Crafting a winning sustainability strategy: Key steps for success

Donald Trump may believe climate change is a “hoax”, but the majority of the world is still taking the threat seriously with net zero targets installed by most governments. 

The US President has pulled the biggest economy in the world out of the United Nations Paris Agreement for a second time and encouraged oil companies to “drill baby, drill”. 

Yet the Net Zero Tracker, run by a host of organisations including the University of Oxford’s Net Zero team, found in 2025 that 137 out of 198 governments had net zero targets, with 67 per cent of them enshrined in law. 

And it also recorded 63 per cent of the Forbes Global 2000 firms having net zero targets, with company commitments growing by nine per cent in the US. 

Thus, despite Trump, more and more companies and organisations are keen to do their bit in the battle to prevent catastrophic climate change.  

But many are finding it is far more complex than they imagined and needs the implementation of a sustainability strategy that covers their whole value chain. 

Understanding sustainability strategies 

But what exactly is a sustainability strategy? I define it as one that recognises the criticality of planetary environmental issues and challenges for the importance of running a successful business.  

Indeed, the importance of companies having a sustainability strategy is both moral and material for stakeholders such as customers, suppliers, regulators and governments.  

Business sustainability strategies also matter for investors as they have an inherent interest in how the company performs in the short and long term and therefore what impact these environmental issues will have. 

Environmental issues affect costs, revenues, licences to operate and access to capital - therefore they belong in strategy. 

Sustainability risk management 

One of the core reasons why businesses are concerned about the environment or sustainability is because of the increasing risks if they ignore it. 

For a start, there are the physical risks, such as droughts, wildfires, or storms. Alongside them are the long-term rises in temperatures and seawater levels, which bring a host of dangers and problems.  

But there are also the regulatory risks of new laws and rules that may result in companies having to pay fines and penalties if they don’t address their sustainability responsibilities. 

Lastly, there are the reputational risks of customer perceptions over whether your company is causing the climate catastrophe or is attempting to be part of the solution. Has your company done anything about it? Could customers start to boycott your products if your business does not participate in the fight against climate change?

The whole purpose of a sustainability strategy is to reflect on all those risks and identify what you have to do to mitigate against them. 

Indeed, mitigating sustainability risks is the purpose of the strategy. This means some preparation and adaptation is needed to strengthen buildings and infrastructure. For instance, energy companies have raised their electricity pylons to reduce the risk of flooding as extreme weather events become more frequent due to the warming climate. 

Companies need to involve themselves in the shaping of regulations, so governments are mindful of the context before imposing laws. Company bosses don’t want new regulations to come as a complete and expensive shock either. 

Consumers also have strong views and easy access to social media to publicly point out any organisations that are not helping to protect the environment. Public perception and the reputation of the company in this sphere needs to be clearly and consistently communicated without drifting into ‘greenwashing’. 

Sustainable supply chain management 

Companies themselves have an impact on the environment, but in many industries that goes well beyond their own operations and stretches into their supply chain. 

So, managing sustainability from a business perspective really requires leaders to think carefully about the sourcing of raw materials, parts and components, and the impact of the entirety of the value chain from suppliers right up to customers disposing of the product.  

Does your product end up in landfill sites? Or are there ways to bring your products back into the business or into the industry through some form of circular economy approach? 

The key principle is to analyse the value chain to understand where exactly the issues and risks occur. Then to define and develop processes, procurement rules, and policies to help address them effectively. 

The benefit of implementing sustainable supply chains is not only for the future of the planet but also the future of any business.  

Building a sustainable supply chain boosts resilience to shocks, such as weather-related disruptions or commodity price spikes. It also protects a company’s ‘licence to operate’ as customers will want to know the provenance of raw materials, parts and components. 

It will also unlock innovation. Companies that work with their suppliers on sustainability end up identifying opportunities for product diversification, process improvements, and more efficiencies, both from a cost aspect and an environmental perspective.

Incorporating renewable energy strategies 

Moving to renewable energy is clearly one of the critical first steps to take in moving towards net zero for most firms, with increasing numbers of firms looking to install solar PV panels on the rooftops of their facilities.  

The same can be applied to suppliers, where firms can encourage or incentivise them to install solar panels, while some organisations are doing this more indirectly by buying renewable energy.  

Technology firms are doing their bit by entering into Power Purchase Agreements (PPAs) with renewable energy firms, which helps them scale their business and lock them into a predictable price over 10 to 15 years – something increasingly valuable in today’s unstable geopolitical environment. 

And as well as manufacturers erecting vast solar panel arrays, breweries are converting their residue grains into biogas through an anaerobic digester for onsite energy. 

Social responsibility in business 

The focus on the environment is important for any sustainability strategy, but it also aligns with - and provides an opportunity - to integrate social responsibility into business models. 

Companies can build a coherent and integrated approach, where looking after the local community, employees, and the welfare of their suppliers go hand-in-hand. 

They may be concerned with different issues, but ultimately, they are part of the same broader responsibility - to ensure that businesses operate responsibly. This can be done by embedding expectations in contracts, supplier development and workforce planning.  

Measuring social impact and success or otherwise is crucial. Decide which outcomes matter, such as worker wellbeing, supplier labour standards, community benefits, and track them alongside environmental metrics.  

Measuring the efforts that firms are making and the impact that they are having on both the environment and on people, is vital to bring stakeholders along with the journey and to have some idea of what is working and what isn’t.  

Key steps for implementing your strategy 

It is important for leadership teams to start with purpose: what is our long-term goal? Then look at how environmental and social issues fit into that. 

With that clarity, select the issues material to the organisation, whether that is biodiversity, water, plastics or waste, and set timebound clear goals and objectives for each one.  

Then translate those goals into delivery roadmaps, allocate budgets and owners, and sequence key milestones. 

But keep those targets aligned with your capability and capital; and update the roadmaps as conditions change.   

Monitoring and reporting progress avoids accusations of greenwashing, so report clearly, consistently and transparently in numbers and narratives.  

Different audiences prefer different formats. Institutional investors want comparable data, while customers and employees often respond to concise stories of projects. 

Meanwhile, use dashboards for internal accountability, and highlight case studies of success externally to show your momentum without overstating any claims. 

A sustainability strategy is not a glossy annex to sit on a company website; it needs to be part of the overall business strategy 

Despite what Trump says, climate change is not going away, and many companies will be directly or indirectly affected. Not having a sustainability strategy will cost firms money in the future and is costing them now as investors penalise that lack of planning. 

The better, more successful companies actively look out for the commercial opportunities in this space. They don’t treat sustainability as a risk management exercise, but as a strategic driver of growth. 

Electronics firms Schneider and Mitsubishi Electric have become leaders in making products to support businesses in their sustainability transition, while Heineken is actively managing water supplies as it is a huge issue for the beermaker, and pharma giant AstraZeneca is researching the future health issues and medicines that climate change will bring. 

There is a growing recognition that doing business well means having a sustainability strategy. This may be new territory for many managers, especially in small and medium-sized firms, but it is something that can no longer be ignored – the time is now for sustainability to be at the top of every firm’s agenda. 

Further reading:

How can small businesses achieve net zero?

Strategy as science: Embracing an experimental approach

How multinationals can avoid supply chain scandals

'The transition is already happening': Lessons from COP30

Frederik Dahlmann is Associate Professor of Strategy and Sustainability and teaches Business & Sustainability on the Executive MBA, Executive MBA (London), the Global Online MBA, the Global Online MBA (London) and the Part-time MBA (London Accelerator).

Develop the ability to deliver a sustainability strategy with the three-day Executive Education WBS Sustainability Leadership programme at WBS London at The Shard.

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