5 minWhy sustainability is so central to corporate strategy. Interview with Charles Sunnen
Charles Sunnen Banque de Luxembourg is holding a series of workshops to mobilise companies and business leaders and help them address the pressing challenges of sustainable development. Interview with Charles Sunnen, Corporate Advisor, to discuss this initiative.
Why has the Bank become involved in workshops that foreground sustainable development?
Charles Sunnen (CS): We have to go right back to the origins of the department to understand the background. The Banque de Luxembourg has deep roots that go back more than 100 years. It deals with three main types of clients: private clients, finance professionals and businesses.
Our department was formed to provide services to a client base that is primarily made up of second- or third-generation family businesses, based in Luxembourg for the most part. These are mid to large companies active in the Grand Duchy’s traditional sectors: construction, industry, craft industries, retail, transport & logistics and supermarket distribution.
In addition to routine banking services, like current accounts and day-to-day flow management, our clients also have other medium- and long-term requirements, including cash-flow needs, bank guarantees, development financing, and project, equipment or real estate financing.
Why offer them sustainability workshops?
CS: The Banque de Luxembourg is a certified B Corp organisation (a label awarded to companies that meet very demanding social, environmental, governance and transparency criteria). To deliver on our certification commitments, we work at raising awareness amongst our current and prospective business clients about climate, social and governance issues.
The certification – which we obtained in 2023 – encourages the B Corp community to spread the word and rally all their stakeholders and employees around these values. That's why we worked with TrAxxion, experts in corporate social responsibility, to co-design and co-deliver an engagement programme.
The aim of the workshops is to help companies as they start, continue or give new impetus to their engagement journey, based on a robust set of values, such as the B Corp principles. The workshops are a forum for dialogue, inspiration and co-creation with peers.
Can you explain how they work?
CS: Once a month, participating company directors meet either at the Bank or another company for a morning-long session. Every workshop tackles a B-Corp impact issue, such as governance. After an overview of the topic, the participants break up into smaller groups to discuss a specific question. The focus is on discussion and sharing best practice. The workshops also build in self-assessment over the course of the programme so participants can measure their progress..
The workshops deepen our clients’ understanding of the challenges of sustainability for family businesses and the requirements of current and upcoming regulations. Participants also put together an action plan tailored to their own company.
How does sustainability drive company performance?
CS: It’s vital that we get the message across: sustainability is more than a buzzword. It must be at the heart of corporate strategy. Small and medium enterprises (SMEs) are the bedrock of the Luxembourg economy. They account for 99% of the number of companies in Luxembourg, employ 66% of the labour force and generate 66% of the economy’s value added.
Right now, big companies are dealing with big issues: ethics, climate change, scarce resources, and, from 2026, the European Taxonomy for sustainable activities (classification of economic activities that have a positive impact on the environment). And while these large corporates will have to organise cascading sustainable supply chains, these new rules will also have a major impact on their SME suppliers.
We also know from what people tell us that end customers are keenly attuned to responsible business practices. And they’re willing to pay more for a sustainable product or service. This focus on sustainability really comes to the fore in calls for tenders and when hiring new staff.
We try to demystify the main CSR concepts, to explain that it is easy to take action, that there are very practical steps to take, and that sustainability is a positive for a company’s business model.Charles Sunnen
What advice would you give a company starting off on its transition to a more sustainable model?
CS: A first step would be to download the questionnaires available online, including from B Corp. It is very easy to complete an impact self-assessment and set a challenge.
Most companies already have a set of CSR actions in place, but may not be aware of them. I advise companies not to be apprehensive. If need be, support is available – our workshops are a good example.
It’s important to emphasise how vital it is for management to be actively involved in corporate social responsibility. They set out the vision and strategy and take the decisions that ultimately have an impact. Sustainability is not a matter for just one department, even if that department plays a key role. Nothing beats a committed and engaged senior decision-maker when it comes to bringing the people in the organisation on board.
How does the approach work in practice?
CS: Through our programmes and other initiatives, our mission is to help companies and the wider community wake up to the fact that we are living through an irreversible paradigm shift. If we all understand how environment, social and governance aspects are tightly interlinked and interdependent, we will shift mindsets and create systemic change. That would be a good start. History will show that there’s more to life than turning a profit.
We try to demystify the main CSR concepts, to explain that it is easy to take action, that there are very practical steps to take, and that even if we’re a small country, we all have a role to play to achieve the UN Sustainable Development Goals (SDGs).
Take access to credit for example, which is one of the SDGs. We offer financing that takes account of the borrower’s environment, social and governance strategy. In a nutshell, the interest on the loan reduces as the client meets certain jointly set objectives. Products can be reshaped to generate a positive impact.
Even more crucially, meeting loan commitments requires sustainable cash flow. Ignoring ESG issues is a risk factor. Building in sustainability ensures the product is profitable over the long term.
To wrap up, these are pressing problems for each and every one of us. And we can all help make a difference. During the workshops on the theme of “Sustainable development as a value creator”, I discovered that companies are aware of what is at stake, but may not always know that they know. We support them in the steps they are taking and promote shared values to work towards a common goal.
