What is a sustainability management system?

Management systems help businesses structure and implement innovative practices within their organization.
There are many areas of application such as safety, quality and today, it can also be applied to sustainability.

Like a roadmap, the management system guides you through the planning, implementation, evaluation and improvement of your actions covering all aspects of CSR areas in order to then communicate your maturity in all transparency.

Building your sustainability management system well allows you to be in control of its CSR risks and to take control of financial opportunities, but also of control its positive and negative impacts related to the environment, social, ethical and responsible purchasing.
Through this article, we will go into detail on the following points:

• What is a management system?
• The theory: Deming's wheel or the Plan Do Check Act (PDCA)
• What is a management system applied to sustainability?
• The components of a sustainability management system
• A concrete example

Happy reading!

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What is a management system?

A management system is a set of processes, practices, and rules that a company sets up to achieve its goals.

It helps to coordinate the activities of the company, to ensure the quality of products or services, to improve efficiency and to manage resources!

A management system can be applied to various specific themes, here are some examples:

• The quality: Ensure that products or services meet customer requirements and quality standards (e.g. ISO 9001).

• The environment: Reduce the environmental impact of company activities (e.g. ISO 14001).
• Information security: Protect sensitive data against threats and ensure their confidentiality (e.g. ISO/IEC 27001).

Each type of management system is designed to improve specific aspects of business management and operations.

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The theory: Deming's wheel or PDCA

To set up a management system, we recommend using the Deming wheel, also called Plan Do Check Act (PDCA).
What exactly are we talking about?

It's a simple way to innovate, solve problems, and improve methodically in 4 main steps.

To better understand, we created a guide that details the use of Plan Do Check Act through the example of carbon management.

Plan - P

In this first step, a problem or an opportunity for improvement is identified.

The team analyzes the current situation, collects data and sets specific goals to be achieved.

Then, she develops an action plan to solve the problem or seize an opportunity.

Before starting, it is important to clearly define the resources required, deadlines and responsibilities of each person.

To summarize, the two key steps are:

• The definition of the objectives: Define objectives (quantitative or qualitative) for a given period. Example: In 2030, we aim to halve workplace accidents compared to 2020. To set good goals, we recommend using the SMART method, which allows you to set specific, measurable, attainable, realistic, and time-based goals.
• The definition of policies: formalize policies to communicate commitments and goals to stakeholders. These policies are the foundations of your management system and help you set a clear course for communicating it internally and externally.

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Do - D

During this phase, the planned actions are carried out, ensuring that they can be evaluated, and data is collected in real time to verify the effectiveness of the actions.

The key steps:

• Prevent risks,Some text
  • Implement actions, manage the action plan to ensure that risk prevention measures are implemented,
  • Create training courses and train your teams,

• Formalize procedures explaining how specific actions should be carried out,‍
• Mitigate risks, boost opportunities, and enhance positive impacts
• Implement actions,‍
• Formalization of the actions implemented, keep all the evidence for the Check part of the PDCA,
• Establish controls by properly formalizing all procedures.

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Check - C

After implementation, the results obtained are evaluated by comparing them with the objectives set. Discrepancies between expected and actual results are identified, and the causes of these differences are determined.

The key steps are as follows:

• Follow the KPIs : regularly monitor the relevant KPIs to monitor progress and see if the objectives are achieved,‍
• “Result” KPIs : indicators measuring the real impact of the action on the company, e.g.: X health training courses have been put in place.‍
• “Mean” KPIs : indicators measuring the deployment of initiatives in place, e.g.: X% of employees attended health training.‍
• Visualization of the KPIs : create and present legible dashboards showing progress over time,‍
• External impact assessment : monitor to monitor the external assessment of the company's impact.

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Act - A

Based on the results of the check phase, actions are taken.

If the changes were effective, they are standardized and applied on a larger scale.

If the results are not satisfactory, Adjust the plan or look for new solutions.

Afterwards, The cycle starts again at the planning stage (Plan) to continue to improve processes.

The final step is to develop reports that are easy to share to present the status of the various initiatives and the main indicators, and to facilitate communication during quarterly/annual reviews.

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The PDCA is symbolized by a wheel that is always in motion and that moves forward without looking back.

This philosophy applies to the business world, the objective being to move forward from iteration to iteration and to always aim for continuous improvement on sustainability issues.

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A management system applied to sustainability

A sustainability management system helps businesses manage their environmental, social, ethical and responsible purchasing impacts.

Businesses will thus set sustainability goals, establish policies and procedures to achieve them, and measure their progress.

The sustainability management system includes continuous evaluation to adjust actions and improve.

For greater efficiency, the company must also engage its stakeholders in order to promote sustainable and transparent practices.

The advantages of implementing a sustainability management system are numerous:

• Help with Define sustainability goals to improve operational efficiency.
• Ensuring regulatory compliance: more and more laws regulate corporate CSR issues.
• Improving your brand image: a responsible business is viewed positively by customers, partners and investors, which can build trust and loyalty.
• Attracting and retaining talent: employees are often more motivated and committed to a company that takes its social and environmental responsibilities seriously.
• Reducing risks: by adopting responsible practices, the company minimizes the risks associated with controversies, regulations and environmental or social crises.
• Efficiency and innovation: CSR practices encourage resource efficiency and innovation, for example by optimizing the use of energy or by developing more sustainable products.
• Facilitate communication and transparency with quality information.
• Centralize all data to make them more accessible and legible.
• Improves sustainability performance over time.

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What are the components of a sustainability management system?

To establish a good CSR management system, we share the essential components with you.

Double materiality matrix

The materiality matrix is a tool that helps identify and assess the issues important both for the company (internal materiality) and for its stakeholders (external materiality).

This allows understand the significant impacts of the business on society and the environment and vice versa.

To build your materiality matrix, you must define the material challenges of your company with the help of your stakeholders.

A well-defined governance

It is important to define a clear structure to lead and oversee sustainability initiatives.

Good governance defines roles, responsibilities, and decision-making processes to ensure that sustainability goals are well integrated and monitored.

The pillars of good governance:

• A project manager, In general, it is the CSR manager. It sets the pace and follows the project over time.
• Referents, they will be the project manager's contact points to share data and reality on the ground. This is generally the purchasing manager, the human resources, ethics, health and safety manager, etc.
• Have involved management in the CSR approach to move projects forward more quickly and promote CSR commitment.
• The clear definition of budgets allocated to sustainability.

Alignment with regulations and methodologies for labels, audits and certifications

Before embarking on your CSR initiatives, we advise you to take a good look the regulatory framework to which you are subject and think about labels, audits and certifications that might be of interest to you.

They will allow you to have a clear framework for starting this process.

In any case, you can use CSRD as a model, as it is often the basis for other evaluations, labels, etc.

These external standards help demonstrate the company's commitment and rigor.

Be inspired by good methodological practices and recommendations

You are not the only ones who want to get involved in sustainability topics! See what businesses in your industry are doing to save time and be able to adopt recognized methods and practices as effective by others.

Drawing on best practices helps develop strategies and actions based on experience and proven recommendations.

Setting the right goals

To be effective in your CSR approaches, you must define the objectives that you are going to set up. This is one of the key points of a successful strategy!

The goals should be SMART, Specific, Measured, Achievable, Realistic, Timely, for example:

Aim to reduce Scope 1 and 2 GHG emissions by 90% by 2030, based on 2019, in line with the Science Based Targets Initiative (SBTi).

An action plan and policies

A detailed action plan established the steps to follow to reach the goals of sustainability, while policies define the principles and rules to be followed. Together, they guide concrete actions and behaviors within the company.

Proof system for projects in place

It is about setting up a database for collect and maintain evidence of actions and results, but also to describe their implementation and effectiveness. For example, a chemical handling procedure document justifies internal mechanisms to mitigate health and safety risks for the employee. Or, an environmental action plan document makes it possible to describe past, current and future actions on environmental topics.

Track performance indicators (KPIs) to improve

KPIs (Key Performance Indicators) are specific measures used to assess a company's sustainability performance.

Monitoring these indicators allows you to quantify progress and identify areas in need of improvement.

For example: if your objective is reduced by 10%, the rate of absenteeism from work per year, one of your KPIs to monitor may be the number of absent employees.

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Centralize data through a sustainability management system

To build a sustainable sustainability management system, it is necessary to centralize data and make it easily accessible.

On the Ditto platform, our tool allows you to visualize each brick of your CSR strategy:

• The policies,
• The measures,
• Reporting,
• The owners of the tasks,
• Data completion monitoring,
• Etc.

A good CSR management system allows you to have a clear vision of all CSR approaches to be able to identify areas for improvement and communicate performance to stakeholders.

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You need help to build your CSR management system, Ditto can support and guide you throughout your process.

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Conclusion

Building your sustainability management system is essential for control its sustainability risks and opportunities.

This management system guides businesses to plan, implement, evaluate and improve all CSR actions deployed. 

The methodology we recommend using to implement it is the Deming wheel or the Plan Do Check Act. This method provides a clear framework for always aiming for continuous improvement.

The major components of a good sustainability management system are: a materiality matrix, well-defined governance, clear objectives, an action plan, policies, a system of evidence and of course performance monitoring.

As you can see, building a sustainability management system requires a lot of time and investment. To allow you to save time and gain in efficiency, we recommend that you centralize all data and project monitoring.

Ditto can help you in this process to guide you and succeed in meeting all the CSR expectations of your stakeholders.