What exactly should and can companies do to assess their sustainability and understand where change is needed? To date, there is no comprehensive definition of this concept, although an attempt has been made at European level with the “taxonomy”. However, there can be no uniform definition, as companies and their sustainability performance differ greatly depending on their size, their sector, their often global supply chain and also the values held by observers.
It should be borne in mind that a company must be considered in terms of its internal processes (office equipment, canteen, energy efficiency of the building) on the one hand, and in terms of production (origin of raw materials or goods, C02 emissions) on the other hand. These are therefore two very different tasks.
The first question to ask is whether a company can be sustainable or not. An organic farm that operates according to the principles of the circular economy can be sustainable. But can an industrial company or a service company be sustainable? How can an insurance company, for example, design its financial products sustainably?
A simple explanation of sustainability is the principle of resource neutrality. This means that resources are only consumed to the extent that they can be regenerated. If one thinks of material raw materials (such as wood, sand or steel), but also of human labour (and thus of motivation, health, working atmosphere and work-life balance), one may be sceptical as to whether this is possible.
Is a textile company only allowed to process as much cotton as can grow back? Can electronics manufacturers produce in such a way that they do not release more waste and toxins into the environment than those that can be degraded? And what happens to the products at the end of their life? Can a car manufacturer organize its supply chain in a way that people do not have to work more than is good and healthy for them? Can a farmer grow in a way that does not take nutrients out of the soil, but maybe even replenishes it?
Theoretically, companies can act in a resource-neutral way. Apart from organic farmers, almost no industry seems to have found a comprehensive and fair solution so far. But they are aware of this and are trying, with varying degrees of effort, to reduce their ecological footprint. At least they are trying to become a responsible company.
The most common practice is Corporate Social Responsibility (CSR). A company that practices CSR strives to have a positive impact on society and respect the environment while being economically viable. A balance that it will build with the help of its stakeholders, i.e. its employees, customers, suppliers, shareholders or local actors.
Companies that commit to implementation will therefore voluntarily integrate these dimensions beyond the legal framework imposed on them, by implementing good practices or even opening up to new economic models. For some companies, especially those whose activities have a major impact on the environment, such as for example the mining or oil industries, this means that they will have to rethink their business model to make it compatible with the fight against climate change and with the protection of biodiversity.
The others are trying to move towards resource neutrality in production and are trying to contribute to sustainable development as a whole. In the event a company adopts these goals, it usually bases the implementation of these goals on the impact of the measures in the three areas of environment, society and governance. All these impacts are summarised in the so-called ESG criteria (for environment, society and governance). Read more here.
The Luxembourg Sustainable Business Principles, created by the Chamber of Commerce in 2021, are intended to mobilise companies in the Grand Duchy around sustainable development and to propose a common and unifying course for 2030 for this major strategic subject.
Since January 2020, Bâloise Assurances Luxembourg and Etika have been working together in three main areas. Firstly, we act as an internal consultant on sustainability issues in order to offer suggestions for improvement concerning a more sustainable and responsible way of working. In addition, Baloise employees will be made more aware to the issue of sustainability through training courses and conferences. Finally, our association supports Baloise in the development of ethical insurance products that meet the needs of new consumer concerns, including the new “Switch Plan” product, the country´s first sustainable life insurance.