‘Sustainability can also generate money’

Integrated reporting is an important development that many entrepreneurs choose. It provides a good handle to increase the relevance of business information to stakeholders. It ensures not only a better report, but also a better translation of strategy into policy and a more sustainable world. Nyenrode teacher Ferdy van Beest: ‘The current problems with nitrogen and pfa’s show that companies really need to deal with sustainability and the long term in a different way. It is no longer just about economics, but also about issues such as diversity and the environment. ‘

“The basis for integrated reporting is about connecting the organization’s business with all kinds of non-financial aspects, including sustainability aspects. It is not enough just to glue a sustainability report and an annual report together, ‘says Dr. Ferdy van Beest, senior audit consultant at Flynth and assistant professor at Nyenrode Business University. ‘The whole nitrogen crisis shows that companies have to deal with sustainability in a different way.’
The result is, also due to changed legislation, that the reporting can no longer be related exclusively to finances. “One must also look at diversity, the environment and chain thinking,” argues Van Beest. ‘Integrated thinking is therefore not just about writing it down nicely, but about feeling the urgency of the organization’s fibers’.

Sustainability is urgent

Take IT, for example, says Van Beest. IT is about the interior of the organization. To what extent has the idea of ​​sustainability, diversity and other non-financial information also been carried through to the inside of the organization? Have you deliberately bought laptops that are more durable, last longer or have higher security? Is it just a shell around the outside of the organization, or has it actually penetrated all facets of the organization? Do you see it in all possible areas? Van Beest sees urgency in two things:

  1. Your license to operate. ‘See the nitrogen crisis. If you are not concerned about sustainability, you may suddenly face a fait acpli. You’re losing your license to operate. ‘
  2. It makes money. ‘Various studies have shown that investing in sustainability does not have to cost money. It often generates money for organizations. At Flynth, I have collected data from milk production that show that certain factors lead to lower CO2 emissions and improve the farmer’s economy. So it can make a difference in all kinds of organizations, not just very large ones. ‘

What do we see in practice when it comes to sustainability?

The question is: how can I contribute to the world in the long run? And you can make money from that.

As a senior advisor at Flynth and a teacher at Nyenrode, Van Beest sees many companies in his practice. There he notices great differences. Is sustainability essentially just a shell around, or have companies already got the message? Van Beest: ‘More and more companies are working on sustainability, but not all companies are moving forward. If you look at the stock market, you will see that Akzonobel still holds a sustainability report and an annual report together. You do not ‘feel’ it is urgent there. At Philips, on the other hand, they are very committed to sustainability and they use the circular economy as a basis for maintaining their license to operate. ‘

Read also: Trend research financial closure 2019: Integrated reporting and integrated thinking are clearly moving forward

New business models

At the end of 2021, the Crystal Award for Transparent Reporting went to Philips. In 2019, the NBA and the Ministry of Economy awarded the Royal Schiphol Group the Crystal Award for the most transparent reporting. At the time, the jury stated that Schiphol clearly reports on sustainable themes and that it is also transparent in terms of areas for improvement. Does such an award say anything about Schiphol’s sustainability? Van Beest: ‘Companies like Schiphol, KLM and Shell have their reporting in order. The big bang around IFRS 9, 15 and 16, for example, was processed very early at KLM. But the fact is that as early as 1988, Shell knew that fossil fuels would lead to global warming. Then you can say ‘we plant new trees and we make the customer pay more to be CO2 neutral’, but their business model degrades sustainability. However, the improvements are often marginal. If they really wanted to improve, Shell would make sure there is a hydrogen engine, and Schiphol would have to provide alternative sustainable transportation instead of continuing to grow, but that would undermine their entire current business model. Philips can embrace this. They can achieve a huge reduction in waste by reusing sources. ‘

Read also: Diane Zandee, Schiphol: ‘What we are trying to realize is actually integrated thinking’

Sustainability: How do you approach it?

How will you approach this as a business? How do you get hold of this? “First of all, you have to realize that it is not a decision that is made from one day to the next. These are steps you can take, ‘says Van Beest. ‘Suppose you want to be more sustainable. Then it can be done in different ways. First, try to figure out which investments are also making money, so you get a double effect. And look around too. What do others do, and what can you learn from it? Think, for example, of a faucet with a sensor, so you use less water. Or use of solar panels. Make it mandatory for people to work from home for 1 or 2 days. Or get them to drive electrically, share cars, use public transportation. And give them a maximum number of prints per month. All small steps. But you can also do a lot on an operational level this way. A good approach obviously depends on the industry in which the company operates. ‘

Integrated thinking looks long term

‘Integrated thinking is also about long-term thinking; it must be in the fibers of the organization, ‘Van Beest continues. ‘What about absence in the organization? A sick employee costs around 230 euros per. day. If you have a large group of employees who are facing burnout, then what is your long-term policy? Or is it for short-term gain (read: working too much overtime). It’s not about thinking solely on the basis of shareholder value ‘how can I earn as much as possible as quickly as possible’, but how can I contribute to the world in the long run. And you can make money from that. Look for opportunities that go hand in hand. ‘

In this lecture series, organized by cm: in collaboration with Nyenrode Business University, the development in the field of accounting and control and the changes in the field are discussed by expert teachers from different disciplines. The lecture series consists of 6 lectures. In a short time you will be fully informed and you will receive tools to get started yourself. dr. Ferdy van Beest is the speaker at the lecture on integrated reporting, sustainability and integrated thinking. Click here for the complete program for the Accountancy & Controlling lecture series.

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