How to start a business sustainability strategy

Sustainability strategy has become central to how businesses operate. Companies are under increasing pressure to address climate risk and improve transparency to prove they’re making a real difference. 

A clear sustainability strategy helps businesses integrate environmental and social goals into daily operations. Still, many struggle to track ESG outcomes or meet evolving disclosure standards.

According to IBM, 76 per cent of executives say sustainability is central to their business strategy, and 75 per cent believe it leads to better business results. This growing alignment between ESG goals and business performance underscores the need for measurable, credible action.

Here are some ways businesses can build a strong sustainability strategy.

Table of contents: 

• Benefits of a sustainability strategy
• Integrating sustainability into business strategy
• Key components of a sustainability strategy
• Steps to create a sustainability strategy
• Sustainability strategy examples from leading companies

Benefits of a sustainability strategy

A well-executed business sustainability strategy delivers value across environmental, social, and economic dimensions. The benefits go beyond regulatory compliance, helping businesses strengthen resilience and build long-term trust. 

It also shows why sustainability is important for business, creating opportunities for growth and improvement.

• Reduced environmental impact: A strategy helps businesses manage their footprint and support broader climate goals. According to Deloitte, 69 per cent of employees want their companies to take action on carbon reduction and renewable energy.
• Improved social well-being: Sustainability initiatives often support communities through ethical labour practices and inclusive stakeholder engagement. These actions contribute to stronger relationships and broader societal progress.
• Enhanced economic performance: Lower operating costs and stronger long-term planning can help improve profitability. Companies that lead in ESG performance are also more likely to attract investment and maintain a competitive advantage.
• Risk mitigation: A proactive approach helps organisations anticipate and respond to environmental, legal, and supply chain risks. This is especially important as regulations tighten and climate-related disruptions become more frequent.
• Reputation and brand value: Consumers increasingly favour companies that prioritise sustainability. A PwC global survey shows 80 per cent are willing to pay more for sustainably produced or sourced goods, reinforcing the value of credible sustainability commitments.
• Innovation and growth: Sustainability can open the door to new products, markets, and business models. From sustainable forestry to circular packaging systems, companies that invest in innovation often uncover new ways to grow responsibly.

Integrating sustainability into business strategy

Linking sustainability to fundamental business objectives, like enhancing brand value or improving operational efficiency, transforms it into a strategic advantage.

This integration directly improves ROI and resilience. For example, optimizing resource use through sustainable practices can lead to significant cost savings and operational efficiencies.

Investors are also keenly aware of this link. For every 10 per cent increase in emphasis on material ESG concerns, a company’s value goes up by 1.4 per cent. This alignment helps shift sustainability from a perceived cost centre to a clear driver of financial returns and long-term business viability.

Key components of a sustainability strategy

Every effective sustainability management strategy starts with a strong foundation. 

It requires structured planning, cross-functional alignment, and measurable results. In fact, research shows that companies with higher ESG ratings have a 10–20 per cent valuation uplift compared to peers.

The components below serve as the core ingredients, each one helping businesses move from intention to measurable impact and putting sustainable business in action.

• Defining the scope: Clarify which areas of your business the strategy will cover, such as operations, supply chains, or product lifecycles. This should include addressing Scope 1, 2, and 3 greenhouse gas emissions to ensure efforts are focused and fully accountable.
• Setting clear targets: Establish specific, measurable sustainability goals tied to environmental and social outcomes. Targets should align with global frameworks and be backed by data where possible.
• Developing action plans: Lay out practical steps to achieve each target. Action plans should include timelines and the resources needed to stay on track.
• Measuring and reporting progress: Track performance using consistent, credible metrics. Transparent reporting helps build trust, meet stakeholder or regulatory expectations, and guard against greenwashing.
• Integrating sustainability into operations: Embed sustainability into everyday decision-making, from procurement and logistics to employee training and investment planning.
• Engaging stakeholders: Collaborate with employees, suppliers, customers, and communities to align efforts and strengthen accountability across the value chain.
• Continuous improvement: Sustainability in business is not static. Regularly reassess and refine your strategy to respond to new data, regulations, and stakeholder feedback.

Building on these components with credible data can help businesses avoid common ESG reporting gaps.

Steps to create a sustainability strategy

Once the core components are in place, the next step is to implement them. The process below offers a practical roadmap for building a strategy that’s ready to deliver measurable results.

1. Conduct a materiality assessment

A materiality assessment helps businesses identify which sustainability issues are most relevant to their operations and stakeholders. This process makes sure your strategy focuses on the ESG topics that carry the greatest risk, opportunity, or impact.

Many reporting frameworks, including the Corporate Sustainability Reporting Directive (CSRD), now require a double materiality approach. This considers how a company affects the world and how sustainability for business issues affects the company.

To conduct a materiality assessment:

• Map your ESG landscape by reviewing internal policies, industry benchmarks, and reporting standards.
• Engage stakeholders through surveys, interviews, or workshops to understand which issues they prioritise. Early collaboration across sustainability, finance, and operations teams ensures alignment.
• Quantify environmental impacts by collecting and analysing data to assess the scale and significance of nature-related risks and opportunities.
• Score and prioritise topics based on relevance, risk, and potential business impact. Involve finance teams to support quantitative analysis and establish materiality thresholds.
• Create a materiality matrix to visualise and communicate your top issues clearly.

Completing this step early helps ensure your strategy is aligned with regulatory expectations and focused on what matters most to your business and stakeholders.

2. Align with business objectives

Corporate sustainability strategy works best when it’s connected to a company's core operations. Instead of treating it as a standalone initiative, link sustainability goals to priorities like reducing risk, entering new markets, or strengthening brand value.

Pressure can also build internally from stakeholders, as more than 80 per cent of investors consider ESG factors in their decisions, and over half believe better ESG practices lead to stronger financial returns.

This alignment helps shift business sustainability from a cost centre to a strategic advantage. Initiatives that support both environmental outcomes and business performance are more likely to be adopted and maintained across the organisation.

3. Benchmark against industry standards

Understanding how your efforts compare with industry norms strengthens the credibility of your strategy. Benchmarking helps identify gaps, set realistic goals, and align with global expectations.

Industry-specific standards and certifications help ensure your strategy reflects best practices in your sector. Reviewing the targets, achievements, and disclosures of peer companies also supports internal benchmarking and highlights areas for improvement.

Key reporting frameworks to guide your approach include:

• Global Reporting Initiative (GRI): Supports impact-focused and transparent reporting.
• Science Based Targets initiative (SBTi): Guides companies in setting climate-aligned emissions goals.
• Corporate Sustainability Reporting Directive (CSRD): Requires companies to disclose both their environmental impact and how environmental risks affect them.

Examining how others in your sector approach sustainability can help refine your strategy and keep it responsive to a changing business landscape.

4. Build cross-functional teams

Sustainability strategy requires input from across the organisation. From procurement and operations to marketing and finance, each function brings a different perspective. 

According to a PwC survey, most firms involve eight different business functions in their ESG or CSRD efforts, showing how widespread this collaboration needs to be.

Engaging teams early helps embed sustainability into day-to-day operations and encourages collective ownership. When departments are aligned early, sustainability becomes part of how the business operates.

5. Set short- and long-term goals

Strong sustainability strategies are anchored in clear, time-bound goals. 

Setting both short- and long-term targets helps businesses build momentum while staying accountable to broader climate and ESG commitments.

Forests, for example, offer critical long-term value – absorbing 7.6 billion metric tonnes of CO₂ annually. But to support that impact, companies must take near-term steps across their supply chains and reporting processes. Here’s how goal-setting might break down:

Short-term goals:

• Improve ESG data collection and reporting processes
• Conduct a forest footprint analysis
• Pilot low-impact materials or packaging
• Engage suppliers on traceability

Long-term goals:

• Reduce absolute emissions in line with science-based targets
• Source forest-based materials from certified, sustainably managed sources
• Support forest restoration or ecosystem services beyond the value chain
• Align with CSRD or other disclosure frameworks for long-term compliance
• Set targets across Scope 1, 2, and 3 emissions to align with climate science and regulatory frameworks

Clear goals help measure progress, guide investment, and signal commitment to stakeholders. They also make it easier to integrate sustainability into long-term business strategy and contribute to lasting solutions to climate change.

Sustainability strategy examples from leading companies

Across sectors, Forest Stewardship Council® (FSC)-certified companies are using verified data to strengthen their ESG reporting and meet long-term climate goals. 

These examples show how sustainability in a business strategy can drive measurable impact through certification, ecosystem services, and beyond-the-value-chain investment.

Hammerbacher (manufacturing):

• Hammerbacher, a German wood manufacturer, uses Verified Impact to bring greater transparency to its sustainability reporting and build trust with stakeholders. The company supports the UTGA forest project beyond its value chain, demonstrating a strong commitment to meaningful climate action.

Inproba (food and beverage):

• Inproba, a Dutch food company, uses Verified Impact to support its carbon reduction claims. The company invests in forest projects that benefit both communities and the environment, helping build trust with consumers who prioritise sustainability.

Del Fuerte (agriculture):

• Del Fuerte, a Mexican food producer, supports ecosystem restoration through Verified Impact by sponsoring watershed projects. These initiatives help improve local water systems near its operations and reflect a broader commitment to sustainable sourcing.

These case studies reflect how businesses are making sustainability part of their operating model, grounded in third-party data and real-world outcomes. Each example highlights practical ways to help the environment while supporting broader ESG goals.

Build your sustainability strategy with FSC

A strong sustainability strategy starts with clear goals. From reducing emissions to improving supply chain transparency, each step helps turn intention into a measurable impact.

FSC®'s Verified Impact makes it easier to take action and measure success. This tool helps businesses track real-world outcomes and showcase progress toward climate and ESG goals.

Explore how FSC can support your strategy with trusted data and forest-based solutions.

Additional resources 

Discover how businesses can embed ESG into their operations through guidance from the United Nations Development Programme. 

See how the World Resources Institute highlights the powerful role forests play in absorbing carbon and advancing global climate goals.

Sourcing

1. IBM Institute for Business Value (2024). Beyond checking the box. https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/sustainability-business-value (accessed 9 June 2025).
2. McKinsey & Company (2024) Enabling socially responsible sourcing throughout the supply chain. https://www.mckinsey.com/capabilities/operations/our-insights/enabling-socially-responsible-sourcing-throughout-the-supply-chain (accessed 9 June 2025).
3. United Nations Development Programme (2023). Building a sustainable future: ESG business handbook. https://www.undp.org/sites/g/files/zskgke326/files/2023-08/building_a_sustainable_future_esg_business_handbook.pdf (accessed 9 June 2025).
4. PwC (2024) Global CSRD Survey. https://www.pwc.com/gx/en/issues/esg/global-csrd-survey.html (accessed 9 June 2025).
5. World Resources Institute (2022). Forests absorb twice as much carbon as they emit each year. https://www.wri.org/insights/forests-absorb-twice-much-carbon-they-emit-each-year (accessed 9 June 2025).
6. Deloitte Insights (2023). Engaged employees are asking their leaders to take climate action. https://www2.deloitte.com/us/en/insights/environmental-social-governance/importance-of-sustainability-to-employees.html (accessed 9 June 2025).
7. PwC (2023) Voice of the Consumer Survey. https://www.pwc.com/gx/en/issues/c-suite-insights/voice-of-the-consumer-survey.html (accessed 9 June 2025).
8. Wharton, University of Pennsylvania (2022). How does ESG emphasis impact a company’s value? https://knowledge.wharton.upenn.edu/article/how-does-esg-emphasis-impact-a-companys-value/ (accessed 9 June 2025).