ARTICLE • 5 min
Are you looking to accelerate your sustainability journey?
See how we can help.
See how we can help.
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Impact MaterialityFinancial MaterialityDouble MaterialityCSRD Double MaterialitySocial Impact
Social ImpactSustainability used to be seen as an optional initiative, something companies could pursue at their discretion. However, the landscape has shifted. With increasing regulations around the world and evolving stakeholder expectations, sustainability is no longer a “nice to have.” It’s now a business imperative. The introduction of stringent sustainability and ESG compliance frameworks means organizations must act—starting with aligning their budgets to support these requirements.
The Australian Government has mandated climate reporting, starting 1 January 2025. The Australian Sustainability Reporting Standards (ASRS) set voluntary and mandatory requirements for general and climate-related financial disclosures.
The EU’s Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) are comprehensive regulations that require companies to report their material ESG impacts, risks, and opportunities starting 1 January 2025.
California signed Senate Bill 219 into law requiring US companies doing business in California to disclose Scopes 1, 2, and 3 GHG emissions and climate-related financial risk information.
Regardless of whether your organization is directly subject to these regulations, you're likely to feel the ripple effects through supply chain pressures, customer demands, investor expectations, and societal shifts. Prioritizing sustainability in your planning and budgeting process is now essential. Begin by asking key questions: What compliance requirements must we meet? What resources will we need? How do we foster internal confidence and capability?
For more insights on developing a comprehensive sustainability roadmap, check out our article: How to Build a Successful Sustainability Roadmap: Five Foundational Steps
When budgeting for your sustainability program, there are multiple factors to consider. Keep in mind that sustainability is not a one-size-fits-all endeavor.
It’s insufficient to simply hire a sustainability professional, budget for their salary, and expect them to manage everything alone. A successful sustainability strategy requires broader investment. For instance, your team may need to collaborate with experts in materiality assessments or carbon accounting, or invest in tools to streamline data management. Additionally, you’ll need to allocate both human and capital resources for training and development. Lastly, with the rise of sustainability reporting requirements, third-party assurance has become essential, adding another critical item to your budget.
Headcount
Some organizations already have a sustainability lead or team in place, while others are just starting to consider adding headcount. The questions abound: Who do you need on your team? Where should they fit within your organization? Is it more effective to hire a consultant or invest in a technology platform? These are all crucial considerations when budgeting for sustainability personnel.
Strategically identifying sustainability champions across departments can help drive your initiatives forward when it's time to secure the budget. This approach is often more effective than relying on a single sustainability manager to advocate for resources. By embedding sustainability into various functions, it becomes a cross-functional effort rather than a siloed project. Each department has its own budget, and when sustainability is part of that broader organizational framework, it gains more recognition and support.
Technology
Many sustainability professionals express frustration with their reliance on spreadsheets, which can easily become unwieldy and prone to errors. Tracking multiple versions of spreadsheets across the organization often leads to confusion, and human error is an ever-present risk.
With third-party assurance now a growing requirement, the pressure to meticulously document and verify every detail of your sustainability reporting process has increased. Auditors will request detailed information, including data sources, timelines, and more. While this data might exist in a spreadsheet somewhere, the ability to quickly and accurately retrieve it is critical.
While it’s tempting to seek a single, all-encompassing dashboard to manage everything, the current technology solutions on the market aren’t quite that magical. Instead, technology should complement your existing tools. Software can streamline data collection, improve accuracy, and reduce human error, freeing up your team to focus on strategic initiatives.
Securing funding for sustainability initiatives can be a challenge, especially if you're not the one making the financial decisions. Often, budget approval falls to the CFO or COO, depending on your organization’s structure.
Each company will have its own financial hierarchy for decision-making. In some cases, organizations with a dedicated sustainability team may have their own budget, with the Chief Sustainability Officer (CSO) holding the final say. In other cases, where sustainability is an embedded function, the CFO may retain control over budget approvals. We’ve seen sustainability housed within departments like DEI, operations, marketing, or finance—there is no one “right” structure. The key is to understand who the decision-maker is in your organization and work to secure their buy-in. Turning them into an advocate for your sustainability projects can make all the difference.
The sustainability journey can be divided into three key phases: strategy, execution, and performance. Strategy is where ambitions are set, execution focuses on operationalizing those plans, and performance involves reporting on progress.
Many companies start with reporting, driven by looming compliance deadlines. But the critical question is—what are you reporting on? Before reaching the reporting stage, you need to establish your priorities, create a solid strategy, and take meaningful action. Reporting should not be a mere box-ticking exercise to satisfy compliance. There's a crucial layer of initiatives that must be completed before you're truly ready to begin reporting in a way that reflects your sustainability commitments.
When building a business case for sustainability, it’s crucial to approach it from the perspective that best aligns with your organization’s priorities. Several angles can be considered, so understanding which one resonates most is key.
Legal/Compliance
View voluntary sustainability initiatives as a “compliance add-on”. For instance, if you're required to report GHG emissions, you could expand that to include a climate-risk assessment. You may seek additional budget for initiatives that aren’t mandatory this year but are part of the regulatory roadmap for future compliance.
Revenue/Growth
Sustainability can drive business value by enhancing customer loyalty, improving employee retention, and providing better access to capital. By investing in sustainability, you can position it as a competitive advantage that directly contributes to growth and profitability.
Ethics/Values
Sustainability isn’t just about compliance—it’s about doing the right thing. Highlight the risks of poor sustainability performance, such as reputational damage or missed opportunities in ethical sourcing, DEI, or the circular economy. Making the case for sustainability as a values-driven initiative can resonate with those who prioritize ethical leadership.
Systems Approach
Embedding sustainability into your operations can boost efficiency and lead to smarter decision-making that benefits the Triple Bottom Line—People, Planet, and Profit. When sustainability is integrated into strategy and reporting, it supports better overall business outcomes.
Speak the language of the departments you need buy-in from. For finance teams, focus on the financial impact—whether it’s the cost of sustainability risks or the potential revenue from sustainability opportunities. Using scenario models can be a powerful tool to demonstrate the real risks and rewards of your sustainability projects.
Socialsuite offers a materiality management platform that helps public and private companies around the globe identify material sustainability matters so they comply with sustainability regulations and create strategic value for their business.
Socialsuite’s hybrid-approach of streamlined software and expert advisory helps drive effective and comprehensive sustainability success. Conduct a financial, impact, and/or double materiality assessment using our platform to organize and collect data, engage stakeholders, and analyze results to help prioritize your sustainability issues.
Be proactive, get in touch with Socialsuite today.
Whether it’s a public company, a private company, or a charity, Socialsuite has the right solution for you.