At a Glance:
- Sustainability transformation is accelerating, with markets like green finance, electric vehicles, and sustainable food expected to exceed USD 34 trillion by 2032, creating commercial opportunities.
- Internal barriers, such as short-term incentives, a “cost” mindset, and limited ESG capabilities, hinder true sustainability integration.
- A Transformation Management Office (TMO) with a mandate for sustainability, can overcome these challenges by integrating ESG into strategy, operations, and culture .
By 2032, sustainability-linked markets—like electric vehicles, sustainable food, and green finance will surpass USD 34 trillion in combined value. At the same time, new regulations such as ISSB’s IFRS S1 and S2 and the EU’s CSRD are transforming ESG from voluntary reporting to a legal and strategic imperative. But despite growing pressure and opportunity, most companies remain stuck.
According to World Business Council for Sustainable Development (WBCSD) and ERM’s Catching the Wave report, over 130 global business leaders confirmed a major execution gap: while long-term sustainability ambitions are well established, short-term action and enterprise-wide integration still lag. Key barriers include a focus on short-term performance, a perception of sustainability as a cost, and a widespread lack of internal ESG capabilities.
To truly transform, companies must embed sustainability across every function, from strategy and operations to supply chains and governance. This requires an evolution in how: the Transformation Management Office (TMO) operates. By formally integrating sustainability into its mandate, the TMO can drive ESG adoption at scale, bridging ambition and action, aligning ESG with business priorities, and building resilience for the future.
How to embed sustainability at every level of your business.
“Transformation management”, in sustainability is to support, plan, and manage the deep organisational changes required to embed sustainability into a company’s core operations and strategy.
Providing Essential Support and Governance
Establishing a strong sustainability governance framework is key, and a TMO provides the structure and capabilities to make it effective.
Best practices include:
- Establish Dedicated Sustainability Committees: Form a board-level sustainability committee with independent sustainability experts and cross-functional representation. Complement this with an executive sustainability committee to drive alignment, ensure accountability, and facilitate cross-industry learning.
- Integrate Sustainability into Corporate Performance Systems: Embed ESG criteria into enterprise risk management, strategic planning, and performance evaluation. Develop systems that track progress on sustainability targets using transparent, auditable metrics aligned with leading standards (e.g. GRI, IFRS).
- Set Ambitious, Science-Based Targets and Review Regularly: Commit to science-based targets and make these binding, with regular reviews and recalibrations based on performance, stakeholder feedback, and evolving regulatory requirements and methodology changes.
- Ensure Transparent Measurement and Disclosure: Adopt best-in-class reporting practices, ensuring clear, consistent, and timely disclosure of sustainability performance to stakeholders. Leverage digital platforms for (near) real-time data collection, analysis and reporting.
- Embed Continuous Improvement: Establish feedback loops and learning mechanisms to adapt governance structures and processes in responses to changes in material risks, opportunities and stakeholder expectations.
Strategic Integration and Vision from Top Leadership:
A TMO helps to define clear sustainability objectives and key performance indicators (KPIs) during strategic planning, ensuring that sustainability is embedded at the core of the organisation’s vision and aligned with overall business objectives. This vision should be championed by the CEO and reinforced by the entire C-suite, signalling that sustainability is integral to the company’s long-term strategy.
To drive true integration, the TMO supports embedding sustainability into all aspects of planning and risk management – spanning products and services, talent decisions, investments and commercial activities. This includes:
- Assessing Leadership Competence: Regularly evaluating the board and executive leadership’s sustainability knowledge and identifying gaps.
- Targeted Capacity Building: Developing bespoke plans to address these gaps, such as, executive training programmes and connecting leaders with external sustainability professionals.
- Leadership Accountability: Ensuring senior leaders are visibly engaged and accountable for sustainability outcomes, which is essential for building internal momentum and securing investment.
Defining Roles and Responsibilities through Management Control Systems (MCSs):
The TMO helps to integrate sustainability into the organisation’s management control systems, ensuring that ESG priorities are reflected in everyday business decisions. Key actions include:
- Integrating Sustainability Metrics into Performance Dashboards: Embedding ESG indicators into the dashboards of leaders and teams across the business, making sustainability performance visible and actionable at every level.
- Aligning Incentives with ESG Outcomes: Linking meaningful portion of both short- and long-term compensation to the achievement of sustainability targets – not only for executives and board members, but also for managers and frontline employees.
- Embedding ESG in Performance Reviews: Incorporating sustainability objectives and KPIs into annual performance evaluations, ensuring accountability and reinforcing the importance of sustainability across all roles.
By formalising these practices, the TMO ensures that sustainability is not a stated priority, but a shared responsibility embedded in the organization’s culture, incentives, and daily operations.
How does transformation management framework work?
At Renoir ESG, our consultants play a pivotal role in establishing and supporting a Transformation Management Office (TMO) dedicated to driving sustainable transformation within an organisation. Our expertise ensures that sustainability objectives are embedded into the strategic framework and operational execution of the TMO.
We deliver a comprehensive transformation management framework that empowers organisations to embed sustainability at every level. Our approach ensures that the TMO not only drives the change but also establishes the governance structures necessary for lasting impact.
Here’s how we support your sustainable transformation:
Renoir ESG Transformation Management Framework
- Diagnostic Assessment: We conduct a thorough analysis of your organisation’s sustainability performance, including a double materiality assessment to identify ESG risks, opportunities and impacts.
- Clarifying the ‘Why’: We work with leaders to define the foundational purpose behind your transformation, ensuring it aligns with your company’s values and strategic goals.
- Transformation Roadmap: We develop a detailed roadmap for your sustainability journey, embedding ESG considerations into financial workflows and enterprise risk management processes.
- Implementation Support: We drive and coordinate the implementation of initiatives, using a unified methodology. This ensures cross-departmental collaboration, transparent progress reporting, effective resource management, and ongoing alignment of the strategy with leading frameworks and standards.
- Stakeholder Engagement: We facilitate engagement with internal and external stakeholders, including senior management, frontline employees, customers, suppliers and investors, and help build deep networks with expert sustainability partners to increase access to talent and internal capacity.
- Standardisation and Reporting: We advocate for and implement standardised tools and data for ESG reporting, addressing the current challenges of inconsistent and unreliable data.
As your TMO matures and achieves its mandate, we support the transition to formal governance structures that will assume ownership of sustainability performance and ongoing change management—ensuring your transformation endures.
The time for “wait and see” is over. It’s time to lead with impact, resilience, and agility.
Develop a comprehensive corporate sustainability strategy and transformation roadmap.
