Anyone who regards sustainability merely as a marketing ploy or passing fad, or only engages with it half-heartedly, will soon have cause for concern because the financing of companies depends on it. According to model calculations by regulatory authority BaFin, damage amounting to trillions of dollars worldwide will arise solely from climate change. Against this backdrop, banks are obliged by BaFin to assess companies in terms of potential sustainability risks – marking a significant shift in how businesses are evaluated within the capital market.

Those without a sustainable business model will have to reconcile with expensive financing and insurance, assuming they are even granted such resources in the future. Moreover, there is potential for reputational damage that can significantly hinder business relationships and recruitment efforts.

While it may be true that numerous sustainability initiatives already exist within your organization, these aspects often take a back seat in day-to-day operations.

Experience has shown that appointing sustainability officers is often useful but rarely sufficient for adequate management of sustainability requirements. Transforming into a sustainable company requires organizational anchoring of the topic so that it receives necessary consideration in all operational decisions; this change process is frequently underestimated.

The sustainability regulatory framework imposes new demands on corporations and aims to facilitate the transition towards greater sustainability in economic and societal realms. A key mechanism for achieving this objective is steering capital and financial flows into sustainable business sectors.

If a company fails to establish a sustainable business model that meets the capital market’s requirements for funding, it will receive an unfavorable rating from banks during risk analysis. Such evaluations have an immediate impact on the company’s ability to survive in the long term: poor ratings and their associated chain reactions and interactions can cause severe damage to a company’s reputation, resulting in further disadvantages – including expensive insurance and financing (if granted at all) as well as difficulties attracting suitable personnel.

In order to foster transparency and comparability regarding sustainability among companies, increasingly comprehensive regulatory requirements for reporting are being established for a growing number of businesses. For example, as part of the implementation of the Corporate Sustainability Reporting Directive (CSRD) from January 1, 2025, it is planned that large companies, in particular, will have to carry out a so-called double materiality analysis: Both the influence of the sustainability aspects on the company’s business activities (outside-in) and the influence of the company’s business activities on the sustainability aspects (inside-out), as well as their significance for the stakeholders, must be regularly assessed and documented.

Sustainability is not a passing fad, but rather an essential factor for ensuring the future success of businesses across the domains of environment, social responsibility, and corporate governance (ESG).

The examination of regulatory requirements indicates that ESG is a demanding issue. To prevent sustainability “agents” from being burdened with unrealistic expectations, it is crucial for the subject to be integrated into all relevant line functions in day-to-day operations.

The key to success is creating the necessary awareness of problems at the management level. Our services involve advising and supporting you in developing a credible and effective positioning for your organization both internally and externally. This requires connecting different perspectives, thereby utilizing the entire system intelligence of your organization. Through this process, a shared vision for the future can be established, allowing paradoxical issues to be resolved collectively on top decision-making levels. This lays the foundation for credible communication within and outside of your organization while ensuring that subsequent decisions align with this communitized vision.

In the context of profound organizational change processes, our focus lies on third-order change. This entails modifying established patterns of change within an organization in order to enable necessary changes that will facilitate a sustainable vision for the future – and ultimately result in a transformation into a sustainable enterprise.

By utilizing carefully designed modern formats, we bring together diverse internal and external perspectives and facilitate cross-functional networking.

The image of the black swan was already used by the Roman satirist Juvenal. Since black swans were completely unknown in Europe at the time of the Roman Empire, the satirist often used the image of the black swan jokingly as a figure of speech for absolutely impossible events.

After the Australian continent was discovered and subsequently black swans were actually sighted in 1697, the figure of speech in the English language turned into a metaphor for a very unlikely but still possible event.

According to systemic understanding, organizations have their histories, images, and path dependencies. The past is taken as a model for the future. Thus, organizations create their construction of reality, often without any reference to fact. An organization sees what it sees – it usually does not see that it does not see what it does not see. If – according to existing and accepted understanding – there are no black swans, then they are not perceived. The consequence is that phenomena are either not seen or misinterpreted.

The problem of organizational self-reference takes hold. Notable, exemplary consequences: Financial crisis, socioeconomic consequences due to the Corona pandemic, or climate change.

Events with massive social, ecological, or economic consequences were not expected in advance and threaten the business models of established organizations. In retrospect, the developments appear explainable and the world wonders why it was not prepared for them.

The work of the renowned social scientist and founder of the newer systems theory, Niklas Luhmann, provides a possible explanatory model for the phenomena observed in public utility companies. Luhmann constructs organizations as self-organizing social systems that work out suitable solutions for selected social problems outside themselves and thereby derive their reason for existence.

Successfully processing these social problem statements requires an organized collaboration of different types of expertise. Luhmann further assumes that during the course of new-age development right up to modern society autonomous, social function systems have, to the greatest possible extent, further differentiated themselves into certain particular aspects of social reproduction. In their development, they are solely oriented to their own logic and no longer follow comprehensive steering principles. Amongst other things, Luhmann includes politics, the economy, science, and law in these function systems.

Even though some of these function systems have a central role attributed to them, none of these social sub-systems actually take on a central role, neither politically nor economically. According to Luhmann, the function systems are alternately self-governing and not substitutable. However, there are certain exchange relationships – for example between law and economics, one can identify property and contracts as the trade-offs.