CORPORATE ACTION → STRATEGY
Sustainability Strategy
From understanding to direction – deciding where to focus and why.
Corporate Sustainability Journey
In 30 Seconds
A sustainability strategy translates materiality assessment into direction. It answers: What are our priorities? Where will we focus resources? How does sustainability connect to our business strategy? What level of ambition is right for us?
The challenge: Many organisations jump from materiality straight to target-setting, skipping strategy. The result: targets that don't connect to business reality, or sustainability that remains a side project rather than strategic priority.
The opportunity: A clear strategy creates alignment. It connects sustainability to business value, secures leadership buy-in, and provides the rationale for target-setting and resource allocation.
Strategy vs Targets
Strategy and targets are different things. Strategy comes first and informs target-setting. Confusing them leads to disconnected commitments.
Strategy
- What: Direction and priorities
- Question: Where should we focus and why?
- Timeframe: 3-5 year direction
- Output: Strategic pillars, focus areas, rationale
- Flexibility: Directional, adaptable
Targets
- What: Specific commitments
- Question: What will we achieve by when?
- Timeframe: Specific dates (2030, 2050)
- Output: Quantified goals, baselines, milestones
- Flexibility: Fixed once committed
The sequence matters: Strategy defines what's important. Targets quantify the ambition. Strategy without targets lacks accountability. Targets without strategy lack coherence.
Elements of Sustainability Strategy
A complete sustainability strategy addresses several key questions. The answers inform everything from target-setting to organisational design to stakeholder communication.
Strategic priorities
Which material topics will we prioritise?
You can't do everything equally. Select 3-5 priority areas where you'll focus resources and ambition. Others remain managed but not prioritised.
Business integration
How does sustainability connect to business strategy?
Is sustainability a risk to manage, an opportunity to capture, or core to your value proposition? The answer shapes everything.
Ambition level
Where on the spectrum from compliance to leadership?
Minimum compliance, sector average, sector leader, or industry transformer? Resource implications differ dramatically.
Value creation logic
How does sustainability create business value?
Risk reduction, revenue protection, new opportunities, cost savings, talent attraction, licence to operate? Be specific.
Stakeholder positioning
What do we want to be known for?
Which stakeholders matter most? What reputation do we want? How does this align with material topics?
Resource allocation
How much will we invest and where?
Strategy without resources is wishful thinking. CapEx, OpEx, people, time. What's the investment case?
Integration with Business Strategy
Sustainability strategy can't exist in isolation. It needs to connect to how the business creates value, makes decisions, and allocates resources.
Levels of Integration
Separate
Sustainability as compliance/CSR. Disconnected from business strategy.
Implication: Limited impact, vulnerable to cost-cutting, no strategic value
Adjacent
Sustainability informs business strategy but remains distinct.
Implication: Some alignment, risk management focus, strategic but secondary
Integrated
Sustainability embedded in business strategy. Same planning process.
Implication: Strategic coherence, resource competition, leadership ownership
Core
Sustainability is the business strategy. Purpose-driven model.
Implication: Full alignment, but requires fundamental business model fit
The right level depends on context
Not every company needs to be purpose-driven. The right level of integration depends on your sector, stakeholder expectations, risk exposure, and opportunity set. What matters is that the level is conscious and appropriate – not accidental.
Setting Ambition Level
How ambitious should your sustainability strategy be? There's no universal answer, but there are frameworks to guide the decision.
Push factors (require more ambition)
- • High stakeholder expectations (investors, customers)
- • Significant exposure to sustainability risks
- • Sector peers moving fast
- • Regulatory trajectory clear and demanding
- • Material opportunities from sustainability
Pull factors (constrain ambition)
- • Limited resources and capability
- • Other strategic priorities competing
- • Sector or geography with slower adoption
- • Business model constraints
- • Leadership not yet aligned
The credibility test
Can you credibly deliver on your ambition? Ambitious strategy with no pathway to deliver damages credibility more than modest strategy executed well. Better to be realistic and over-deliver than over-promise and under-deliver.
From Strategy to Targets
Strategy creates the context for target-setting. With clear priorities and ambition level, you can set targets that are coherent, achievable, and defensible.
The Flow
What matters
Where to focus
How far to go
SBTi, SBTN, etc.
Quantified goals
Strategy informs which targets
If climate is a strategic priority, you might set SBTi targets. If nature is peripheral, you might not prioritise SBTN yet. Strategy determines what deserves a formal target.
Strategy informs target ambition
A leadership strategy might mean 1.5°C-aligned SBTi targets. A follower strategy might mean well-below 2°C. Both can be valid – if they match strategic intent.
Strategy in the Journey
Strategy is Stage 4 of the corporate sustainability journey – after understanding, governance, and measurement, but before target-setting.
Strategy translates understanding into direction. It's the bridge between “what matters” and “what we're going to do about it.” Skip this step and your targets lack strategic coherence.
The Pandion View
We believe sustainability strategy should be genuinely strategic – not just a list of initiatives or a collection of targets. It should connect to how the business creates value and makes decisions.
The test of a good sustainability strategy: Does it help you say no? If everything is a priority, nothing is. Strategy creates focus by being explicit about what you won't prioritise as much as what you will.
As a hybrid professional, we help clients develop strategies that connect sustainability to business value. We bring the outside-in perspective needed to challenge assumptions and the business acumen needed to make sustainability strategic.