Businesses today face a continuous stream of disruption. Geopolitical tensions. Armed conflicts. Inflation. Supply chain interruptions. Cyber attacks. Artificial intelligence. Climate related events. Rapid regulatory change. Changing customer expectations.

The military coined the term VUCA to describe environments characterised by Volatility, Uncertainty, Complexity and Ambiguity. Today it perfectly describes the operating environment faced by organisations across every sector.

The question is no longer whether disruption will occur.

The question is whether organisations will be prepared when it does.

Resilience Is Built Before It Is Needed

Many organisations only begin thinking seriously about resilience after a crisis occurs.

By then it is often too late.

True resilience is developed long before disruption appears. It is built into strategy, governance, decision making and organisational capability.

As the saying goes:

Wisdom is avoiding situations where wisdom is needed.

Resilient organisations continuously strengthen themselves while conditions are relatively stable.

Compliance Alone Does Not Build Resilience

Many organisations continue to view sustainability reporting primarily as a compliance exercise.

This is a missed opportunity.

The real purpose of sustainability information is not simply to produce better reports.

It is to enable better decisions.

Decision useful sustainability information helps senior decision makers understand where significant impacts, risks and opportunities exist across the value chain. It enables organisations to allocate resources more effectively, redesign operations, strengthen supplier relationships, improve governance and identify opportunities for innovation.

Reporting should therefore become a strategic management tool rather than an administrative obligation.

Understanding the Entire Value Chain

Disruption rarely remains inside organisational boundaries.

Suppliers fail.

Transport routes become unavailable.

Critical materials become scarce.

Customer expectations evolve.

Regulation changes.

Technology transforms markets.

Organisations therefore need visibility across their entire value chain rather than focusing only on internal operations.

Understanding impacts, risks and opportunities throughout the value chain allows organisations to identify vulnerabilities before they become major problems.

It also reveals opportunities that competitors may overlook.

Better Judgement Creates Competitive Advantage

Artificial intelligence is changing how organisations analyse information.

However, technology alone does not create resilience.

Data does not make decisions.

People do.

Organisations that consistently make better strategic decisions will outperform organisations that simply collect more information.

The quality of judgement remains one of the greatest competitive advantages available.

Building Internal Capability

External consultants can provide valuable expertise.

However, organisations become truly resilient when capability exists internally.

People throughout the organisation need to understand how sustainability information supports strategic decisions, operational improvements and long term value creation.

Professional education helps organisations develop this capability while strengthening governance and reducing dependence on external support.

Knowledge remains one of the most resilient investments an organisation can make.

From Reporting to Action

Resilience does not come from producing more reports.

It comes from acting on the information they contain.

Every material impact, risk and opportunity should lead naturally to questions such as:

• What decision should we make?
• What action should we take?
• Who is responsible?
• When should this happen?
• How will success be measured?

Only then does sustainability reporting become a genuine management system rather than a reporting exercise.

The Organisations That Will Thrive

The organisations that succeed over the next decade will not necessarily be the largest.

Nor will they simply be those with the biggest sustainability teams or the most sophisticated technology.

They will be organisations that consistently make better decisions in uncertain environments.

They will anticipate change rather than merely react to it.

They will build capability before disruption arrives.

They will understand their value chains.

They will use sustainability information to strengthen resilience, improve competitiveness and create lasting value for the business, stakeholders and the planet.

In a VUCA world, resilience is no longer optional.

It is becoming one of the defining characteristics of successful organisations.

Simon Pitsillides
Simon Pitsillides is a board adviser specialising in sustainability governance, corporate reporting, strategy and stakeholder value creation. He supports boards and senior executives in strengthening governance, enhancing decision-making and integrating sustainability into long-term business strategy.
Simon is a Fellow of the Chartered Institute of Marketing (FCIM), a Fellow of the Institute of Sustainability and Environmental Professionals (FISEP), a Chartered Marketer, and holds an MBA in Marketing. He is also a GRI and ISEP Certified Trainer.
As Founder of FBRH Consultants and publisher of SustainCase, Simon combines strategic, commercial and governance expertise with extensive international experience in sustainability reporting, assurance readiness and value creation. He has worked with multinational organisations, financial institutions and public sector bodies across Europe, the Middle East and beyond.
Simon is recognised for helping boards move beyond compliance by using decision-useful sustainability information to strengthen strategy, manage risk, build stakeholder confidence and create long-term value for business, stakeholders and the planet. 

https://www.linkedin.com/in/simon-pitsillides

References

Bennett, N. and Lemoine, G.J. (2014) ‘What VUCA really means for you’, Harvard Business Review, 92(1–2), pp. 27–42.

Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2017) Enterprise Risk Management: Integrating with Strategy and Performance. Durham, NC: COSO.

Deloitte (2024) 2024 Global Resilience Report. London: Deloitte.

European Commission (2023) Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU as regards sustainability reporting standards. Official Journal of the European Union.

International Organization for Standardization (ISO) (2018) ISO 31000:2018 Risk Management – Guidelines. Geneva: ISO.

Kaplan, R.S. and Norton, D.P. (2008) The Execution Premium: Linking Strategy to Operations for Competitive Advantage. Boston: Harvard Business Press.

McKinsey & Company (2021) The Resilience Imperative: Succeeding in Uncertain Times. Available at: https://www.mckinsey.com (Accessed: 4 August 2026).

Nassim Nicholas Taleb (2012) Antifragile: Things That Gain from Disorder. New York: Random House.

Porter, M.E. and Kramer, M.R. (2011) ‘Creating shared value’, Harvard Business Review, 89(1–2), pp. 62–77.

Porter, M.E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.

World Economic Forum (2025) The Global Risks Report 2025. Geneva: World Economic Forum.

Global Reporting Initiative (2021) GRI Universal Standards 2021. Amsterdam: Global Reporting Initiative.

International Sustainability Standards Board (2023) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. London: IFRS Foundation.

International Sustainability Standards Board (2023) IFRS S2 Climate-related Disclosures. London: IFRS Foundation.

World Business Council for Sustainable Development (2021) Vision 2050: Time to Transform. Geneva: WBCSD.

The post Building Resilience in a VUCA World appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2023-2024 PRB Self-Assessment Report by Innovation FCU prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 5: Governance & Culture
  • 5.2 Promoting a culture of responsible banking
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How Innovation FCU promotes a culture of responsible banking among its employees appeared first on SustainCase - Sustainability Magazine.

Sustainability information is not the final product

Most organisations have become better at collecting sustainability data.

They measure emissions, workforce indicators, resource use, supply-chain performance, human rights concerns and exposure to environmental and social change. They publish reports, complete questionnaires and respond to regulatory requirements.

This work is necessary. But it is not sufficient.

A sustainability report may show that a significant impact or risk exists. It does not automatically tell the board, chief executive, chief financial officer, procurement director or operations team what decision must be taken.

That is where the mandate of the sustainability professional must expand.

The objective should not be to place more information in front of senior decision-makers. It should be to help them make better decisions.

From reporting function to decision-making function

The sustainability function should become an internal decision-support capability.

Its responsibility is to connect:

Impact and risk evidence → business implications → strategic choices → accountable decisions → measurable outcomes

This requires sustainability professionals to move beyond describing what is happening and answer five practical questions:

1. Where in the value chain is the issue occurring?
2. Why is it significant for people, the environment or the business?
3. Which operational, commercial or strategic decision does it affect?
4. What credible options are available to management?
5. Who has the authority and resources to act?

Without this translation, materiality assessments can become sophisticated inventories rather than instruments of management.

The standards provide the evidence base

The major sustainability reporting frameworks already point organisations towards decision-relevant information.

The GRI Standards help organisations identify and report their most significant impacts on the economy, environment and people, including human rights impacts. It also acts as an umbrella framework as it addresses every aspect of sustainability and all stakeholders (not just the investor).

The European Sustainability Reporting Standards, or ESRS, require companies to identify material impacts, risks and opportunities using double materiality. ESRS also asks organisations to consider where these matters are concentrated within the business model, their own operations and the upstream and downstream value chain.

IFRS S1, issued by the International Sustainability Standards Board, focuses on sustainability-related risks and opportunities that could reasonably affect cash flows, access to finance or the cost of capital over the short, medium or long term.

These frameworks approach materiality from different but complementary perspectives:

• GRI Standards: What significant impacts does the organisation have on people, the environment and the economy?
• ESRS and Double Materiality: How does the organisation affect society and the environment, and how do sustainability matters affect the organisation?
• ISSB Standards: Which sustainability-related risks and opportunities could affect enterprise prospects and investor decisions?

They provide the basis for reliable analysis. The sustainability professional must turn that analysis into a management agenda.

The value-chain decision matrix

A useful decision matrix should map every significant impact, risk and opportunity against the part of the value chain where it arises.

The matrix should not be treated as another disclosure schedule. It should be used in investment committees, strategy reviews, procurement decisions, product-development processes and operational planning.

How do you put together a value chain decision making matrix? Join the FBRH GRI Reporting Programme:

From Understanding to Implementation – Complete 4 courses and the GRI Certification exam to become a GRI Certified Sustainability Professional and learn how to turn sustainability reporting into strategic decision-making.

What makes an issue decision-ready?

A material issue becomes decision-ready when management can see:

1. The location

Where does the impact, risk or opportunity arise?

This may be within the company’s own operations, but it may also sit several tiers upstream, during customer use or at the end of a product’s life.

2. The significance

How severe or financially material is the issue?

For impacts, the organisation should consider factors such as scale, scope, irremediability and likelihood. For risks and opportunities, it should consider the potential effect on revenue, costs, assets, liabilities, financing, reputation and strategic resilience.

3. The transmission mechanism

How could the sustainability matter affect the business?

For example:

• water scarcity may restrict production;
• poor labour conditions may interrupt supply;
• product inefficiency may weaken customer demand;
• ecosystem degradation may reduce raw-material availability;
• stronger workforce practices may improve productivity and retention;
• circular design may reduce input costs and create new revenue streams.

4. The available choices

Senior leaders need options, not just warnings.

The sustainability professional should distinguish between choices such as:

• avoid the activity;
• reduce or redesign the impact;
• change the supplier, location, material or process;
• collaborate with business partners;
• invest in adaptation or resilience;
• develop a new product or service;
• accept and monitor the exposure; or
• exit the relevant market or activity.

5. The decision owner

Sustainability issues rarely belong solely to the sustainability department.

The owner may be the CFO, COO, procurement director, chief risk officer, product director, human resources director or business-unit leader.

The sustainability function should provide analysis, challenge and coordination. Operational executives must own the decisions and outcomes.

Questions senior decision-makers should be asking

Questions about value-chain configuration

• How can we reconfigure the value chain to create better value for the business, stakeholders and the planet?
• Which stages of the value chain contain our most severe impacts and most material financial exposures?
• Are we sourcing from the right suppliers, regions and production systems?
• Which impacts could be reduced through changes in product design rather than downstream remediation?
• Where are we transferring costs or risks to workers, communities, customers or ecosystems?
• Which activities should we develop internally, influence through partnerships or discontinue?

Questions about strategy and capital allocation

• Which sustainability risks could materially affect revenue, operating costs, assets, access to finance or cost of capital?
• Does our current capital-allocation process reflect these exposures?
• Which investments can simultaneously reduce negative impacts, improve resilience and strengthen commercial performance?
• Which assets, technologies or business models could become less viable?
• What opportunities could arise from solving a material stakeholder or environmental problem?
• What is the cost of acting now compared with the cost of delay?

Questions about products and markets

• Does the product create more value during its lifecycle than the social and environmental costs it generates?
• Can we redesign the product to use fewer scarce resources, last longer or deliver better customer outcomes?
• Are changing regulations, stakeholder expectations or physical conditions likely to alter demand?
• Could repair, reuse, remanufacturing or service-based models create new revenue?
• Which customer needs are emerging as sustainability conditions change?

Questions about suppliers and business relationships

• Do purchasing practices contribute to the impacts identified in our supply chain?
• Are our price, lead-time and contract requirements consistent with responsible supplier performance?
• Which suppliers require development, collaboration, closer oversight or replacement?
• Where do we lack sufficient visibility beyond tier-one suppliers?
• Could long-term commercial agreements unlock investment in lower-impact production?

Questions about governance and accountability

• Who is accountable for each significant impact, risk and opportunity?
• Which decisions require board approval, and which belong to executive or operational management?
• Are incentives aligned with the outcomes the organisation says it wants?
• What information must management receive before approving a major investment, acquisition, supplier or product?
• How will we know whether an intervention has changed the underlying impact or merely improved the reported indicator?

A materiality assessment should produce a decision agenda

A double materiality assessment should not conclude with a list of material topics.

It should produce:

• a map of significant impacts, risks and opportunities;
• a clear view of where they occur across the value chain;
• an explanation of their strategic and financial relevance;
• a set of decisions requiring management attention;
• named decision owners;
• timescales and resource requirements;
• performance indicators; and
• escalation thresholds for the executive team and board.

The final output should resemble a portfolio of strategic decisions, not a reporting index.

The sustainability professional’s new mandate

The mandate can be stated clearly:

Identify the organisation’s significant impacts, risks and opportunities; translate them into their consequences for stakeholders, enterprise value and resilience; and present senior decision-makers with clear choices across the value chain.

This does not weaken the importance of reporting or compliance.

Reliable reporting remains essential. It establishes discipline, transparency, comparability and accountability. Assurance strengthens confidence in the information and the systems that produce it.

But reporting should be the visible output of a deeper management process. It should show the consequences of decisions already embedded in strategy, governance, capital allocation and operations.

From material information to material action

Sustainability creates value when it changes a real decision.

That decision may involve:

• redesigning a product;
• altering a procurement specification;
• changing a supplier relationship;
• reallocating capital;
• protecting a vulnerable workforce;
• strengthening an asset against physical risk;
• entering a new market;
• withdrawing from a damaging activity; or
• changing how value is distributed across the value chain.

The sustainability professional should therefore be assessed not only on the quality of the organisation’s disclosures, but also on whether material sustainability evidence reaches the right decision-maker at the right time and changes the quality of the decision.

From insight to implementation

SustainCase case studies and analysis can help organisations understand how sustainability impacts, risks and opportunities influence business models and value chains.

If you want to apply this in practice, FBRH’s GRI and ESRS courses and webinars can help teams build the technical competence required to identify material matters, connect them to management decisions and establish credible reporting processes. The FBRH independent assurance services can then test whether the underlying systems, evidence and disclosures are sufficiently robust.

The objective is not more sustainability information.

It is better governed, better evidenced and better executed business decisions.

Professional call to action

Review your latest materiality assessment and ask one question:

For every significant impact, risk and opportunity, have we identified the specific decision that a senior leader must take?

Where the answer is no, the sustainability process is not yet complete.

Simon Pitsillides
Simon Pitsillides is a board adviser specialising in sustainability governance, corporate reporting, strategy and stakeholder value creation. He supports boards and senior executives in strengthening governance, enhancing decision-making and integrating sustainability into long-term business strategy.
Simon is a Fellow of the Chartered Institute of Marketing (FCIM), a Fellow of the Institute of Sustainability and Environmental Professionals (FISEP), a Chartered Marketer, and holds an MBA in Marketing. He is also a GRI and ISEP Certified Trainer.
As Founder of FBRH Consultants and publisher of SustainCase, Simon combines strategic, commercial and governance expertise with extensive international experience in sustainability reporting, assurance readiness and value creation. He has worked with multinational organisations, financial institutions and public sector bodies across Europe, the Middle East and beyond.
Simon is recognised for helping boards move beyond compliance by using decision-useful sustainability information to strengthen strategy, manage risk, build stakeholder confidence and create long-term value for business, stakeholders and the planet. 

https://www.linkedin.com/in/simon-pitsillides

References

Committee of Sponsoring Organizations of the Treadway Commission and World Business Council for Sustainable Development (COSO and WBCSD) (2018) Enterprise risk management: Applying enterprise risk management to environmental, social and governance-related risks. Geneva: World Business Council for Sustainable Development. Available at: https://www.wbcsd.org/resources/applying-enterprise-risk-management-to-environmental-social-and-governance-related-risks/ (Accessed: 29 July 2026).

Eccles, R.G., Ioannou, I. and Serafeim, G. (2014) ‘The impact of corporate sustainability on organizational processes and performance’, Management Science, 60(11), pp. 2835–2857. doi: 10.1287/mnsc.2014.1984.

European Commission (2023) Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU as regards sustainability reporting standards. Official Journal of the European Union, 22 December. Available at: https://eur-lex.europa.eu/eli/reg_del/2023/2772/oj/eng (Accessed: 29 July 2026).

Global Reporting Initiative (2021a) GRI 1: Foundation 2021. Amsterdam: Global Reporting Initiative. Available at: https://www.globalreporting.org/publications/documents/english/gri-1-foundation-2021/ (Accessed: 29 July 2026).

Global Reporting Initiative (2021b) GRI 3: Material Topics 2021. Amsterdam: Global Reporting Initiative. Available at: https://www.globalreporting.org/publications/documents/english/gri-3-material-topics-2021/ (Accessed: 29 July 2026).

IFRS Foundation (2023) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. London: IFRS Foundation. Available at: https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/ (Accessed: 29 July 2026).

International Organization for Standardization (2010) ISO 26000:2010 Guidance on social responsibility. Geneva: International Organization for Standardization.

International Organization for Standardization (2018) ISO 31000:2018 Risk management—Guidelines. Geneva: International Organization for Standardization.

Khan, M., Serafeim, G. and Yoon, A. (2016) ‘Corporate sustainability: First evidence on materiality’, The Accounting Review, 91(6), pp. 1697–1724. doi: 10.2308/accr-51383.

Organisation for Economic Co-operation and Development (OECD) (2018) OECD Due Diligence Guidance for Responsible Business Conduct. Paris: OECD Publishing. doi: 10.1787/15f5f4b3-en.

Organisation for Economic Co-operation and Development (OECD) (2023) OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Paris: OECD Publishing. doi: 10.1787/81f92357-en.

United Nations (2011) Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework. New York and Geneva: United Nations. Available at: https://www.ohchr.org/sites/default/files/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf (Accessed: 29 July 2026).

The post Are some Sustainability Teams Missing the Point? Reporting Is Not the Outcome. appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2025 PRB Responsible Banking Progress Statement by iM Financial Group prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 3: Clients and Customers
  • 3.2 Business opportunities
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How iM Financial Group identifies and works on strategic business opportunities to increase positive and reduce negative impacts appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2024 ESG Supplementary Index by Itaú Unibanco prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 5: Governance & Culture
  • 5.2 Promoting a culture of responsible banking
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How Itaú Unibanco promotes a culture of responsible banking among its employees appeared first on SustainCase - Sustainability Magazine.

Artificial intelligence is transforming almost every profession. It writes reports, analyses data, summarises meetings, generates presentations and answers questions in seconds. Tasks that once required hours can now be completed in minutes.

Many organisations therefore assume that adopting more AI will automatically make them more competitive.

That assumption deserves closer examination.

AI is democratising knowledge

Throughout history, access to information has often created competitive advantage.

Today, AI is changing that equation.

The same large language models are increasingly available to almost everyone. Large corporations, small businesses, consultants and students can often access remarkably similar capabilities.

As AI becomes widely available, technology itself becomes less of a differentiator.

The real differentiator shifts elsewhere.

Information is not the same as judgement

AI can provide information.

It can identify patterns.

It can explain concepts.

It can generate options.

What it cannot do is accept responsibility for deciding which option is right in a particular context.

Judgement requires something fundamentally human.

It requires understanding objectives.

It requires balancing competing interests.

It requires recognising uncertainty.

It requires experience.

It requires ethics.

It requires accountability.

These qualities remain difficult to automate because they depend on context rather than computation.

Sustainability demonstrates the difference

The sustainability profession provides an excellent example.

An AI system can quickly summarise the GRI Standards.

It can explain IFRS Sustainability Disclosure Standards.

It can compare reporting frameworks.

It can draft disclosures.

None of these activities determines what is actually material for an organisation.

Materiality requires professional judgement.

Evidence must be evaluated.

Stakeholders must be considered appropriately.

Subject matter experts may need to be consulted.

Impacts, risks and opportunities must be assessed.

Trade offs must be understood.

Decisions must be made.

AI can support every one of these activities.

It should not replace the judgement behind them.

The danger is not AI. It is intellectual complacency.

The greatest risk may not be that AI replaces people.

The greater risk is that people gradually stop thinking as deeply because AI produces answers so quickly.

If every recommendation is accepted without challenge, critical thinking begins to weaken.

Questions become less probing.

Alternative perspectives receive less attention.

Assumptions go untested.

Organisations may become more efficient while simultaneously becoming less thoughtful.

That is a dangerous combination.

Better questions produce better decisions

One of the most valuable skills in an AI enabled organisation is asking better questions.

Instead of asking:

“Write me a sustainability strategy.”

Leaders might ask:

What assumptions underpin this recommendation?

What evidence contradicts this conclusion?

Which stakeholders might see this differently?

What unintended consequences should we consider?

What are we missing?

AI often improves dramatically when humans improve the quality of their questions.

Boards face a new responsibility

Boards should not simply ask whether management is using AI.

They should ask whether AI is improving judgement or merely increasing activity.

Important questions include:

Is AI helping us identify better opportunities?

Is it improving our understanding of significant impacts, risks and opportunities?

Are important decisions still being challenged?

Do we understand where AI may be wrong?

Who remains accountable for the final decision?

These questions focus attention where it belongs.

Not on technology itself.

But on governance.

The future belongs to organisations that think well

AI will undoubtedly become part of everyday business.

That is unlikely to be the source of lasting competitive advantage because competitors can adopt similar tools.

Lasting advantage will come from combining AI with human capabilities that are much harder to replicate.

Curiosity.

Professional judgement.

Ethics.

Experience.

Critical thinking.

The ability to navigate uncertainty.

These qualities determine whether information becomes knowledge and whether knowledge becomes wise decisions.

A practical implication for sustainability professionals

The role of sustainability professionals is evolving.

Success will depend less on producing reports and more on enabling better decisions.

That means strengthening materiality processes.

Improving evidence quality.

Engaging stakeholders appropriately.

Understanding significant impacts, risks and opportunities across the value chain.

Providing decision useful sustainability information that creates lasting value for organisations, stakeholders and the planet.

AI can accelerate much of this work.

It cannot replace the professional judgement that gives it meaning.

Final thought

Artificial intelligence is changing how organisations work.

It is not changing what ultimately determines success.

Technology can generate information.

Only good judgement turns information into better decisions.

And better decisions remain one of the few competitive advantages that competitors cannot easily copy.

Simon Pitsillides
Simon Pitsillides is a board adviser specialising in sustainability governance, corporate reporting, strategy and stakeholder value creation. He supports boards and senior executives in strengthening governance, enhancing decision-making and integrating sustainability into long-term business strategy.
Simon is a Fellow of the Chartered Institute of Marketing (FCIM), a Fellow of the Institute of Sustainability and Environmental Professionals (FISEP), a Chartered Marketer, and holds an MBA in Marketing. He is also a GRI and ISEP Certified Trainer.
As Founder of FBRH Consultants and publisher of SustainCase, Simon combines strategic, commercial and governance expertise with extensive international experience in sustainability reporting, assurance readiness and value creation. He has worked with multinational organisations, financial institutions and public sector bodies across Europe, the Middle East and beyond.
Simon is recognised for helping boards move beyond compliance by using decision-useful sustainability information to strengthen strategy, manage risk, build stakeholder confidence and create long-term value for business, stakeholders and the planet.

https://www.linkedin.com/in/simon-pitsillides

The post In the Age of AI, Competitive Advantage Belongs to Better Judgement appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2024 PRB Reporting and Self-Assessment Template by Hua Xia Bank prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 5: Governance & Culture
  • 5.2 Promoting a culture of responsible banking
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How Hua Xia Bank promotes a culture of responsible banking among its employees appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2024 PRB Reporting and Self-Assessment Template by Hana Financial Group prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 5: Governance & Culture
  • 5.2 Promoting a culture of responsible banking
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How Hana Financial Group promotes a culture of responsible banking among its employees appeared first on SustainCase - Sustainability Magazine.

They are collecting data, assessing impacts, responding to reporting requirements, engaging stakeholders and preparing increasingly detailed disclosures.

Yet a fundamental question is often overlooked:

Is this information actually improving decisions?

Too often, sustainability information is treated primarily as an output. It is gathered for a report, requested by regulators, reviewed by external advisers or presented to senior management after important decisions have already been made.

The result may be a technically complete report, but not necessarily a better-run organisation.

The purpose of sustainability information should not simply be to produce better reports.

It should be to enable better decisions.

This principle is already reflected in leading international standards. The GRI Standards enable organisations to report transparently on their most significant impacts on the economy, environment and people, while the IFRS Sustainability Disclosure Standards focus on information that is useful to investors when assessing sustainability-related risks and opportunities that could affect an organisation’s prospects (GRI, 2021a; IFRS Foundation, 2023a). (Global Reporting Initiative)

Together, these perspectives underline an important point: sustainability information should support both accountability for organisational impacts and informed economic decision-making.

From Reporting to Decision-Making

Decision-useful sustainability information helps leaders understand:

• what matters most
• where the organisation has its most significant impacts
• which risks and opportunities require attention
• where the organisation is most vulnerable
• what is changing across its value chain
• where management attention and resources should be directed
• how the organisation can adapt and continue creating value

This requires more than collecting data.

It requires organisations to connect sustainability information with strategy, governance, investment, risk management, operations and accountability.

IFRS S1 reflects this connection by organising sustainability-related disclosures around governance, strategy, risk management, and metrics and targets. It requires organisations to communicate the sustainability-related risks and opportunities that could reasonably be expected to affect their prospects over the short, medium and long term (IFRS Foundation, 2023a). (IFRS)

When properly used, sustainability information can support decisions about:

• products and services
• supply chains
• capital allocation
• market entry
• operational priorities
• workforce planning
• stakeholder relationships
• risk management
• innovation
• long-term strategy

In other words, sustainability information becomes useful when it helps decision-makers determine what to do next.

Transparency Still Matters

This is not an argument against transparency.

Organisations have a responsibility to provide clear, balanced and credible information about their impacts, risks, opportunities and performance.

Transparency strengthens accountability. It enables investors, customers, employees, regulators, communities and other stakeholders to make more informed assessments of an organisation’s conduct and performance.

It can also build trust and reduce the risk of selective, exaggerated or misleading disclosure.

The GRI Standards are explicitly designed to enable organisations to report publicly on their most significant impacts, including positive and negative impacts on the economy, environment and people. They also recognise stakeholder engagement and due diligence as important elements in identifying those impacts (GRI, 2021a; GRI, 2021b). (Global Reporting Initiative)

The G20/OECD Principles of Corporate Governance similarly emphasise the importance of timely, reliable and comparable disclosure in supporting market confidence and informed decision-making (OECD, 2023). (OECD)

But transparency should not be treated as the final objective.

The real value of sustainability information is realised when it also improves governance, informs strategy, strengthens resilience and leads to better decisions and action.

Reporting should therefore serve two connected purposes:

accountability to those affected by or relying on the organisation, and better decision-making within the organisation itself.

Transparency without action may produce visibility but little improvement.

Decision-making without transparency may produce action but insufficient accountability.

Strong sustainability reporting should contribute to both.

Stronger Information Builds Stronger Resilience

Organisations are operating in an increasingly uncertain environment.

Climate impacts, geopolitical disruption, regulatory change, supply-chain instability, technological development, demographic pressures and changing customer expectations are reshaping markets and business models.

Resilience is not simply the ability to survive a crisis.

It is the ability to understand change, anticipate material consequences, adapt intelligently and continue creating value under changing conditions.

The 2023 G20/OECD Principles of Corporate Governance introduced a dedicated chapter on sustainability and resilience. The Principles recognise that governance arrangements should enable companies and investors to consider sustainability-related risks and opportunities and support the resilience of corporations and the wider economy (OECD, 2023). (OECD)

They also state that boards should ensure material sustainability matters are considered and that adequate risk-management processes are in place to address significant external risks, including supply-chain disruptions and geopolitical tensions (OECD, 2023). (OECD)

That requires reliable information.

An organisation cannot strengthen its resilience if it does not understand:

• where it is exposed
• what it depends on
• how its value chain may be affected
• which stakeholders are critical to its success
• where opportunities may be emerging
• how present decisions could affect future performance
• how environmental and social changes could influence its ability to operate

Decision-useful sustainability information allows organisations to identify these matters before they become more disruptive, costly or difficult to manage.

It gives boards and senior leaders a stronger basis for strategic adaptation.

Materiality Must Support Judgement

Materiality is central to this process.

However, materiality should not become a popularity exercise, a box-ticking process or a mechanical compliance task.

The purpose of materiality is to identify the sustainability matters that genuinely require attention, informed judgement and organisational action.

Under the GRI Standards, material topics are those representing an organisation’s most significant impacts on the economy, environment and people, including impacts on human rights. These impacts may arise through the organisation’s own activities or through its business relationships (GRI, 2021a; GRI, 2021b). (Global Reporting Initiative)

From a financial materiality perspective, IFRS S1 focuses on sustainability-related risks and opportunities that could reasonably be expected to affect an organisation’s cash flows, access to finance or cost of capital over the short, medium or long term (IFRS Foundation, 2023a).

A robust materiality process should therefore examine matters across the value chain and consider factors such as:

• the scale and scope of actual and potential impacts
• the severity and possible irremediability of harm
• financial risks and opportunities
• operational dependencies
• stakeholder evidence
• expert input
• regulatory and market developments
• strategic implications
• the organisation’s ability to respond

Stakeholder engagement is important, but materiality should not be determined by counting votes or selecting the issues mentioned most frequently.

Stakeholder input should provide evidence and insight. It should be assessed alongside operational information, scientific and technical expertise, value-chain analysis, financial considerations and management judgement.

A strong materiality process helps leaders distinguish between what is merely interesting and what is genuinely important.

It reduces noise.

It creates focus.

Most importantly, it should lead to decisions, actions, responsibilities and measurable outcomes.

From Disclosures to Value Creation

The strongest sustainability systems follow a clear path:

Disclosures lead to decisions.
Decisions lead to actions.
Actions lead to value creation.

That value should not be understood narrowly.

It may include:

• improved operational performance
• stronger governance
• better risk management
• increased organisational resilience
• greater stakeholder trust
• improved access to markets
• stronger customer relationships
• more reliable supply chains
• improved access to finance
• increased innovation
• new products, services or partnerships
• better long-term strategic positioning

The IFRS Foundation identifies potential benefits from stronger sustainability-related information in areas including governance, business strategy, access to capital, reputation and stakeholder engagement (IFRS Foundation, 2023b). (IFRS)

Good sustainability decisions should strengthen the organisation while also creating value for its stakeholders and the planet.

These objectives should not automatically be treated as mutually exclusive.

A business cannot create lasting value if it ignores the environmental systems, people, relationships and resources on which it depends.

Equally, sustainability initiatives are unlikely to remain effective if they are disconnected from the organisation’s strategy, operating model and economic viability.

The challenge is to identify practical decisions that create balanced and lasting value.

What Organisations Need

Turning sustainability information into better decisions requires several connected elements.

1. Relevant and credible information

Organisations need information that is sufficiently complete, balanced, consistent and reliable to inform judgement.

Large quantities of data are not necessarily useful. Information must relate to the decisions that leaders, investors and stakeholders need to make.

2. A robust materiality process

Materiality should identify the impacts, risks, opportunities and dependencies that genuinely require organisational attention.

It should provide focus rather than simply produce a long list of sustainability topics.

3. Value-chain understanding

Many significant impacts and business vulnerabilities occur outside an organisation’s direct operations.

Organisations therefore need to understand their upstream and downstream relationships, dependencies and exposures.

4. Clear governance and accountability

Boards, executives, operational managers and subject-matter experts must understand their respective roles.

Someone must be responsible for considering the information, making decisions, authorising action and monitoring progress.

5. Competent people

Organisations need people who can collect, assess, interpret and communicate sustainability information.

Training should not merely explain reporting requirements. It should build the capability to apply them in practice.

6. Reliable systems and evidence

Reporting processes must be capable of producing consistent and traceable information.

The evidence supporting disclosures should be sufficiently robust to withstand internal challenge and, where relevant, external assurance.

7. Independent assurance

Where appropriate, independent assurance can strengthen confidence in sustainability information and the processes used to prepare it.

The International Standard on Sustainability Assurance 5000, or ISSA 5000, provides a global, principles-based standard suitable for assurance engagements across sustainability topics and reporting frameworks. Its purpose includes strengthening trust and confidence in sustainability information among investors, regulators and other stakeholders (IAASB, 2024). (IAASB)

These elements should not operate in isolation.

Training, materiality, governance, reporting and assurance should form part of a wider decision-making system.

The Role of Boards and Senior Leaders

Boards should not receive sustainability information only when a report is ready for approval.

By that stage, many important decisions may already have been made.

Boards should use sustainability information earlier, when strategy, investment, risk appetite and resource-allocation decisions are being considered.

They should ask:

• What does this information tell us about the future of the organisation?
• Which assumptions within our strategy may no longer hold?
• Where are we most exposed?
• What are our most important environmental and social dependencies?
• What opportunities are we failing to recognise?
• Which material matters require investment or management attention?
• What trade-offs are involved?
• How confident are we in the quality of the information?
• What decisions should change as a result?
• Who is responsible for ensuring that action follows?

The G20/OECD Principles recognise that boards should guide corporate strategy, oversee risk management and ensure that material sustainability matters are considered as part of their responsibilities (OECD, 2023). (OECD)

These questions move sustainability from the edge of the reporting process to the centre of governance and strategy.

They also make sustainability information more commercially relevant.

The Role of Chambers and Business Organisations

Chambers of commerce and other business organisations can play an important role in making sustainability capability accessible.

Many businesses, particularly small and medium-sized enterprises, face increasing requests for sustainability information from customers, banks, investors, public authorities and larger companies within their supply chains.

Yet many do not have dedicated sustainability teams or the internal knowledge required to respond efficiently.

Chambers can support their members by providing:

• practical awareness
• credible training
• reporting capability
• access to relevant expertise
• shared learning
• examples of good practice
• structured implementation pathways
• access to independent assurance when appropriate

The objective should not be to surround members with more technical language or reporting complexity.

It should be to help them understand what matters, what is expected, what information they need and how sustainability can strengthen resilience, competitiveness and long-term value.

This also creates an opportunity for Chambers to position themselves as practical partners in business adaptation.

My Focus

This is the work I have increasingly chosen to focus on:

I help organisations turn sustainability information into better decisions, stronger resilience and long-term value.

That involves working with boards, senior leaders, Chambers and business organisations to connect sustainability with governance, strategy, reporting capability and credible assurance.

Training builds internal competence.

Reporting frameworks create structure and comparability.

Materiality creates focus.

Governance establishes responsibility.

Assurance strengthens confidence.

Board-level engagement connects the information to strategy, oversight and accountability.

The aim is not to create more reporting for its own sake.

The aim is to make sustainability information useful:

Useful to the organisation.

Useful to stakeholders.

Useful to investors and other users of reported information.

Useful to those responsible for making decisions.

And useful in creating lasting value for the business, its stakeholders and the planet.

The Real Test

The real test of sustainability information is not simply how much is disclosed.

It is what changes because of it.

Did the board make a better decision?

Did the organisation identify an important risk earlier?

Did it understand a significant impact more clearly?

Did it improve an operational process?

Did it strengthen its supply chain?

Did it allocate resources more intelligently?

Did it improve accountability?

Did it build greater trust?

Did it become more resilient?

Did it create long-term value?

If the answer is no, the organisation may have produced information without fully using it.

Sustainability information should not sit only at the end of the decision-making process.

It should help shape that process.

That is where its real value begins.

I welcome conversations with boards, Chambers and business leaders exploring how sustainability information can become more decision-useful, strengthen organisational resilience and support long-term value creation.

Simon Pitsillides is Founder of FBRH Consultants and publisher of SustainCase. He is a board and senior executive adviser specialising in sustainability governance, corporate reporting, strategy and stakeholder value.

He supports organisations in strengthening governance, improving decision-making and integrating sustainability into long-term business strategy. His work focuses on helping boards and leadership teams move beyond compliance by using decision-useful sustainability information to manage risk, build stakeholder confidence and create lasting value.

Simon is a Fellow of the Chartered Institute of Marketing (FCIM), a Fellow of the Institute of Sustainability and Environmental Professionals (FISEP), a Chartered Marketer, and holds an MBA in Marketing. He is also a GRI and ISEP Certified Trainer.

Through FBRH Consultants and SustainCase, Simon combines strategic, commercial and governance expertise with extensive international experience in sustainability reporting, assurance readiness and value creation. He has worked with multinational organisations, financial institutions and public sector bodies across Europe, the Middle East and beyond.

https://www.linkedin.com/in/simon-pitsillides

References

Global Reporting Initiative (GRI) (2021a) GRI 1: Foundation 2021. Amsterdam: Global Reporting Initiative. Effective for reports or other materials published on or after 1 January 2023. (Global Reporting Initiative)

Global Reporting Initiative (GRI) (2021b) GRI 3: Material Topics 2021. Amsterdam: Global Reporting Initiative. Effective for reports or other materials published on or after 1 January 2023. (Global Reporting Initiative)

International Auditing and Assurance Standards Board (IAASB) (2024) International Standard on Sustainability Assurance 5000: General Requirements for Sustainability Assurance Engagements. New York: International Federation of Accountants. (IAASB)

IFRS Foundation (2023a) IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information. London: IFRS Foundation. (IFRS)

IFRS Foundation (2023b) Introduction to the ISSB and IFRS Sustainability Disclosure Standards. London: IFRS Foundation. (IFRS)

Organisation for Economic Co-operation and Development (OECD) (2023) G20/OECD Principles of Corporate Governance 2023. Paris: OECD Publishing. (OECD)

The post Sustainability Information Is Only Valuable When It Improves Decisions appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2024 PRB Responsible Banking Progress Statement by GSB prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 5: Governance & Culture
  • 5.2 Promoting a culture of responsible banking
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How GSB promotes a culture of responsible banking among its employees appeared first on SustainCase - Sustainability Magazine.