Sustainability management in companies opens corporate doors

Introduction to sustainability management: what does it mean?

Sustainability management is the systematic development, integration and monitoring of sustainability targets in the company strategy. Thereby, companies ensure compliance with international sustainability standards throughout their entire supply chain. These standards were defined by the United Nations in 2015 as part of their “2030 Agenda”. They formulated “17 Sustainable Development Goals“ (SDGs) for a global sustainable development. At the core are environmental protection and occupational safety as well as human and workers’ rights. The SAQ 4.0 for sustainability management in the automotive industry are also based on the SDGs. Moreover, the German Supply Chain Act is derived from the SDGs. Both have an indirect impact on the SME sector.

What is the principle of sustainability?

Indigenous peoples have been applying the principle of sustainability for thousands of years: “Take from nature only as much as can grow back”. At the end of the 18th century, the sustainability principle was introduced in forestry. “Cut only as much wood as will grow back through reforestation.” In the face of limited resources and man-made climate change, the principle of sustainability has gained acceptance in modern societies.

What are the Sustainable Development Goals of the 2030 Agenda?

The Sustainable Development Goals have emerged since 2000 at the United Nations (UN) climate conferences. In 2015, the UN General Assembly adopted 17 Sustainable Development Goals (SDGs) with 169 targets. For companies, the SDGs with social and environmental goals are relevant. These include environmental protection and respect for human and labour rights.

A sustainable company …

• protects the environment

• uses raw materials responsibly

• actively prevents damage to nature resources such as water, soil, air and energy

• avoids waste and waste of raw materials

• uses recycleable materials (circular economy)

• creates humane working conditions

• takes care of the health of their employees

• ensures occupational safety

   

• establishes high ethical standards in management

   

• fights corruption.

An environmental and sustainability management identifies the risks of whether and how a company could jeopardise these goals through its production and behaviour. Sustainability management for managers is particularly important in this context because the managers have to enforce the achievement of the targets.

You would like to know more about sustainability management? Arrange a free initial consultation with Memex Consulting GmbH now.

When is a company sustainable?

The short answer is: when you and your company have successfully implemented a Sustainability Management System and use this consequently. Additionally, you have to issue guidelines on the areas:

• Environmental and climate protection

   

• Energy management and conservation of resources

   

• Occupational safety and health protection

   

• Workers’ rights and fair payment

   

• Corporate ethics and fighting corruption

   

• Human rights and prevention of child labour

The idea of corporate sustainability is based on the principles of the 2030 Agenda and the principles of Corporate Social Responsibility (CSR). CSR stands for responsible acting in the market. CSR minimises ecological risks. CSR ensures that employees are treated well.

You can read more about Corporate Social Responsibility here.

Who is responsible for sustainability in a company?

The management is basically responsible for sustainability management in companies and appoints a sustainability manager for the development. For the realisation of the SDGs in the company, he identifies targets and tasks for all areas and departments. The sustainability manager monitors whether the targets are being met. As soon as a risk arises he can react quickly and minimise it.

Read more about a sustainability manager here.

How does a sustainability manager work?

For the introduction and implementation, the sustainability manager establishes a Sustainability Management System. A Sustainability Management System is process-oriented and a continuous as well as repetitive process. Along the technical development the sustainability manager thus ensures that emerging risks are also identified immediately. A Sustainability Management System describes for example the DIN ISO 26000. It leads to a holistic view of good corporate governance. It supports companies to find a balance between economy, ecology and social aspects. Additionally, companies should introduce management systems i.e. for environment and energy management (ISO 14001), data protection (ISO 27001) as well as work safety (ISO 45001) and get them certified.

 Read more about a Sustainability Management System here.

Why is sustainability in companies important?

Sustainability reduces risks that can occur by a breach of the Sustainability Development Goals. Environmental damage can quickly cost several million euros. Poor treatment of employees damages the reputation. Equally, poor quality and unsustainable products lead to loss of sales. A company that aligns its business model with the Sustainability Development Goals minimised risks. Furthermore, customers, potential clients as well as specialists and managers expect more and more a clear commitment to sustainability. The automotive industry for example requires suppliers to document and prove their environmental, energy and sustainability management.

Sustainability management according to the requirements of the automotive industry

European car manufacturers and more and more corporations are demanding proof of their sustainable corporate governance from their suppliers. This is because the corporations themselves have to comply with international standards since the introduction of the Supply Chain Act. According to national and international regulations, corporations must also accept responsibility for misconduct on the part of their suppliers. That is why they also oblige their suppliers to do so. For this purpose, the European automotive industry has introduced SAQ 4.0. The abbreviation stands for Self-Assessment Questionnaire. It is a self-declaration which suppliers use to prove that they operate sustainably and meet international standards. Medium-sized companies can document how they meet these standards with a certified Sustainability Management System and the documents created for it. This makes it easier for them in tenders and bids because they are prepared and can go through the SAQ 4.0 process quickly. In addition, their chances of being listed as suppliers and receiving regular orders increase. Hence, with a well-established sustainability management their competitiveness increases. That is why a successfully completed SAQ 4.0 process is the door opener to corporations for SMEs.

Read more about the SAQ 5.0 here.

What certifications are there in sustainability management?

You can apply to independent testing organisations for a certification for the implementation of ISO standards. Many technical inspection associations offer certification for the ISO standards 14001, 27001 and 45001. ISO 26001 was last updated in 2021 and focuses on Corporate Social Responsibility (CSR). These certificates are helpful but not mandatory for SAQ 4.0 certification. The SAQ in version 4.0 is a questionnaire with which suppliers and those who want to become suppliers submit a sustainability management declaration. They have to attach documents that prove their company policy in order to receive the verification. This can be guidelines and handling instructions, certifications of management systems, trainings of staff as well as key figures for measuring the environmental impact of the company’s activities. In the automotive industry the NQC Ltd. audits the SAQ self-disclosure of new suppliers. These are to be submitted via the NQC Portal Supplier Assurance portal. The actual certification, i.e. the approval of a company as a supplier, is carried out by the respective companies themselves.

Read more about the SAQ 4.0 certification here.

Would you like to know more about SAQ 5.0 certification? Arrange a free initial consultation with Memex Consulting GmbH now.