Developing a sustainability strategy: 7 steps to successful implementation

Why does my company need a sustainability strategy?

• Increasing stakeholder expectations: Customers, investors, and employees expect credible CO₂ data, meaningful actions, and transparent progress.‍
• Regulatory requirements (CSRD, EU Taxonomy): New obligations such as CSRD and ESRS require structured processes, clear responsibilities, and audit-proof reporting. Without a strategy, efficient implementation is nearly impossible.‍
• Economic benefits & risk reduction: A strong strategy lowers costs (e.g., energy, materials), stabilizes supply chains, and improves ESG ratings. Companies like Nexans and Heroal - both Tanso customers - also demonstrate how data-driven sustainability work significantly increases efficiency.

External & internal drivers for sustainable strategies

Regulatory requirements (CSRD, ESRS, EU Taxonomy)

CSRD and ESRS significantly increase the requirements for data quality, governance, and reporting. The EU Taxonomy sets clear criteria for sustainable economic activities. Without a structured strategy, these requirements are difficult to fulfill efficiently.

Market and investor expectations (ESG ratings, customer requirements)

Customers increasingly demand reliable CO₂ data, especially in industries such as automotive or mechanical engineering. Investors closely monitor ESG ratings. A lack of transparency can quickly lead to competitive disadvantages.

Megatrends & climate risks

Climate change, resource scarcity, and energy price volatility increase risks along the value chain. At the same time, energy efficiency and decarbonization create opportunities for cost reduction and innovation.

7 Steps to a successful sustainability strategy

Step 1: Analysis & Prioritization

Inside-out & outside-in perspective

Companies analyze both their own impacts on the environment and society (inside-out) as well as external influences such as climate risks, energy prices, or regulation (outside-in). This double materiality assessment forms the foundation for all strategic decisions.

Understanding double materiality

The ESRS require a double materiality assessment:

• Impact materiality: Which topics have significant environmental or social impact?
• Financial materiality: Which topics affect the business model, costs, or risks?
  

Only topics that are relevant in both dimensions are prioritized strategically.

Stakeholder dialogue & risk analysis

Dialogue with customers, suppliers, employees, and investors makes expectations transparent. A complementary risk analysis identifies urgent issues such as CO₂-intensive materials, supply chain stability, or new reporting requirements under CSRD.

Step 2: Define Goals & Action Areas

Sustainability vision & guiding principles

An effective sustainability strategy needs a clear guiding vision. It describes the long-term contribution the company aims to make—such as climate neutrality, responsible supply chains, or resource-efficient production. The vision provides orientation and creates a shared understanding both internally and externally.

Setting goals: environmental, social, economic

After defining the vision, concrete goals follow. They should be formulated in a SMART way and cover all three dimensions of sustainability:

• Environmental: CO₂ reduction, energy efficiency, waste and resource management
• Social: Safety, working conditions, diversity
• Economic: Efficiency improvements, innovation capacity, resilient supply chains
  

Such goals are essential for meeting CSRD and ESRS requirements in a structured manner.

Selecting relevant action areas

Action areas are derived directly from the materiality assessment. Typical areas for industrial companies include:

• Energy & emissions
• Materials & supply chain
• Circular economy
• Employees & governance
  

These areas form the basis for subsequent measures, KPIs, and reporting.

Step 3: Define Metrics & KPIs

Operationalizing SMART goals

Goals should be formulated in a SMART way: specific, measurable, achievable, relevant, and time-bound. Example: “Reduce Scope 1 and Scope 2 emissions by 20% by 2027” instead of “We want to reduce emissions.” This transforms strategic intentions into a controllable process.

Typical metrics for industrial companies include:

• CO₂ emissions (Scope 1–3): the central baseline metric of any sustainability strategy
• Energy consumption & energy efficiency: e.g., kWh per production unit
• Supply chain transparency: share of suppliers providing CO₂ data or PCFs
  

These KPIs support both internal management and external requirements, such as ESG ratings or customer requests.

Scope 1, Scope 2, and Scope 3 CO₂-emissions explained

Read article

Step 4: Governance & Responsibilities

Anchoring sustainability within the organization

Sustainability must be embedded as a fixed component of corporate management, ideally at the management or C-level. This ensures that goals are prioritized, budgets are allocated, and progress is reviewed regularly.

Steering committees, roles, and resources

Effective implementation requires clearly defined roles:

• A central function (e.g., Sustainability Manager)
• Cross-functional responsibilities (e.g., procurement, production, controlling)
• Regular steering committees for decision-making and alignment
  

Missing roles and structures are among the biggest challenges - especially in data collection and CSRD implementation.

Change management & acceptance

Sustainability is a transformation process. Communication, training, and transparent goals help involve employees and build internal acceptance. Implementation becomes truly effective only when teams understand why the data matters and how they contribute.

Step 5: Plan Measures & Implementation

• Project planning & roadmap: A roadmap defines key measures, responsibilities, resources, and milestones. This turns the strategy into a concrete implementation plan.‍
• Integration into existing processes: Measures should be embedded into existing workflows—for example in procurement, production, controlling, or product development. This creates efficiency and prevents siloed solutions.‍
• Tools & software solutions (e.g., Tanso): Digital solutions simplify data collection, management, and reporting. Tanso provides a comprehensive software platform for CO₂ management, ESG reporting, and supplier management, including automated workflows and high data quality.

Step 6: Monitoring & Reporting

KPI tracking & data quality

Regular monitoring ensures that set goals are being achieved. This requires reliable KPIs, clean data, and clear responsibilities. High data quality is essential—especially for CSRD and ESG requirements.

Sustainability reporting (CSRD-compliant)

Companies must document their progress transparently and in an audit-proof manner. The CSRD requires structured reports, traceable methodologies, and robust evidence. Unified data sources and digital tools significantly simplify this process.

Feedback mechanisms & steering

Results should be reviewed regularly and shared with relevant teams. Feedback loops help adjust measures, revise priorities, and continuously steer the sustainability strategy.

Step 7: Further develop the strategy

Iteration & learning

A sustainability strategy is not a static document. Companies should regularly assess which measures are effective, where obstacles arise, and which areas need refinement.

Responding to external changes (e.g., regulatory updates)

Regulations such as CSRD, ESRS, or the EU Taxonomy evolve continuously. Companies need to remain flexible and adapt their strategy to new requirements, market expectations, or emerging risks.

Innovation and adaptability

New technologies, sustainable materials, or more efficient processes offer opportunities for improvement. Those who remain open to innovation and proactively shape adjustments will stay competitive in the long term and reduce risks early on.

Examples: How companies approach sustainability strategically

• Nexans autoelectric: An automotive supplier that aims to understand the impact of materials and supply chains on its carbon footprint as part of a comprehensive sustainability strategy. With Tanso, more than 100,000 procurement data points are processed automatically, purchasing categories are analyzed, and concrete CO₂ reduction potentials are identified.‍
• Heroal: A metal processing company that uses Tanso to introduce digital, scalable carbon accounting. The result: around 50% time savings in the second reporting year and detailed insights into the distribution of emissions across suppliers, product groups, and material categories.

What can you take away for your own sustainability strategy?

• Clearly validated climate targets (e.g., SBTi) provide direction and credibility.
• The supply chain and Scope 3 are key levers. Suppliers must be actively involved.
• Digital tools like Tanso simplify operationalization - from data collection and hotspot analysis to reporting and deriving actions.

FAQ: Frequently asked questions about sustainability strategies

What is a sustainability strategy?

A sustainability strategy defines how a company systematically pursues environmental, social, and economic goals. It includes analysis, goals, measures, KPIs, responsibilities, and reporting. Most importantly, it aligns the entire organization with sustainable business practices in the long term.

What types of strategies exist?

Companies typically use a combination of three strategy types:

• Efficiency strategy: Reducing resource consumption (e.g., energy, materials, waste).
• Consistency strategy: Using sustainable products, materials, and technologies.
• Sufficiency strategy: Rethinking processes fundamentally to minimize emissions and impacts.
  

In practice, these approaches are often combined into roadmaps and action plans.

How do I get started as an SME?

SMEs should take a pragmatic approach by starting with:

• Materiality analysis: Which topics are truly relevant to the company?
• Clear goals & KPIs: e.g., energy consumption, CO₂ emissions, supply chain transparency.
• Initial measures: Focus on quick wins such as energy efficiency or data transparency.
• Digital tools: Software like Tanso simplifies data collection, monitoring, and CSRD compliance—especially for industrial companies.
  

Important: Small steps are enough as long as they are structured and repeatable.

Difference compared to CSR?

CSR (Corporate Social Responsibility) traditionally focused on voluntary, often reputation-driven activities. Sustainability strategies go much further: they are strategic, measurable, regulatory requirements (e.g., CSRD), and firmly integrated into corporate management.