How Employees' Inner Development Can Drive a Company’s Sustainability Performance

When it comes to adhering to regulations such as CSRD and SFDR, one might think at first glance that it is ‘just’ about complying and reporting. But after spending some time working on these matters, companies often find that the regulations are here to support them in their transition towards more sustainable business models. This is something that the team at ImpactNexus is promoting. Not only do the regulations help companies to identify risks, find business opportunities and to get better positioned in the competitive landscape, but they are also helping companies to get better equipped for the increasing number of conscious consumers.  

However, even if a company follows the regulations perfectly and excels in sustainability efforts, it might not boost revenue or growth if the company isn't genuine in their efforts. Companies can use insincere communications and efforts, beyond traditional greenwashing, to appear genuine. However, this is becoming harder due to increased demands for disclosure and transparency from consumers and authorities. In other words, a company might try to show genuine values for profit and growth, but if they aren't sincere, it will be evident.  

With the above in mind, genuine approaches cannot be forced. There are ways to work on a company’s genuine practices though, and that always starts with the individuals behind it. In other words, start by looking at what is happening on the inside, start by looking at the inner development of the employees at your company.

When talking about inner development, how can this be used to help a company transition into a sustainable development in a genuine way? And why should individuals be addressed, and not companies per se?

The step that needs to be taken is the individual realization of what sustainable development means, and what that looks like in our own individual vision for the future. When getting attached to that vision, and feeling the emotional longing for change, one can also gain the mindset that’s needed to actualize that change. When this is achieved, we here at ImpactNexus believe that individuals within any given company will reach the motivation to be able to push for that change, and hence a more genuine approach is more likely to be shown in a company’s activities, including the CSRD work.  

When we are able to work on our inner development, we will be able to also see external results from it. But today, many of us are focusing on external results first. We are often relying on external solutions to solve the various sustainability problems that we have, when in fact, we believe, it is our inner capacities that are forming the solutions for those problems in the first place.  

Accordingly to the Swedish organization Inner Development Goals, we have in the last centuries been very good at exploring and focusing on the external world (which has for example been giving us lots of groundbreaking innovations), but that we have now reached a point where this outside view needs to be complemented by an inside view.  

They further point out that the environmental problems that we see today such as climate change, biodiversity loss and ecosystem collapses, is actually not the problem – the real environmental problems here are greed, selfishness and apathy. To be able to deal with this, we therefore need an inner development transformation before we can work on any solutions to these problems.  

One interesting backbone to the organization's work is the example they bring up, called “The Nordic Secret”, co-researched by one of their founders: Thomas Björkman, co-researched and written by Lene Rachel Andersen. This explains how Sweden (and the other Nordic countries) went from an extreme poor and non-democratic society in the late 1800s, which also lead to a heavily emigrating population - to a flourishing, happy and rich nation with a stable democracy, in just a couple of decades.  

To be able to turn the negative development that they saw in the 1800s, the nation realized that they needed to start with the inner development and the inner growth of their people first. Hence, ca 150 retreat centers situated in the deep nature were built around the country. They managed to host an adequate number of the population, and together they worked on building inner development capacities and growing the conscious mindsets including emotional and cognitive capacities. This was an initiative and idea coming from German philosophers including Goethe, but that was never executed there. The aim of the inner growth was for each individual to find their true inner compass, without any interference of political views, religions or cultural beliefs.  

Groups of people were included in these centers, forming them into co-creators or agents for the new flourishing nation that was envisioned, and they were trained in developing their inner capacities that were needed to form this new world. Their learnings and mindsets eventually spread to the rest of the population; hence a cultural shift was reached, and the nation turned from being one of Europe’s poorest and de-democratized - to one of the most flourishing, transformative and richest ones with a strong democracy.  

It’s the results of this very inner transformation that we can see in the country today, which has led to its well-known innovations and high entrepreneurial spirit, among other things.  

The Nordic Secret is a very good example of how individual inner developments can lead the way to outer transformations and hence, collectively build the solutions for the sustainability problems that we see today - solutions that we then can incorporate in any sustainability communication including our reports under CSRD, and to make our work stand out by being highly genuine.  

It is also a good example of how this humanistic worldview that we used to have later again got lost in the war, and transitioned into the more materialistic worldview that we are living under today. A view that we can see is yet again shifting into a more sustainable one, with the CSRD and other sustainability regulations as a good example of that. However, it might not be enough to create a sustainable world unless we start working with the inner development too – as the history is clearly showing us.  

“What is the key takeaway from the above? Maybe that what a lot of people might not reflect on in the midst of their busy schedules and pressing deadlines, is that the external results and visions that they are aiming for doesn’t come from all the work that’s being produced - but from each and every individual’s inner state and mindset, hence, start there.”

How can we in a more concrete way connect inner mindsets to reporting directives such as CSRD and SFDR and how can working with our inner development increase the quality and effectiveness when working with those directives, while on their pathway to successfully establish a sustainability transformation?

With the above background in mind, the following results could be seen when working with the inner development of individuals at a company that wants to foster change:  

Value Alignment: Inner development often involves fostering values such as empathy, responsibility, and sustainability consciousness. When individuals within a company cultivate these values, they are more likely to align their actions and decisions with sustainability goals, which also positively impacts the company's work with the CSRD.

Behavioral Change: Inner development can lead to behavioral changes, such as increased awareness of environmental and social impacts, adoption of sustainable practices, and willingness to engage in Corporate Social Responsibility initiatives. These changes contribute to the company's efforts to meet sustainability targets and improve reporting metrics.

Employee Engagement: Companies with a strong focus on inner development and well-being tend to have more engaged and motivated employees. As a result, engaged employees are more likely to participate in activities fostering corporate responsibilities, provide input for reporting, and support sustainability initiatives - ultimately enhancing the quality and credibility of reporting under CSRD.

Innovation and Problem-Solving: Inner development encourage creativity, critical thinking, and problem-solving skills among employees. These qualities are essential for identifying sustainability challenges, developing innovative solutions, and implementing effective strategies, all of which are reflected when working with the CSRD.

Corporate Culture and Reputation: Inner development contributes to building a positive corporate culture centered around sustainability and social responsibility in a genuine way. Companies with a strong culture of inner development could be more likely to being perceived more favorably by stakeholders - enhancing their reputation and credibility in their CSRD reporting.

Long-Term Sustainability: Sustainable business practices require a mindset shift and long-term commitment from individuals within the organization. Inner development practices are more likely to foster the resilience, adaptability, and perseverance needed to navigate complex sustainability issues and to drive continuous improvement in all sustainability matters over time.

There is of course a lot of research and initiatives that companies can take that want to work on the inner development of their staff. For further information and concrete examples of how you can work with this for the individuals at your company as part of your CSRD journey, we recommend researching the Inner Development Goals to see if this could be a good starting point to your company’s sustainability transformation.  

For inspiration, there are also good examples from companies like IKEA, Google and Ericsson that has been progressing well with the topic, just like Selina Waddington Millstam, ex-global head of talent at Ericsson puts it; “We see the IDG framework almost as a part of the engine under the hood of the car.”  

Interested in learning more about how ImpactNexus can assist your company in its sustainability transformation? Book a demo or a discovery call!