Many companies claim they are operating in a sustainable way but verifying whether this is true can be difficult. There are many different definitions and opinions regarding what acting sustainably really means, and this makes it challenging to assess whether businesses are in fact operating in a way that is economically, socially and environmentally responsible.
Despite multiple efforts to turn sustainability assessments into accurate and universal tools, there is today no internationally accepted framework that integrates the whole sustainability principles and can be used when analysing business operations.
The SMART Sustainability Assessment Guide provides a solution to these problems and contains a science-based framework for analysing the extent to which companies are operating sustainably.
The Sustainable Markets for Responsible Trade (SMART) project has produced this guide in order to support the EU and the global community in their work to tackle some of the most urgent problems facing the world today.
The guide is based on knowledge developed as part of the project, and you can read a first version of the guide here.
The SMART project, which is funded by the EU’s research and innovation programme Horizon 2020, runs until the end of February 2020. The guide, which was first published on 31 May 2019, will until the end of the project be further developed and improved.
Researchers from 25 institutions across the world are involved in the SMART project, and together they are studying the barriers and drivers for market actors’ contribution to the achieving the UN Sustainable Development Goals within the planetary boundaries.
The guide is applicable to any kind of organisation regardless of its size, structure, business area and location, and it is intended to be used to analyse the sustainable management of an organisation within their supply chains under a life-cycle perspective.
It describes in detail how companies should analyse the sustainability of their operations by tracing the sustainability footprint back and forward, all along the value chain.
An organisation that wants to ensure that its business operations are sustainable, should, as a first step, make sustainability a priority of its board and upper management.
It should integrate sustainability into the organisation’s culture, mission, vision and values, and plan a strategy for how to become more sustainable. It should do this to demonstrate that it is strongly committed to creating sustainable value, meaning not just economic, but also social and environmental value.
It should then position the organisation within its supply chains and identify all its most critical points, and all its suppliers.
It is important that the organisation also investigates its impacts along its supply chain, because a good or service produced by an organisation with inputs from other organisations that are not operating in a sustainable way, cannot be considered sustainably produced.
In order to analyse whether an organisation is operating sustainably, one must also look at the operations of other firms further up or down the value chain. This should be done using environmental, social and economic footprints. Footprint outputs should be included in a hotspot analysis, where critical points are identified.
By doing so, the organisation will know which aspects of its operations it needs to keep a close eye on, and where it should introduce corrective measures to reduce its negative impacts.
Tracking products throughout their supply chains
Increasing globalisation has meant that many products today travel across multiple borders before they end up in someone’s home, and that they contain parts that are sourced from several different places and countries.
For many products, this has made it increasingly difficult to trace every single step throughout the value chain.
However, in order to ensure that the whole value chain of a product is sustainable, it is important that organisations ensure that it is possible to track a product or a component’s path all the way from raw material to finished good.
Communication is key
This guide also describes why it is important that organisations communicate to their internal and external stakeholders the environmental, social and economic impacts of their operations, and their goals for improvement.
Organisations should ensure its stakeholders that they and their suppliers are operating sustainably. To do this, they need to communicate to them their environmental, social and management performance, and here they can, in order to increase their credibility, rely on external auditing.
They should also communicate to their stakeholders their goals to manage change. Organisations should aim for continuous improvement, meaning that they should work towards improving their sustainability practices, processes and performance over time.
To do this, they should integrate the results and proposals for improvement of previous sustainability assessments into their sustainability strategy.
Openness is vital
It is important that organizations are open about their sustainability performance because this can lower the risk of reputational damage in the event of disclosure of negative news about them, for example by external parties or current or former employees.
By disclosing information about their operations and their various impacts, the organisation shows that it is transparent, responsible, striving to improve and is not trying to hide details about any wrongdoing from the public. Disclosing the facts about the organisation’s operations and their impacts is thus good risk management.
By publishing information also about areas of its operations on which there is room for improvement, the organisation demonstrates leadership, openness and accountability. It also shows that it is committed to making a positive contribution to sustainable development, and this can, in turn, lead to better dialogue with its stakeholders.
All feedback welcome
We hope that the guide will contribute to making businesses and other organisations more aware of their environmental and social impacts, so that they will be able to change things for the better.
Any feedback that could help us improve the guide is highly welcome! Please send comments about it and suggestions for improvement to email@example.com.