Embedding Sustainability: The Path to Long-Term Business Value

Integration of sustainability into business models

Sustainability initiatives need to be deeply embedded within the business. It’s about raising awareness, shifting mindsets, and encouraging every part of the organisation to consider sustainability in their daily operations. Katharina Stenholm, CSO at dsm-firmenich, echoes this perspective: “Sustainability isn’t optional; it’s essential for future relevance and business performance. The biggest challenge is overcoming the perception of sustainability as an added cost rather than an integral part of business strategy and innovation. Our vision centres on leveraging business as a force for good, ensuring our activities create meaningful and sustainable impacts for the communities and environments we operate in.”

Stenholm elaborates on how her company pursues this goal: “Our approach is to drive sustainability impacts directly through our business activities. These efforts are embedded in our business model, rather than being treated as peripheral corporate social responsibility activities that may be cut during economic downturns.” She emphasises the role of business leaders: “It’s not just about setting goals but also about having the authority and willingness to make significant decisions regarding operations, product lines, and investments that align with those goals.”

This sentiment is echoed by other leaders who see sustainability not only as essential but as closely tied to their organisation’s core business. Alice Steenland, Chief Strategy, Sustainability, and Marketing Officer at Signify, highlights how her company’s core business aligns naturally with sustainability goals. “Energy efficiency is at the heart of what we do. Essentially, we’re selling climate action by reducing energy consumption in buildings and outdoor spaces.” Steenland stresses the importance of sustainability in decision-making: “Around 70% of our clients are professionals seeking durable, energy-efficient products that last longer and consume less energy, aligning perfectly with their needs and our planet’s goals.”

While energy efficiency is a clear driver for sustainability at Signify, other organisations face the challenge of embedding sustainability more holistically into their operations and purpose. Robert Metzke, Senior Vice President and Global Head of Sustainability at Philips, explains: “We aim to stand out through innovation, design, and sustainability. It’s our responsibility to ensure these goals are pursued consistently throughout the organisation. A purpose statement like ‘improving human lives’ means little if your strategy focuses solely on maximising shareholder value – it creates cognitive dissonance among employees. We need a broader perspective on value creation. It starts with understanding how your company can add value for clients, both new and existing. Only then can you build a strategy to monetise it.”

Technological innovation as a driver for sustainability

Beyond integrating sustainability into the business model, leaders also recognise the transformative potential of technology as a key enabler of their goals. The leaders we interviewed leverage technology to improve healthcare outcomes, manage environmental impacts, and enhance operational efficiency. Technology is also indispensable for data management and analysis, enabling informed decision-making and strategic planning.

Stenholm observes: “We often discuss the ‘twin transformation’ – the convergence of sustainability and digital technology. Technological advancements offer new opportunities to rethink and redesign our processes and products sustainably. This alignment is crucial for accelerating our sustainability agenda. Understanding technological trends enables us to tackle sustainability challenges in innovative ways. We encourage our teams to bring transformative thinking to the table, helping us leapfrog traditional solutions and set new standards in sustainability.”

For Steenland, these technological trends are shaping the future of her industry. “For us, connected buildings are the next frontier. While smart buildings and cities have been evolving for decades, the EU is now embedding these ideas into legislation. This aims to create systems that adjust energy use in real time based on factors like temperature and lighting. The future will focus on connected lighting rather than further improvements in bulb technology alone.”

Metzke offers a balanced view, cautioning against over-reliance on technology: “Technology is critical, but it’s just one piece of the puzzle. True innovation in healthcare requires rethinking care protocols and processes to better meet patient needs. Technology is a tool to support this, but its value lies in how well it integrates into care protocols to improve patient outcomes and reduce costs. The real question is whether you can co-create solutions with your client. Technology is useless if it’s not applied effectively.”

Collaboration

Several of our interviewees emphasise the critical role of partnerships and co-creation with stakeholders, including technology companies, healthcare providers, and non-governmental organisations. These collaborations help develop innovations that meet real-world needs, even if their benefits are not always easy to quantify financially.

Steenland highlights an example of such collaboration in healthcare: “Some of those clients are interested in how lighting impacts well-being, like aiding sleep and recovery. Putting a dollar value on these benefits is challenging, but we do partner with clients who appreciate these non-financial returns.”

Working for technology partner Philips, Metzke reinforces this point: “We collaborate with hospitals to develop healthcare systems that are not only environmentally friendly but also economically and socially sustainable. By working closely with partners, including hospitals and organisations like Amazon and the Gates Foundation, we create innovations that address these challenges. Sustainability in healthcare is a major issue. The environmental impact of hospitals is enormous, and doctors know this. By helping hospitals reduce their ecological footprint, we gain a competitive edge as a partner in innovation.”

Focus on long-term impact and comprehensive approaches

Shifting from short-term gains to long-term sustainability is one of the most significant challenges organisations face. This shift requires comprehensive approaches that go beyond economic measures to incorporate social and ecological impacts.

In some industries, this long-term perspective is already ingrained. Metzke comments: “In healthcare, success should not only be measured by financial gain but also by societal impact. We strive to create value that is economically viable and socially and ecologically sustainable. Our approach focuses on long-term health improvements and sustainable practices that go beyond short-term solutions.”

But achieving this requires access to comprehensive and reliable data, which can be a slow process. Stenholm observes: “Ideally, sustainability data is for everyone as accessible and analysable as financial data Information about sustainability performance should be at a company's fingertips, enabling scenario analysis and strategic decision-making. Today, we already see an increasing natural flow of data across the value chain, significantly reducing labour-intensive data collection processes.”

Cultural and organisational shifts

Organisations are experiencing a cultural shift from rigid, rule-based systems to more flexible, principle-driven approaches. This transformation aims to enhance creativity, responsibility, and engagement among employees, which are crucial for fostering innovation and implementing sustainability initiatives effectively.

Metzke describes this in practice: “Our company has to be flexible. That’s why we decided to be less centralised in our product development, creating innovations closer to the customer. This required a cultural transformation – from a rule-based to a more principle-based approach. Our company’s purpose proved to be a useful guideline. Instead of issuing instructions to 700,000 people, we leverage their creativity and intelligence. By giving employees more autonomy and responsibility, we foster a culture of involvement and motivation. Of course, not everyone adapts easily. You need to maintain dialogue with those who are sceptical, understanding their concerns and working constructively.”

Steenland also sees the benefits of decentralisation: “Our recent adoption of a decentralised model grants each business unit more autonomy, allowing energy efficiency to advance naturally as clients value it across the board. Personally, I’m fortunate to oversee functions like sustainability and strategy, enabling me to guide projects toward sustainable outcomes. For example, we launched a re-manufacturing business, which began as a strategy project and later scaled up under our Horizon 3 Committee for long-term initiatives.”

Role of data and feedback mechanisms

The use of data to drive sustainability efforts is vital. Effective feedback mechanisms, such as annual reports and product assessments, enable organisations to set realistic goals and make science-based decisions to minimise environmental impacts and improve operational practices.

Metzke emphasises the importance of data: “At Philips, our annual climate-related financial reports and product assessments are critical. They help teams make informed, data-driven decisions about sustainability. This approach allows us to set and achieve science-based sustainability goals, reducing environmental impact and improving healthcare.”

A key discussion point is the standardisation and sharing of data across the value chain. Many organisations struggle with redundancy and the complexity of data requirements from different stakeholders. Collaboratively finding ways to streamline this process, while addressing concerns about data sensitivity and competition, is crucial for advancing sustainability effectively.

Turning sustainability metrics into actionable insights

Embedding sustainability into your business requires not just ambition but actionable strategies supported by reliable data. Deloitte’s Strategic Impact Assessment (SIA) helps organisations assess sustainability performance, develop transparent strategies, and report effectively across the value chain.

Developed from over a decade’s practical experience and insight, SIA offers a high-level view of your organisation’s effect on the environment, economy and wider society – and then prioritises actions to improve your position.

The tool considers the impacts of an organisation’s whole value chain, in terms of six broad realms, or capitals: human, financial, intellectual, social, manufactured and natural. Within each, it identifies specific impacts which can be measured, monetised and aggregated, to quantify each capital.

What makes SIA stand out is its ability to measure social and environmental impacts and to convert them into the same monetised units as conventional business results, making them easier to compare.