needed should be identified, including weaknesses to be optimised.
9. Incorporate ESG policies, best practices and ideas: e.g. reducing greenhouse gas emissions, creating more responsible and more sustainable supply chains, implementing measures for climate change adaptation, introducing a circular economy model, reusing product components and materials instead of throwing discarding or recycling them.