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Embedded Strategies for the Sustainability Transition

It is time for companies to take a very different approach to corporate strategy.

Our new Embedded Strategies guide helps companies respond to the growing calls for businesses to articulate their purpose and their strategy in alignment with the need to shift the global economy towards the reduction of inequality, a rapid climate transition, the preservation of biodiversity, and the elimination of waste.

This guide will help you to develop a contextual strategy and goals that ensure your company is doing its part to maintain the resilience of key social and environmental systems.

Building on our Road to Context guide with insights from 300+ interviews with senior executives, CEOs, board chairs, and directors, as well as our experiences supporting companies around the world, it outlines resources and tactics that can help your company to scan for emerging issues and risks; understand their implications for your business; understand your impacts and your potential for positive influence; prioritise where it makes sense to direct your efforts; and set your strategy and goals in alignment with delivering systems value.

The Task Force on Climate-related Financial Disclosures

Momentum is growing for organisations to formally and transparently articulate the risks that climate change poses to the value of their assets and their future profitability. The Task Force on Climate-related Financial Disclosures (TCFD) has emerged as a response to this call for action, empowering companies to more effectively measure and evaluate their own risks and those of their suppliers and competitors. The TCFD promotes “consistent, comparable, reliable, clear, and efficient” voluntary climate-related financial disclosures, and has developed comprehensive recommendations and resources in support of this. These resources focus on governance, strategy, risk, metrics, targets, and the use of scenario analysis for evaluating climate-related financial risks and opportunities.

The work of the TCFD has culminated in a comprehensive Final Recommendations report and several supplemental reports, including a Technical supplement, which provides in-depth information and tools for using scenario analyses to understand the strategic implications of climate-related risks and opportunities to your organisation.

The Taskforce on Nature-related Financial Disclosures

Reversing global nature loss depends on a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes. This depends on large and small businesses across supply chains, financial institutions, and industries of all types collectively identifying, assessing, managing, and disclosing nature-related dependencies, impacts, risks, and opportunities. Towards meeting this inter-industrial challenge, the Taskforce on Nature-related Financial Disclosures (TNFD) was established in 2021 in response to the growing need to factor nature into financial and business decisions.

The TNFD is actively developing a market-led, science-based risk management and disclosure framework for organisations to report and act on evolving nature-related risks and opportunities. The V0.4 of the TNFD beta framework is now out for market consultation, and the complete recommendations (v1.0) are expected to be published in September 2023. The TNFD has also developed a Knowledge Bank that features a curated collection of the latest external resources and market insights on nature-related risks and opportunities.

The CSRD: A guide for companies

The CSRD is intended to bring sustainability reporting up to the same quality and control bar as financial reporting, and companies will need to elevate the breadth and robustness of their ESG reporting to comply with these new regulations. Watershed has created this short guide to help you to better understand the CSRD’s technical rules, also known as the European Sustainability Reporting Standards. These rules include topics such as general disclosures, social and environmental standards, and governance standards. It also unpacks how the CSRD define "double materiality" and outlines timeframes and other CSRD reporting expectations.

The Social Foundation: 'A Safe and Just Place for Humanity'

Kate Raworth's “Doughnut” model is a key framework for understanding sustainability context. Building on the planetary boundaries framework as a 'ceiling', it adds social foundations as a 'floor' and underlines the need to operate in the space between. The social foundation is made up of 11 boundaries that draw attention to communities needing access to basic resources to fulfill their human needs. This access needs to be achieved in a way that does not place undue stress on the earth's resources. The framework is based on the premise that we should be striving to build and maintain social foundations while staying within planetary boundaries.

Planetary Boundaries: 'Let the environment guide our development'

First introduced in 2009, this framework identifies and quantifies nine planetary boundaries (or thresholds) which regulate the stability and resilience of the earth. Crossing these boundaries may generate abrupt and irreversible environmental changes that threaten the earth’s capacity to support human life. Tipping points have already been reached for climate change, biodiversity, land-system change, and the nitrogen cycle. In this TED talk, Johan Rockstrom from the Stockholm Resilience Centre introduces the framework, explores how human growth has strained resources, and explains how the global community can prioritise and scale solutions.

A People's Orientation to a Regenerative Economy

This guide from the United Frontline Table is an excellent starting point for understanding what a "regenerative economy" is and how your company can play its part in achieving it. It provides nuanced definitions for a range of intersecting issues and phenomena, including Climate Justice, Feminist Economies, Sacrifice Zones, and a Just Recovery and Just Transition. It introduces five critical points of intervention that will help to develop your narrative of positive contribution and shape policies that will uplift people and communities. The guide also includes a series of prompting questions, a framework for policies that will help you to advance a regenerative economy, and fourteen themes (or planks) that must be addressed to achieve a regenerative economy.

The Climate Justice Playbook for Business

Putting people and justice at the center of business efforts to address climate change is imperative to achieving the actions necessary to reduce and reverse its impacts on communities, the environment, and industry. B Lab’s Climate Justice Playbook for Business is a good starting point for understanding and enacting climate justice. It provides a sound business case for climate justice, features case studies of climate justice in action, and addresses key obstacles, insights, and questions. It also identifies the key stakeholders and rights holders who your business should collaborate with to maximise the scale and scope of your contributions to achieving a just transition.

A Compass for a Just and Regenerative Business

This guidebook from Forum for the Future and WBCSD will help leaders and change agents to understand the vision of a just and regenerative future and the shift in mindset and activities required to get there. The guide provides a robust definition of what being just and regenerative means for businesses, introduces a compass that will help you to identify the stage your business is in (risk mitigation, zero harm, do good, or just and regenerative), and illustrates what a credible maturation arc can look like on a range of key issues.

ENCORE (Exploring Natural Capital Opportunities, Risks, and Exposure)

ENCORE (Exploring Natural Capital Opportunities, Risks, and Exposure), a free tool from the Natural Capital Finance Alliance, will help you to visualise how your business may be exposed to accelerating environmental change. The tool provides a snapshot of the depencies and impacts for a wide range of sub-industries and processes, and includes fact sheets and maps to help you understand the links between business activities and nature.

Indigenous Relations: Insights, Tips & Suggestions to Make Reconciliation a Reality

This book from Bob Joseph, founder and President of Indigenous Corporate Training Inc., is a good starting point for understanding preferred Indigenous terms; common myths and stereotypes about Indigenous Peoples; Indigenous worldviews and barriers to employment; Aboriginal Rights and Title; the differences between types of Indigenous leadership; and the effects of UNDRIP on the Rights of Indigenous Peoples in Canada. The book also introduces a training model (RESPECT) that will help you to build effective relationships with Indigenous Peoples. This resource will be of particular benefit to leaders and communications professionals working for organisations with operations in North America.

Framework for Strategic Sustainable Development: Backcasting

What does your company need to do today to be sustainable in the future? This resource from the Natural Step outlines how starting with a vision of what success looks like can help build consensus and unlock innovation in a future bound by social and ecological constraints. The resource also offers a useful animated clip explaining the concept of backcasting.

Defining True Sustainability

In this brief article, Cory Searcy suggests that companies must change how they view sustainability if they want to determine whether or not they are sustainable. He explains how most companies currently focus on reducing environmentally destructive or unethical behavior, and how they must instead assess their performance relative to thresholds linked to the economic, environmental, and social resources on which they rely. This is a great, quick read that will help you articulate the need for moving beyond the 'triple bottom line' and towards a context-based 'embedded view'.

Sustainable Development Goals Interactive Tool

IISD has developed a free interactive tool that directs users to SDG-related publications by region or goal. This tool provides insight into how the SDGs impact companies and communities around the world, and may be of particular use for companies with an international scope or those interested in entering new markets.

Scenario Planning for Climate Change: A Guide for Strategists

This book from Nardia Haigh takes a deep dive into climate change-related scenario planning and provides a framework that can help decision-makers develop a climate change strategy. The book builds on a range of rigorously tested scenario planning frameworks and provides a practical, four-step method for developing a scenario planning project. It also includes summaries of common climate change trends.

Her website also offers complementary videos, climate driver summaries, a sample scenario planning project proposal, and various worksheets to help you get started.

The Futures Toolkit: Tools for Futures Thinking and Foresight Across UK Government

This toolkit was created by the UK's Government Office for Science to help acquaint policymakers and government officials with foresight and futures thinking and to help with the creation of scenarios. We specifically recommend pages 26-76, which highlight a broad range of tools that can help you to gather intelligence about the future; explore the dynamics of change; describe potential futures; and develop and test policies and strategy.

Equitable Futures Toolkit

This toolkit aims to help you imagine a more equitable future through two different interactive approaches: through Institute For The Future (IFTF) Foresight Training and the Equitable Futures Card Game. These modular workshops would especially benefit sustainability practitioners who want to facilitate sessions with senior leaders. The tools included provide a novel way of helping participants to understand the factors impacting your business; to create meaningful social narratives that can guide strategy; to build awareness of the positive and negative consequences that your business has on the world around it; to develop an understanding of challenges to overcome and the values and tools needed to build a more equitable future; and more.

Foresight Training Modules

These Foresight Training Modules were created by Policy Horizons Canada to help users build a better good understanding of foresight-related methodologies. The modules cover topics such as scanning, assumptions, and systems mapping, and they feature summaries, exercises, tip sheets, and even presentation and facilitation notes to support change agents in teaching this material to peers and leaders.

Although policymakers in government were the target audience for these modules, the content is equally applicable to educators and decision-makers in business.

Strategic Foresight Planner

This introductory guide on strategic foresight is a good, accessible primer for board members, executives, and other business leaders who want to grow their understanding of and capacity for long-term scanning and planning. It explains what foresight is, what it is not, and what it can achieve. It also provides an overview of some of the most common methods and tools for effective strategic foresight.

Foresight Frameworks and Tools

The Future Today Institute has created a wide range of simple and accessible tools to support companies and leadership teams in developing a culture of foresight. These frameworks, methodologies, and visualisations can help you to better understand - and convene discussions on - topics such as strategic thinking, trend forecasting, scenario planning, and more.

3 common pitfalls of using scenario analysis – and how to avoid them

Climate-related scenario analysis is one of the best available tools for navigating an increasingly unknowable future, and yet common pitfalls are limiting its potential benefits to companies. This article from the CDP highlights three simple recommendations that will help you to make the most of scenario analysis: using a range of distinct and realistic scenarios; selecting the right scenarios for your organisation; and transparently reporting the results.

Liberating Structures

There are five conventional structures that guide the way we organise routine interactions and how groups work together: presentations, managed discussions, open discussions, status reports, and brainstorm sessions. These structures, however, can stifle inclusion and engagement, and are often too inhibiting or too loose and disorganised. To complement these more conventional options and improve shared knowledge and engagement, Liberating Structures introduces a menu of 33 innovative methods. Each method includes expected outcomes, step-by-step instructions, "tips and traps," examples, and more.