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Overview for applicants

2021 November

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Business used to be about maximising returns to shareholders by increasing the next reporting

season’s profits. But ESG has changed that through the understanding that sustainable returns

to the owners of capital depend on other stakeholders, including employees, customers,

suppliers and the broader society.

Through this ESG perspective, Australian companies are now leading the charge of

decarbonisation, moving well in advance of governments down the path to hitting net zero

emissions. The challenge is to ensure that this can generate the sustainable returns required to

attract capital and customers and incentivise suppliers and employees.

More generally, companies now think more about their overall purpose, other than in

maximising short term profits, to sustain their ongoing financial health.

The intent of our new Sustainability Leaders List, presented in association with BCG, is to

highlight businesses who are doing just that: tying purpose to profit by investing in innovative

new programs, products and initiatives that tackle some of our most pressing environmental

and societal challenges.

We look forward to hearing from Australian companies finding growth in sustainable business -

and bringing you their inspiring stories and insights.

Michael Stutchbury

Editor-in-chief

The Australian

Financial Review

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Are you one of Australasia's sustainability leaders?

The Australian Financial Review ‘Sustainability Leaders’ list, in association with BCG, sets out to celebrate

the Australasian companies that are making real progress in tackling sustainability challenges - and

delivering business value along the way.

Whether your organisation is a disruptive gamechanger with a single-minded sustainability mission, or a big

corporate transforming itself from the inside out, tell us about your most impactful sustainability innovation,

and we’ll showcase the best in front of The Australian Financial Review’s 3.5 million readers.

This document provides context and an overview on what will be evaluated.

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Timeline

Nominations

open

Submissions

period begins

Start of

November

2021

December 20th

2021

Nominations

close

End of

January

2022

June 2022 (exact

date TBC)

March 11th

2022

Submissions

closeEvaluation of entries

Industry lists

published

Shortlist

announced

January

2022

March

2022

Judging period

begins

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The context for business is changing

Escalating

investor and

social activism

Rising standards

for a social license

to operate

Mounting sense of

urgency to mitigate

climate change impacts

Growing demand for

transparency on ESG

performance

Expanding demand

for good products that

do good

Increasing

collaboration for

collective action

Rising expectations

for a powerful

corporate purpose

Integrating ESG

performance in

investment decisions

Source: BCG

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Changing societal context/ environmental

and societal limits are narrowing the space

for 'business as usual'

To succeed, companies need to optimise for both business and societal value

Companies can widen the opportunity

space to create value and advantage by

solving environmental and societal needs

Sustainability

leaders are

taking advantage of

the changing context

to widen

the opportunity

space

TIME

Source: BCG

New growth by creating

Environmental &

Societal benefits

Growth restricted by

negative Environmental &

Societal impacts

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Sustainability leaders create environmental and/or societal surpluses…

Total

shareholder

return

Economic vitality

Access and inclusion

Ethical capacity

Environmental

sustainability

Lifetime well-being

Societal enablement

Create environmental

and societal surpluses

for stakeholdersTotal societal

impact and

ESG

performance

Innovation to

connect

environmental &

societal surpluses

to advantage

and value

Create business

advantage and value

for shareholders

Competitive advantage

Increased shareholder value

Business longevity

Note: Total societal impact is the total benefit to societyfrom a company’s products, services, operations, core capabilities,and activities. ESG = environmental, social, and governanceSource: BCG

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… as well as business advantage

Drive

consumption

decisions

Determine

employer

attractiveness

Lower

Operational

costs

Manage

and reduce

regulatory risk

Lower cost of

capital, better

financing

access

Market

expansion, new

business fields

Higher market

valuations

10%+ premiums paid for sustainability

~40% of Millennials factor sustainability into job choice

~30% of carbon reduction efforts consistent with cost reduction

20% less downside deviation for market value of sustainable funds

1 in 3 dollars invested globally in sustainable assets

11% valuation

premiums for

CPGs with best

SI metrics

~50% of US CPG growth

from sustainability-products

Source: BCG

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We want to hear about your most impactful sustainability innovation

This could be a…

Initiative Product Service Strategy

…that makes real

progress in tackling

sustainability challenges

–and delivers business

value along the way

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Companies will be ranked in the following broad industry categories

Note: If you are a technology company, please select the category your company predominantly operates in before selecting technology

Resources,

Energy & Utilities

Banking,

Superannuation &

Financial Services

Government &

Education

Manufacturing &

Consumer Goods

Agriculture &

Environment

Marketing and

Professional

Services

Property,

Construction,

Logistics & Transport

Telcos, Media &

Technology

Health

Industries

Retail, Hospitality,

Tourism &

Entertainment

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What are the minimum requirements to qualify?

Innovation does not qualify if it:Innovation qualifies if it:

Is led by a function without P&L responsibility (e.g.,

Communications, Government Affairs, HR)Is embedded in the business/business unit team

Is internal-facing and does not impact the external

value proposition (e.g., ops. efficiency program)Contributes to better environmental & social outcomes

Focuses purely on reputation-building, compliance or

creating guidelines/ policies

Creates tangible business value (e.g., generating

revenues, reducing costs, IP, competitive positioning)

Is funded by a foundation or corporate giving programIs substantially funded by the business because of its

business value or potential

Is too small or early stage to be adequately

documented and communicated

Is sufficiently documented and communicated to allow

recognition by people outside the company

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What are examples of innovations that would or would not qualify?

Selected examples that would not qualifySelected examples that would qualify

Foundation owned by pharmaceutical company

donates to a charity which helps fight malaria

Home cleaning products manufacturer developed a

plastic recycling business

Financial institution organises beach clean-up days

with its employees

Financial institution pioneered a sustainability-linked

loan facility for business banking customers

Food and beverage manufacturer sponsors local

community football team

Apparel retailer equipped its supplier farmers with

sustainable production techniques

Professional services company seconds staff to support

business development of indigenous enterprises

A utility player developed solar communities that

allows customers to trade a portion of the energy that

is generated in a fixed period contract

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Environmental &

societal benefits

Business

benefits

Industry/market impact

(new competitive advantage)

Business

model change

Qualifying entries will be evaluated based on four dimensions

• Extent to which the

innovation creates

environments/societal

surplus, e.g., improving the

company's environmental

footprint, strengthening

ethical practices in

operations, improving the

livelihoods and economic

benefits for employees and

workers and the community

• Extent to which the innovation

drives robustness and

resilience of the business

model, e.g., creating value to

stakeholders, reducing the

potential for commoditization,

leveraging partnerships and

collaborations across the

business ecosystem to

strengthen the value

proposition

• Extent to which the

innovation impacts the wider

industry/market, e.g., driving

change in competitor

practices, customer

behaviour, industry policy or

regulatory approaches

• Extent to which a company or

organisation creates

competitive advantage from

the innovation

• Extent to which the

innovation is driving change

to the company's core

practices, strategies or goals

• Extent to which the

innovation disrupts the

business model. E.g.,

improving or inventing a

specific product or process

vs. reimagining the business

Value deliveredLeadership and impact

demonstrated (innovation)

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'Sustainability Leaders' list finalists will receive

a company specific report

1. Summary of your organisation’s results on each dimension of this assessment

2. Benchmarking data to reveal how your organisation performs compared to

other entrants from your industry and overall entrants

3. Key insights uncovered from the assessment process and from global studies

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Winning the '20s: Optimize

for Social & Business Value

To learn more, see BCG's recent

thought leadership on sustainable

business model innovation

The Quest for Sustainable

Business Model Innovation

Why the New Competitive

Advantage Demands

Sustainability

Building Competitive Advantage

in a Sustainable World

For further information on this topic

and research, please contact BCG at:

sbmi@bcg.com

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