The double bottom line – sustainability defines today’s business

Sustainability has been one of the major trends in the business world for a long time now. It has been a long journey that has involved a number of different paths. Consumers’ sustainability-related expectations of companies have grown stronger. At the same time, employees’ expectations of meaningful work and being part of a sustainable workplace have emerged as an increasingly important dimension of the employee experience. Young people, in particular, demand and drive change towards even more sustainable business activities.

The trend of sustainability has naturally been strengthened by growing awareness and evidence of the impacts of climate change and biodiversity loss on our planet. According to a report on megatrends by the Finnish Innovation Fund Sitra, the key trends that challenge our society include the erosion of nature’s carrying capacity, increasing challenges to well-being and cracks in the foundations of the economy.

Particularly after the financial crisis, business strategies have been characterised by the notion of a double bottom line. It refers to a strategy whereby a company’s goal is to create value for itself and for society at the same time.

Indeed, sustainability is prominently featured on the agenda of Finnish companies. According to a sustainability survey published by the corporate responsibility network FIBS last spring, sustainability has been an integral aspect of business.

The question is not whether sustainability should be regulated, but how it should be regulated

The judicialisation of sustainability can also be considered a long-term trend. The key question is not whether sustainability should be regulated, but rather how it should be regulated. The senior executives and board members of large corporations are now particularly concerned about the initialism CSRD, or the Corporate Sustainability Reporting Directive, which will be adopted gradually starting from 2024 and requires sustainability reporting as part of boards of directors’ annual reporting on operations. The reporting obligations will harmonise disclosures and increase transparency.

Although the regulations and reporting obligations are targeted at large corporations using various criteria related to annual turnover and the number of employees, SMEs will also face increasing questions concerning sustainability in the context of subcontracting, for example. Companies that are within the scope of the reporting obligations must know their value chain, and their sustainability requirements will extend to the value chain.

There are many drivers of sustainability in the operating environments of companies, and it can be difficult for them to focus their actions. Still, the fundamental aspects of corporate responsibility have not changed. Companies need to think about what is relevant and material, they need to listen to their stakeholders and determine what supports their strategy and business. It is crucial to always be familiar with the regulatory framework. Sustainability is not separate from strategy. Sustainability aspects and risk assessments need to be considered as part of a company’s strategy process. The stakeholder engagement and materiality assessments that are at the core of sustainability cannot produce outcomes that are in conflict with the company’s strategy.

We also rely on these principles at Elo. The priorities outlined in the responsibility programme we published last summer – We insure responsibly, We build a humane work life and We invest in the future – are at the core of our business and grounded in our strategy. We apply these priorities as we challenge ourselves with regard to responsibility and keep learning throughout our organisation. 

Learn more about Elo’s responsibility programme >