What Is Corporate Sustainability?

Business doesn’t operate in a vacuum. Decisions made in the boardroom have economic, social, and environmental consequences that impact everyone.

Corporate sustainability refers to the efforts corporations make to mitigate environmental, social, and governance risks while remaining profitable, encouraging growth, saving on costs, and building their brand’s reputation.

Corporate sustainability challenges companies to consider more than the bottom line when making new decisions and auditing current practices. At the same time, it’s increasingly becoming a vital point of comparison for investors, and businesses that pursue sustainability and disclose their progress are much better positioned to secure funding.

In this article, we’ll cover everything you need to know about corporate sustainability, including:

• What is ESG?
• What are the benefits of corporate sustainability?
• How to develop your corporate sustainability strategy
• Challenges to corporate sustainability
• Best practices for corporate sustainability
• Regulatory and compliance issues and corporate sustainability

ESG: Three pillars of corporate sustainability

Discussions about corporate sustainability center on ways businesses can go beyond traditional views of growth and profits to look more holistically at their impact on the environment, equity, and economic development.

Corporate sustainability encompasses three main areas of focus: environmental, social, and governance (ESG) practices. These three categories help businesses accomplish goals like reducing their ecological footprint, decreasing the consumption of limited resources, and implementing socially responsible practices.

In the past, measuring company performance was based solely on financial and capital reporting. But today, everyone from business owners and investors to employees and clientele is more invested in finding comprehensive ways to measure success, performance, and impact. ESG metrics offer some visibility into a company’s overall commitment to sustainability.

With Tango Energy & Sustainability by WatchWire, you can use customizable dashboards so people in various roles can create custom views for analyzing environmental sustainability data and monitoring key performance indicators (KPIs).

Let’s take a closer look at each of the three ESG pillars:

1.  Environmental focus

Corporate sustainability requires monitoring a company’s environmental impact and risk management. This includes the company’s consumption of natural resources like water and fossil fuels, their greenhouse gas (GHG) emissions, and their overall carbon footprint. It also considers a company’s impact on biodiversity or deforestation, and how prepared they are for the effects of climate change.

This focus helps companies consider ways to:

• Reduce waste
• Incorporate more eco-friendly materials into their production processes
• Improve efficiencies that reduce energy use and resource consumption
• Create a greener supply chain
• Make operations and infrastructure more resilient against extreme weather events

Environmental sustainability at work

Etsy set a goal to become the first major online shopping destination to offset 100 percent of carbon emissions from shipping by investing in emission reduction projects like wind and solar farms and requiring suppliers to receive an A on their annual Carbon Disclosure Project assessments to avoid paying a carbon fee. You can read more in their environment impact update.

2. Social focus 

A company should be conscious of the support it gets from its shareholders, employees, and the local and global community. This area of ESG reporting focuses on a company’s impact on people.

For employees, it might include things like maternity leave and family benefits, employee retention, health and safety standards, flexible scheduling, remote work, development opportunities, and diversity. Regarding the local community, businesses might consider promoting volunteerism, creating sponsorships, or sharing their space for events. Social sustainability can also include a company’s impact on its customers, clients, and partners.

Diversity, equity, and inclusion (DEI) are the most prominent social sustainability issues. Businesses that take their social responsibility seriously focus on ensuring their employee populations, leadership teams, and board more accurately reflect their country’s demographics, giving equal opportunity to women, people of color, and historically marginalized groups.

Social sustainability at work

Salesforce’s Marc Benioff baked philanthropy into his organization with the 1-1-1 model. This commitment requires that one percent of Salesforce’s equity, technology, and employee time go to philanthropic causes and the non-profit sector.   

3. Governance focus

Governance represents an organization’s practices, procedures, and goals to govern itself. It’s sustainability’s economic pillar. It focuses on areas like executive compensation, succession planning, board management practices, and shareholder’s rights.

Among other things, this means putting processes in place that:

• Align the board with the corporate sustainability strategy
• Create and expand practices and controls to meet sustainability goals
• Capitalize on data to identify sustainability risks and align strategic and regulatory needs
• Incentivize the ethical and sustainable behaviors that correlate with your values
• Prioritize financial and behavioral transparency

Governance sustainability at work

Patagonia provides an excellent example of sustainable governance. There isn’t an unscrutinized aspect of their supply chain. In every area, they’ve worked to maximize safe working conditions and fair labor practices while reducing their environmental impact.

Their Supplier Workplace Code of Conduct is aligned with the labor standards of the International Labour Organisation (ILO). And it addresses labor issues throughout their supply chain regarding things like child labor laws, harassment, discrimination, wages and benefits, health and safety, environmental standards, community engagement, and subcontracting.

What are the benefits of corporate sustainability?

There’s no question that corporate sustainability is an investment. It requires significant human resources and capital. Some would argue that a company’s primary responsibility is maximizing shareholder returns, and energy spent elsewhere is a distraction. However, several legitimate and valuable benefits come from investing in sustainability.

1. Regulatory compliance

There are significant (and increasing) mandatory sustainability-focused regulations and reporting requirements, and failing to comply with them can result in fines, lawsuits, and other penalties. These obligations are shaped by both governmental and international bodies and consist of both current and evolving standards. Businesses not only have to understand and comply with these regulatory requirements, but they also have to respond and adapt quickly to new or changing expectations.

Committing to corporate sustainability puts your organization in the driver’s seat, allowing you to build a framework that meets these standards while forging procedures that meet your organization’s goals.

When you’re already working to offset your company’s impact and issuing regular environmental impact statements, it gives you a leg up on these regulatory requirements.

2. Increased profitability

The up-front cost associated with corporate sustainability is one of the biggest hurdles for investors and stakeholders to overcome. However, the simple fact is that sustainability translates into profitability when done correctly.

Research conducted in 2019 by NYU Stern’s Center for Sustainable Business found that market share with sustainability-focused products grew 5.6 times faster than similar products. People are looking to invest in companies that share their values, and manage sustainability risks. This is why many companies believe that market conditions, consumer preferences, and increased operational efficiencies point to long-term profitability.

Sustainability pushes innovation forward. We see this demonstrated in the growth of renewable energy sources, changes in resource efficiency, and circular economy practices. Innovations like these lead to cost reductions, new market opportunities, and enhanced brand reputations, ultimately impacting the bottom line.

3. Improved brand loyalty

Brand loyalty isn’t what it used to be. According to research from Nielsen, only 9 percent of consumers claim to be loyal to certain brands. But zeroing in on Millennials, it was found that 7 in 10 would be less loyal to a brand if they found that a brand didn’t pay its employees well, and 69 percent would do less business with a brand that relied on unethical labor practices.

Trust and credibility are among the most significant competitive advantages a company can have in the loyalty department. Consumers no longer see environmental and social responsibility as a supplementary benefit of a service or product. It is considered a requirement, and even if it doesn’t immediately translate into a commitment to a brand, the lack of sustainability can be a support killer.

4. Talent attraction and retention

A Blue Beyond Consulting study uncovered interesting data about the employee/employer relationship regarding corporate sustainability.

• 8 out of 10 employees felt that it’s important that their company’s values align with their own
• 52 percent are likely to quit jobs that don’t align with their values
• 76 percent of employees consider it essential that their employer is a force for good

When your company demonstrates a commitment to sustainability in your culture, purpose, and practice, it attracts top performers to your organization. Not only that, but they’ll also be the most likely to carry a passion for your vision for sustainability into the future. A company focused on its ESG is more appealing to young and upcoming talent who will be tomorrow’s sustainability leaders and innovators who keep the cycle turning.

But it’s more than an issue of attracting the right people; it’s about holding on to the right people. When employees feel connected to the company’s vision and priorities, they stick around. Organizations that aren’t aligned with employee values must count on compensation to do all the heavy lifting in the relationship. But that means they’re always at risk of losing people to better-paying positions elsewhere. Focusing on your ESG responsibility can tip the scales in your favor.

In the 2022 Argyle-Leger Confidence Report, it was found that 6 out of 10 US workers consider respect, benefits, and work-life balance to be their chief considerations when considering a job, and only 42 percent prioritized salary. If you want to find and hold onto a talented workforce, focusing on environmental, social, and governance issues will make a huge impact. 

5. Investor confidence

A talented employee pool isn’t the only thing your sustainable focus will attract. More and more, investors are considering ESG factors when making investment decisions. They’re looking for sustainability practices, intelligible goals, and transparent reporting.

Sustainability attracts investors and builds their confidence by providing:

• Clear goals backed up by solid KPIs
• Third-party assurance that gives investors credibility from reputable organizations
• Alignment with industry standards like GRI or SASB
• Identification of sustainability risks along with proactive plans to address them

6. Elevated efficiency and minimized costs

Over time, corporate sustainability proves itself through greater productivity and lowered costs. Resources like water and electricity are conserved, and waste is reduced, significantly lowering overhead. But that’s not all; the impact is felt in other areas that improve efficiency and reduce cost.

As companies lean into sustainability, they optimize processes and eliminate inefficiencies. Not only are processes improved, but as companies lean into renewable energy adoption and sustainable designs, they decrease reliance on fossil fuels, decrease carbon emissions, and an overall increase in the lifecycle for machinery and tools.

Nearly every sustainability decision leads to cost-saving changes, including optimizing transportation and fuel usage, reducing paper consumption, and upgrading LED lighting.

7. Improved environmental impact

The things that make for better efficiency and reduced costs can also improve a company’s environmental impact. Corporations taking these issues seriously can be proud of their stewardship of the environment.

Corporations can have a positive impact on the environment when they:

• Continue to reduce their waste
• Switch to renewable energy solutions
• Lower and offset their carbon emissions
• Manage their impact on ecosystems
• Conserve water
• Advocate for sustainable policies

Practices like these fall under the umbrella of corporate sustainability and, over time, transform an organization’s impact on the environment.

8. Mitigated risk

Businesses fight battles on several fronts. Knowing what area might become a huge vulnerability isn’t always easy. But a commitment to sustainability can reduce your company’s risk in several crucial areas.

• Brand reputation
  Creating a transparent record of your company’s commitment and history of sustainability not only positively impacts your brand, but it also helps reduce any risk of negative publicity over environmental and social issues.
• Regulatory compliance
  When an organization practices sustainability proactively, it helps them stay ahead of constantly evolving environmental regulations and mitigate the threat of fines and legal issues.
• Supply chain resilience
  Sustainable practices impact every area of operation. This includes how an organization’s supply chain functions. Sustainability can reduce the disruption of things like labor disputes, resource scarcity, and climate change.

These aren’t the only areas of lowered risk. Many of the listed benefits here amount to risk reduction. Things like employee retention, improved efficiency, investor confidence, and increased profitability all amount to lowered risk.

How to develop your corporate sustainability strategy

Businesses need a long-term, comprehensive strategy coordinating their objectives and ESG goals. But how do you get the ball rolling? Let’s look at some specific steps to help kickstart that sustainability momentum.

Align your leadership and shareholders

A recent study of C-level executives by Carrier found that 57 percent of C-suite executives cite sustainability as their top priority in 2025. This is heartening news, but many leaders and investors still see sustainability as a trade-off with traditional business priorities and feel a natural tendency to focus on these priorities first.

You can begin building support for sustainability goals by:

1. Identifying your stakeholders and their motivations
   While it’s critical to understand where your leadership and shareholder interests lie, getting a read on your critical stakeholders is essential. This means knowing how your contractors, suppliers, consultants, community members, and employees feel.
   
   Sometimes, when we can demonstrate that the most influential stakeholders feel strongly about sustainability, it’s much easier to sell to investors. Also, identifying those stakeholders and their impressions will help you know who else you might need to coax into alignment with you.
   
   Start by identifying the most prominent and influential stakeholders. If the pool is smaller, you can have one-on-one discussions with them. If there are a number of them, you should send out a survey to give you clear and irrefutable data, then consider one-on-one discussions with a smaller sampling of key stakeholders.
2. Communicate clearly and effectively
   Once you know who you need to communicate with, it’s time to pull your message together. Your message to various groups needs to be unique. For leadership and shareholders, you’ll need to communicate the benefits of sustainable practices, talk about the sustainability practices of similar organizations, address concerns, and open dialogue to develop solutions and goals.
   
   For other stakeholders, this might mean educating and informing them about sustainability and help them see how it will impact and benefit them in their roles.

Run a materiality assessment

How does a business identify and prioritize its most significant ESG issues? A materiality assessment is an integral part of that process. Materiality is the principle of defining the environmental and social issues that matter most to your organization. This assessment allows you to gather stakeholder input as you pinpoint your organization’s most significant focus areas.

Materiality assessments offer numerous benefits. They allow companies to evaluate risks and recognize opportunities. They guarantee stakeholders can speak into the process, boosting transparency and brand reputation. And they create alignment and increase buy-in among stakeholders.

Sustainability materiality assessments can be broken down into seven phases:

1. Defining the assessment’s purpose, scope, and audience
2. Identifying material topics (based on a relevant set of sustainability standards)
3. Categorizing your list of topics
4. Gathering information
5. Prioritizing material topics
6. Engaging management
7. Receiving stakeholder feedback

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Set your target and goals

The best corporate sustainability programs set goals that are both ambitious and realistic. This is much easier said than done. Corporations must navigate constantly evolving regulatory demands, stakeholder expectations, scientific and technological changes, and normal business pressures. They can expect some criticism and pushback if their plans aren’t zealous enough; trying to do too much too quickly can be disastrous.

The best way to set realistic targets is includes:

1. Having a clear picture of your starting point
   This is one of the benefits of a good materiality assessment. It helps an organization understand where they are and what changes will have the most significant impact.
2. Shoot for scientific, data-driven goals
   The only targets that will really matter are the ones backed up by actual fact-based research. If you’re looking for a smart framework to get started, you can check out the Science Based Targets initiative (SBTi)  and the UN Sustainable Development Goals (SDGs).
3. Ensure targets align with your business
   There’s no point setting goals that aren’t aligned with your core business. This is another reason the materiality assessment is critical. It enables you to analyze your value chain, integrate sustainability directly into your business strategy, and allocate resources in ways that make the most sense.
4. Set short-term goals and long-term targets
   The SBTi’s criteria for near-term (previously short-term) targets is a minimum of five years and a maximum of ten years. Anything beyond that is a long-term target. Setting these kinds of goals isn’t easy, but organizations like Inner Developmental Goals can provide a framework to help you set targets you can reach.

Tango Energy & Sustainability by WatchWire makes setting targets you can hit easy. You can collect energy, utility, and emissions through real-time metering that can be organized and audited in one place. Track GHG emissions, see your carbon offset view of power purchases, and monitor goals like Net Zero targets, SBTi, and waste diversion.

Communicate your sustainability mission

Any sustainability strategy relies on effective communication. Everyone in leadership needs to be on the same page. Investors and shareholders need to know how things are progressing. And employees and other stakeholders need to be able to adapt to changes as they arise.

This means your communication needs to be consistent, clear, factually correct, accurate, and avoid any greenwashing. Good communication also requires transparency about specific challenges, areas requiring improvement, and even areas of failure.

Significant challenges to corporate sustainability

The transition toward sustainability isn’t without its hurdles. Not only do corporations have to juggle their own values and goals, but there are regulatory obligations to consider, not to mention stakeholders’ expectations. Prioritizing sustainability means setting a goal and staying the course while adapting to new situations and information.

Let’s examine some of the challenges your business can expect:

Regulatory challenges

International businesses all deal with the fact that climate science is evolving, and the data is getting better every day. This improved information can impact what regulating bodies expect from businesses and the reporting they expect to see.

On top of that, compliance requires navigating a labyrinth of regulations and reporting requirements. You may have federal or parliamentary expectations and have state, provincial, or local requirements on top of them. Businesses in multiple jurisdictions can feel the strain of staying on top of various provisions to avoid fines and penalties. And you may have specific obligations based on your industry, in addition to the requirements everyone else has to follow.

The unintentional consequence of navigating this regulatory maze is that corporations can focus on what is easily achievable and measurable to meet these requirements instead of setting more ambitious, more challenging goals to measure and quantify. Often, the complexity of requirements can also cause organizations to focus more on reporting on sustainability than actually implementing sustainable initiatives.

On top of the complexity of regulatory requirements and compliance issues, there are the bottom-line costs. Data collection, analysis, and reporting costs

Investment costs

One significant criticism you’re sure to hear about sustainability is that it offers a negative net present value (NPV). The argument is that the anticipated costs of making greener and more social-forward decisions exceed the benefits.

Some shareholders and CFOs might argue that there isn’t enough demand for sustainable products to offset the high production costs. Or that when you factor in fair pay, longer production times, and more expensive raw materials, the costs are just too high. Even the costs associated with sustainable certifications can seem prohibitive. And of course, making your infrastructure more resilient against climate change can often feel out of reach.

The struggle is in weighing short-term costs against long-term savings and risk reduction. As we pointed out in the benefits section, lower energy and resource consumption and lowered maintenance costs can contribute to a long-term payoff. Not only that, but businesses need to factor in things like the financial incentives for sustainability, and stronger brand loyalty.

Supply chain issues

For a lot of companies, the supply chain is where many of the biggest ESG challenges exist. Supply chains can represent the majority of a company’s greenhouse gas emissions and also create the biggest impact on labor practices. Unfortunately, there isn’t always a lot of transparency across the entire supply chain, and it can be legitimately difficult to ensure that every link in the supply chain meets sustainability standards.

True sustainability requires companies to critically examine the environmental, social, and economic factors inherent to their supply chain. This requires thoughtful collaboration with stakeholders to increase transparency and push for meaningful change that offers long-term impact.

Due to the difficulty of calculating GHG emissions throughout your entire supply chain, most organizations aren’t required to disclose Scope 3 (downstream) emissions data yet, but it won’t be long before investors and regulators require this more detailed reporting.

Customer preferences

In a time when brand loyalty is waning, investments in sustainability can feel like a gamble. Should companies make decisions that impact prices and potentially diminish sales? Are consumers more loyal to their wallets than any particular brand?

According to the Capgemini Research Institute, only 36 percent of organizations truly believe consumers will choose brands based on social or environmental impact. But the truth is that 79 percent of consumers already do so.

Measurement, recording, and communication

To achieve sustainability, companies need reliable data. They need to be able to trust and interpret sustainability-related data and know how to respond to it as well as communicate it to shareholders and stakeholders.

All of this represents a significant investment in the tools, software, consultation, and labor necessary to make all of this possible. It also requires an ability to standardize measurements and data in different cities or even countries. This is compounded across a complex supply chain.

These challenges can be overcome by creating a robust framework of expectations and metrics and ensuring you have the expertise to consistently pull information together and make it actionable.

Tango Energy & Sustainability by WatchWire helps monitor and analyze environmental sustainability data by consolidating and standardizing utility data from your providers, making it easy to evaluate your portfolio, audit your data, recognize anomalies, and compare data from different locations.

Competing priorities

It’s easy to imagine that most companies have a top-down authority model, and implementing change is simple. But that’s just not the case. Every organization has internal priorities jostling for superiority, and it requires sensitive internal politics to get all stakeholders pulling in the same direction. These challenges can make normal, everyday operations challenging, and it can really impact ESG goals.

If you’re not careful, these conflicting priorities can cause implementation delays, confusion among teams, and backlash from stakeholders who feel their interests are not being taken seriously enough.

Stakeholder engagement and collaboration

One of the things that makes juggling shareholder interests so difficult is that their needs are so diverse. Clients, customers, employees, suppliers, and people in your community all have different relationships to your organization. Getting them all onboard and aligned behind your sustainability plans can be a tall order. It means overcoming varying priorities, communication barriers, and diverse power dynamics.

But these obstacles can be overcome by identifying your various stockholder groups and their interests, concerns, and level of influence. This can be done by stakeholder mapping, which will help your organization understand the playing field a little better.

Constantly moving targets

Managing sustainability goals would be so much easier if it were a static discipline. However, the whole topic can feel like a moving target that includes ever-changing regulations, evolving technologies, and shifting public perceptions. Because of this, businesses can struggle to set clear goals and to maintain confidence from everyone involved.

And while this can feel like an overwhelming complication, it can be overcome by baking an adaptive approach to meeting your goals. As you monitor and evaluate your company’s trends and regulatory expectations, you can adjust your strategies whenever necessary. 

Reporting overshadowing progress

In a culture skewed toward measurement, data, and reporting, priorities can get misaligned. The focus can quickly become more about facts, figures, and presentations rather than meaningful momentum. The lack of standardized metrics can make it a challenge to find data that actually tells companies and stakeholders how they’re doing and makes it easier to manipulate data and greenwash.

This can be overcome by building an ESG framework with clear expectations and metrics. Reporting should serve legitimate progress—even if that progress isn’t entirely linear. Reporting needs to serve the company’s priorities and not vice versa. The information needs to be transparent, communicating the victories and challenges, and occasionally backed up by independent, third-party verification.

Lack of a standardized approach to sustainability

Corporate sustainability would be much more manageable if a universally acknowledged set of metrics and guidelines existed. Without one, it’s difficult to gauge your effectiveness by comparing your progress to competitors and to align your progress across regional and international boundaries where various metrics and regulatory expectations exist.

Thankfully, organizations like the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) are hard at work developing a shared framework for measuring and reporting sustainability progress. And the global trend among regulators is to standardize approaches—for example, the Task Force on Climate-Related Financial Disclosures (TCFD) has disbanded and now defers to the IFRS.

Best practices for corporate sustainability

So how can a corporation ensure that it is a sustainability leader and making headway on eco-friendly and socially responsible initiatives in the face of these challenges? Start by ensuring you’re following these best practices.

Find tools to make collecting data and communicating findings easier.

Your entire sustainability platform stands or falls based on the accuracy and consistency of your data. When you can trust your data to give you a clear picture of where you stand and can extrapolate accurate information from that data, you’ll make huge strides toward your sustainability goals.

Investing in the best software and reporting tools can feel like a significant upfront investment, but it will pay off in the long term in terms of time saved and progress made. That’s why organizations have turned to Tango Energy & Sustainability by WatchWire.

This enterprise-grade cloud-based platform provides advanced analytics for all your commodities and an intuitive, user-friendly navigation and customization so your team can focus on hitting your targets and reaching your sustainability goals.

Align company priorities with sustainability goals and initiatives

Everything should start with coordinating your ESG goals and company priorities and policies. This is where a materiality assessment and sustainability audit can help you identify your primary concerns, values, and strategic objectives by helping you establish measurable targets across the board in areas like carbon footprint, water use, sexual harassment and anti-discrimination policies, and transparency.

Once the initial framework is laid out, you can bolster it with employee training and shareholder engagement, supply chain management, and integrating your goals and initiatives into new business decisions and processes.

Identify the changes that will have the most impact

It probably isn’t feasible to make every potential change at once or invest in every area that needs an upgrade. But a materiality assessment should help you identify the areas that will help you move the needle fast.

As you consider your company’s workforce, look for areas that need immediate attention for regulatory compliance. If you’re all good there, you might think about what changes will align with your values and have the largest immediate impact on your employees. That could be adjustments to remote work or maternity leave. Perhaps you need to make a point of hiring more diverse, inclusive leadership.

Or maybe you’re looking at your supply chain and recognize areas that need improvement. Pinpoint the ones that will give you the biggest immediate wins. Maybe that means moving to a new delivery model or vendor, or it could look like updating your procurement policies to ensure you’re making sustainable choices in sourcing your materials.

Making these changes that have an immediate payoff builds momentum and increases buy-in from stakeholders and investors alike.

Make education and engagement a priority

Not only do you need to keep stakeholders engaged and invested in your sustainability processes, but you need to do the same for your employees and the various links in your supply chain. This includes providing transparent reporting and timely follow-up for everyone in the organization.

Obviously, you want to tailor your reporting clarity to the appropriate stakeholder and employee level, but everyone should have a clear understanding of company sustainability goals, progress toward those goals, obstacles and challenges, and why these changes are essential.

Everyone needs to work together to bring ESG goals to fruition, and companies that excel in this kind of communication tend to have a better reputation, increased customer loyalty and greater investor confidence.

Continually improve your energy efficiency

Energy efficiency is one of the key pillars for creating a positive environmental impact. Not to mention reducing costs and reaching your long-term sustainability goals. But it’s definitely not a set-it-and-forget-it area. It’s one you’ll need to constantly monitor and adjust.

Over time, this might look like making building upgrades to your insulation or HVAC system. It might mean new equipment purchases like replacing less-efficient machinery or investing in tools that track energy consumption more proficiently. Over time, it could mean increasing your investment in renewable energy sources like solar or wind.

Regulatory and compliance issues and corporate sustainability

There is no singular reason why companies decide to invest in corporate sustainability. The onramps are numerous, and the reasons are complex. But once you start this journey, it can feel like you’re drowning in a sea of red tape and regulatory obligations.

The challenge isn’t simply about adhering to specific requirements. It’s about staying on top of varying regulations across multiple jurisdictions. It also requires anticipating future developments and adapting to a constantly changing regulatory environment.

Recognizing the value of regulatory compliance

It’s easy to think of regulatory agencies as third-party interlopers who only exist to erect roadblocks between your company and its goals. But they actually provide legitimate value to your sustainability program and can help you hit your ESG targets. Here are a few ways the regulatory obligations help:

1. Improved transparency

One can’t overemphasize the pressure leaders feel to meet shareholder and investor expectations and public perceptions. It’s no wonder there is such a strong temptation to greenwash a company’s impact, downplay the challenges, and misrepresent the investment costs of sustainability.

And even though some regulatory obligations can seem like a poorly managed imposition, these expectations (along with the risk of penalties) help keep everyone honest. And this is important because it helps keep some corporations from getting away with ESG abuses while others bend over backward to create sustainable success.

2. Risk mitigation

Committing to regulatory compliance protects you from the penalties of not meeting legal and industry standards. This means you’re protected from financial penalties, legal consequences, and damage to your brand’s reputation.

3. Meeting stakeholder expectations

By committing to regulatory compliance, you communicate a commitment to openness and excellence. It demonstrates that everything is above board and ethical.  And consistent, honest internal communication and reporting builds trust and credibility.

Clients and customers can trust your dedication to sustainable practices. Employees can trust your attentiveness to safety and socially responsible working practices. Investors know you take risk mitigation seriously and are clear-eyed about ESG targets and challenges. And your community believes in your positive local impact and devotion to environmental friendliness.

Regulatory differences from jurisdiction to jurisdiction

If your company is spread across the United States, you’re not only responsible for federal regulatory obligations, but you also need to stay on top of various state ones. This isn’t any different for the provincial and federation requirements companies across Europe contend with. And if your company’s supply chain is dispersed across multiple countries, these regulatory frameworks increase exponentially.

When you consider that there are an estimated 600 different sustainability frameworks and regulations globally, organizations can feel overwhelmed when choosing the sustainability standards they should follow. Luckily, there is a lot of overlap in these various frameworks, and organizations are looking for ways to align these disparate frameworks. It’s fair to assume that over time, the myriad of regulatory requirements will evolve into a more cohesive framework.

Corporate sustainability isn’t a nice idea. It’s something that corporations and businesses ignore at their peril. The benefits sustainability offers make it a pursuit worth investing time, energy, and capital. And as companies embrace sustainability as a priority, they’re investing in a better future for all of us. 

Simplify sustainability management with Tango

Sustainability is a major challenge facing modern organizations, and it’s only becoming more complex as disclosure requirements take effect. The larger your business, the more essential it is that you invest in specialized solutions to eliminate manual workflows and data errors.

Tango Energy & Sustainability by WatchWire helps ease the burden of sustainability reporting by consolidating and standardizing your utility data, even going so far as to automatically audit your data for common errors like duplicate entries and billing period gaps. Direct integrations with ENERGY STAR Portfolio Manager, LEED Arc, GRESB, CDP, and more also help streamline the reporting process. And you’ll also have convenient dashboards for tracking sustainability goals, renewables, and more.

Want to see what Tango Energy & Sustainability can do for you?

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