Bystronic: The Art of Operationalising Sustainability

Conversations, consultancy and campaigns are very useful elements of the journey towards carbon neutrality.

But there is one element above all that turns up the heat from simmer to boil – action.

For action, read ‘operationalising’; a 16-letter, seven-syllable word that actually gets straight to the point.

Michael Praeger, the Chief Sustainability Officer at Bystronic, also gets straight to the point – he is passionate about operationalising sustainability: shifting the focus from reporting to action.

Michael, who has worked for 30 years in manufacturing, mainly in metals, aerospace, automotive and packaging, says: “What inspires me is helping companies to see sustainability as a business opportunity and to get it done.”

The essence of operationalising sustainability

Overwhelmed by regulations and alarmed by the planet’s symptoms, many companies don’t know how to proceed – how to meet their responsibilities and comply with regulatory demands, while not losing the focus with their business.

Companies can, of course, choose to procrastinate: to push their responsibilities down the road.

But the net of net zero legislation and regulation is closing in and the planet’s symptoms are more alarming.

The solution, according to Michael, is clear: “Sustainability is here to stay, so companies need to integrate it into their business. They need to take on a new mindset that sustainability is a business opportunity and not a compliance issue.”

Many companies struggle to deal with the demanding regulatory environment that is coming at them. This is where the change of mindset comes in, says Michael, who points out that compliance and action are not mutually exclusive.

He says: “Operationalising sustainability means you need to know where the regulatory landscape is going, but rather than focus on fulfilling irrelevant data requirements to become over-compliant, figure out what the right thing to do is and take action on that. This is what we mean by operationalising sustainability – you use sustainability as a platform to optimise performance,” he says.
“A business cannot succeed by focusing solely on sustainability at the expense of profitability, but it also cannot prioritise profit without regard for sustainability. True success lies in finding a balance between both, ensuring financial growth while making a positive environmental and social impact,” he adds. 

Operationalising sustainability is rooted in a pragmatic approach that makes business sense in every way.

He says: “We need Lean Business Sustainability and to get there, we are using ESG performance management systems to help companies manage from A to Z, integrating sustainability into a strategy and executing it through the organisation so that sustainability becomes the way companies do business.”

Barriers and solutions

The good news is, many companies have understood “why we need to do this”, but they struggle in finding a business focused and pragmatic way to “how can we do it?”.

Michael says the most common theme he hears is that businesses don’t know where to start or cannot start, because they are struggling to figure out the baseline data before they can formulate targets. In all of this, they forget to start doing and focus on action. 

This is what Bystronic overcame, with its proprietary ESG performance management system – something Michael believes all companies need.

“We believe that you can make more progress by adopting an ESG performance management system, which helps you manage the non-financial side of the business like you manage your financial side,” he says.

“Whenever we talk about a problem for a business, I think it is actually an opportunity.

I believe that when you see sustainability as a business it presents a massive opportunity for growth as well.”

Turning theory into practice

The first step can be the most difficult. Michael recommends that companies start by having a purpose project to define the company’s broader mission and shared purpose.

“Many companies have roots and DNA in innovation,” says Michael, “so they can step back and start with a purpose project. They should talk to their clients, their suppliers and their employees and ask where they see the future. Digitalisation and sustainability will most likely pop up.” Thus, you elevate sustainability on the corporate agenda and into the Board room. This gets you the power and attention you need instead of hiring a person starting sustainability bottom-up with gathering data and writing environmental policies focusing on compliance and ESG Rating improvement rather than delivering business value. 

He says when we kicked-off our purpose process at Bystronic, the “innovation minds turned hot” and we had a lot of employees who immediately had ideas or success stories on where we are great already.

Without a baseline, some leaders struggle in formulating targets, which is essential to manage any project for success. 

Understanding where you are and where you need to go, can easily be done via outside-in and inside-out analyses. The basis of any sustainable business strategy is the double-materiality in which you determine the top priorities of focus for your company. The material topics for any company are pretty obvious by analysing your industry peers, customers and supply chain. “This is not rocket science at all,” says Michael 

In order not to lose time, Michael recommends developing ambitions from the top down for all identified material topics. In that sense, defining sustainability ambitions is easy, because the direction companies need to take is pretty obvious and clear – as an example he refers to net-zero or science-based targets.  

Via an inside-out analysis, you can then involve all departments and employees to gather and present what they already have. 

“Companies are usually amazed at how much data they have because they never looked at current initiatives and data through the lens of  sustainability strategy or reporting,” says Michael. 

“This creates a lot of momentum and often companies can identify people who are really willing to go the extra mile  -- and those people can help form a sustainability council in the company, which is what we did at Bystronic.” Thus, you can decentralise sustainability and help transform the organisation in making sustainability the way each function and employee does the business. 

More on the ESG Performance Management System

Much of the conversation about sustainability in business focuses on reporting and ratings and to achieve regulatory compliance. But Michael wants the emphasis to shift towards focusing on the necessary actions – it is more important to work on the most important initiatives and on positioning sustainability as a business opportunity.

“We need to demystify sustainability and integrate it into the business strategy. We don’t need separate sustainability strategies – we need sustainable business strategies,” he says. 

He adds: “We need sustainability to be in the DNA of the company. They need to move away from central reporting to decentralised execution.”

At Bystronic, sustainability is embedded into the core of the business. The company now has decentralised sustainability into the functions – like sustainable procurement or sustainable engineering as part of the daily functional activities. Also, there is no extra sustainability budget for R&D, instead, Sustainability, circularity, and resource efficiency is already included in the product development process. 

The final link in the chain is credibility, Michael says. “You need credibility. If you are not compliant, you are out of business – and not fulfilling the necessary regulations and frameworks will put pressure on your licence to operate. Customers and investors want to see that you are fulfilling requirements”.Michael adds a word of caution, though. “When sustainability is not managed as a business function, but more out of the lens of functional excellence, there is a huge risk of over-compliance and unnecessary work for work.” 

Seizing the opportunity

The ESG performance management system is designed to help businesses integrate sustainability into their systems, operations and everyday actions.

 “Companies need to build a sustainable business strategy. They need to establish KPIs and define initiatives to accomplish them. For the financial side of the business this is already in place, equally this has to be done for the non-financial side of the business. 

“Other companies are asking for help in how to do this and to execute it – ‘what are the initiatives we need?’

“Initially, they may say their reporting looks good, but tomorrow, they will need to make sure their supply chain is ready and they need to show results..”

But this approach should be flipped, according to Michael.

“It’s more important to work on the right things and improve reporting afterwards, rather than having every report ready but not the right results to show.”

Into a sustainable future

This next comment may ruffle feathers in the offices of senior sustainability executives, but it is a theme that is picking up traction at events.

“We need CEOs and other senior leaders to see the world of sustainability as integrated. The new reporting directives, including the CSRD, will be all about managing non-financial with financial in one shot. The world and the regulatory environment and reporting is heading in this direction.”

While he is pleased that we have moved past the question of why we need sustainability, he wants to see a far more pragmatic approach to the cat’s cradle of regulatory red tape applied to smaller companies.

Michael says: “We need to force regulation to be condensed because right now it can be a pain for companies to do the bureaucratic work. We should help companies do the right things and reduce the burden of bureaucracy.” However, he also points out that without regulatory pressure, companies might not move. It is the right balance that is needed. 

Bystronic: An industry ambassador

Bystronic was listed on the stock market in 2021 and did not have a sustainability strategy.

“We spent the first year or so developing an ESG performance management system and started to make progress. After that, we spent another year to 18 months focusing on execution.  Now Bystronic’s system serves as a benchmark in the industry.”  

Now, three years on, Michael feels Bystronic’s approach to embedding sustainability has helped it evolve into an industry ambassador.

“We no longer only want to make ourselves sustainable, but we are now focusing far more on helping our clients and supply chain, as well as the entire industry to become more sustainable. We moved from company sustainability into developing cleantech product portfolios and started our own sustainability consultancy to inspire and enable our ecosystem to make progress, too.

As for a final piece of advice for businesses unsure where to start with sustainability, it is simple – and worth an apologetic nod to Nike.

Just do it.

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