Being more eco-friendly is top-of-mind for many business executives today. After all, with climate change causing major issues around the globe, it’s more important than ever to run as sustainable an operation as possible.
Many companies have environmental goals, but it can be hard to know whether you’re on the right path to achieving them. This is why conducting sustainability audits on a regular basis is so crucial.
A sustainability audit is basically a comprehensive assessment of a company’s operations, policies and procedures that’s meant to identify opportunities for improvement as leaders look to make the organization more sustainable.
The audit will evaluate the environmental impact of all of the company’s activities, assessing its social responsibility practices and reviewing its economic performance.
It will involve many moving parts, including the company’s current operations, how it is using resources, its waste management services and forward-thinking strategy and so much more.
Below, we provide the ultimate guide to conducting a meaningful sustainability audit so you can replicate the process at your company.
Benefits and Requirements of Sustainability Audits
There are many benefits of conducting a sustainability audit.
For some companies, they are essential tasks as part of compliance regulations, such as the Corporate Sustainability Reporting Directive (CSRD). This process, then, helps companies mitigate risks in being out of compliance with whatever legal obligations they have.
Even for those companies that don’t have compliance concerns, there are many reasons why sustainability audits are a good idea.
Today, stakeholders have high expectations when it comes to environmental protection and sustainability. Conducting a sustainability audit will help ensure that your company’s practices align with your stakeholders’ vision in that regard.
Beyond just enhancing brand reputation and value, though, there are tangible things companies can realize through sustainability audits. Since they help companies identify areas for improvement, they naturally lead to greater efficiency and cost savings — something that any company could benefit from.
Preparing for a Sustainability Audit
Before you can actually conduct a sustainability audit, there’s some prep work to be done.
First and foremost, you need to define your audit’s scope. Essentially, you need to decide what sustainability aspects you want the audit to evaluate and measure.
It could be anything from your company’s expectations, goals and standards to more specific areas such as reducing your company’s carbon footprint, improving its waste management practices or improving its social impact.
Next, start gathering the information and resources you’ll need for the audit itself. This includes all data on your environmental impact, social responsibility practices and economic performance.
You’ll also need to lay out who the relevant stakeholders are — such as your suppliers, customers and employees — because it’s important to gather information on what their expectations and concerns are as well.
After all, as mentioned before, you want to ensure that your sustainability goals are in alignment with that of your stakeholders.
Once you’ve collected all the necessary data and information, you need to decide whether you’ll be conducting the audit internally or hiring an outside firm to do it for you. There isn’t necessarily a right or wrong way to do this, only the way that works best for your company.
Conducting a Sustainability Audit
Now it’s time to start conducting the sustainability audit. To ensure that your audit runs smoothly and remains on task at all times, it’s a good idea to create an audit checklist.
This will help your company identify areas for improvement and ensure you are always meeting regulatory requirements and shareholder expectations.
Your checklist should include general overview topics such as best practices in your industry, but then should also drill down into more specific initiatives that your company has.
This can include economic performance, responsibility practices and environmental sustainability. In addition, it can get one step further by helping to define how your company will conserve resources, give back to the environment and the community, engage with employees so they can play their part and so much more.
The sustainability audit checklist will help guide your business on what it needs to do so that there’s never any guesswork.
Key Focus Areas for Sustainability Audits
Sustainability audits should focus on ESG factors — or environmental, social and governance. This includes general overview topics such as environmental sustainability, social responsibility and governance practices.
Some focus areas could include …
- Carbon Footprint: What is your company’s current carbon footprint and how can it be reduced?
- Waste Reduction Efforts: The less waste your company generates, the better impact it has on the environment.
- Renewable Energy: Are there options for switching to some renewable energy sources, such as using electric vehicles, installing solar panels and more?
- Social Responsibility: Does your business engage with employees well and ensure all are well-treated?
- Civic Engagement: Does your business adequately give back to your community?
- Supplier Relationships: Is your business doing enough to promote sustainability with its suppliers as well?
Implementing Sustainability Practices
The completed sustainability audit will produce a report that highlights where things stand now and what needs to be done for the future. While this report is extremely valuable, it won’t help your company reach its goals without a solid plan of action.
All companies need to use the findings from the sustainability audit to implement sustainable practices and improve their ESG standards. This needs to include a development of a general sustainability strategy, as well as specific goals that will help achieve the desired results of the audit.
It’s important at this stage that company leaders work closely with the audit team to get their feedback and comments about the findings, as well as to engage with stakeholders to see if the plan is up to their standards as well.
Overcoming Challenges and Ensuring Continuous Improvement
Simply creating a plan is not enough to ensure that your company achieves its sustainability goals for now and into the future. There are many challenges that you may face in implementing sustainable practices, such as a lack of resources or resistance from certain stakeholders.
However, your company can overcome these challenges with a well-thought-out strategy.
A good place to start is by creating sustainability initiatives that are backed by science and data. This will help to get buy-in from all stakeholders.
Then, once these initiatives are created — and related and measurable KPIs set up for them — you should engage stakeholders to get their full buy-in. When your employees believe in what you’re trying to accomplish, they’re more likely to work hard for you.
It’s also important to provide the proper education and training to everyone involved. This will help them understand the importance of doing what you’re doing, as well as the best practices for putting the theory into practice.
Finally, you need to continuously monitor and evaluate your company’s sustainability performance, measured against the KPIs that you set up. This will allow you to see in real-time whether anything needs to be adjusted so you can achieve your goals.
Best Practices for Sustainability
It’s one thing to say you want to be more sustainable, but how do you know where to start? All companies can learn from best practices in sustainability, such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
You can follow these as a guide on where to start, and then personalize your sustainability plans, and audit, to your company’s specific details.
It’s also important to stay up-to-date with emerging trends in sustainability. This includes the use of blockchain technology and artificial intelligence, both of which can help improve your sustainability performance.
Get Started with Your Sustainability Audit
All companies can benefit from conducting regular sustainability audits.
For some organizations, they are essential to ensure they’re meeting regulatory requirements. For all organizations, they help to ensure they’re meeting stakeholder expectations, which determines whether your business is successful or not.
Sustainability audits will help companies identify areas for improvement, reduce risks and build trust with stakeholders — and will ultimately contribute to a more sustainable future.
At GPS Waste, we know how important it is to create a more sustainable future for all. That’s why we have a different focus at our company — to help our clients not only save money and be more efficient, but to benefit the environment as well.
We offer a free waste assessment to every company so leaders can see the opportunities that exist to achieve cost savings, efficiency and more sustainable measures.To learn more, please contact us today.
