Leading the Digitalization of Sustainability Reporting: Change Management Strategies for Readiness under the Corporate Sustainability Due Diligence Directive - A case study of Volvo Group

Abstract

The upcoming sustainability framework Corporate Sustainability Due Diligence Directive (CSDDD) are increasing the regulatory demands on organization when it comes to sustainability reporting. To be able to facilitate readiness for this upcoming directive, improvements for digital tools are seen as one aid to enhance efficiency in the reporting process. To contribute to the current research on digitalization and compliance in sustainability reporting, this thesis explores how industrial leaders can apply change management strategies to prepare their organizations for upcoming frameworks such as the CSDDD. By examining the intersection of change management and digital transformation within the context of sustainability this thesis addresses the following research question: How can change management strategies enhance the digitalization of sustainability reporting to support organizational readiness for the CSDDD? This research question was examined through applying a qualitative case study approach to the industrial organization Volvo Group. The research question was analyzed based on the phases of framing, focusing, mobilizing and sustaining derived from the synthesized theoretical perspectives from Kotter (2012) eight step change model and Westerman et al (2014) theory of digital transformation. The findings of this thesis indicate that successful change management strategies for digital transformation require aligning vision with sustainability goals for the organization, fostering the right stakeholder engagement through iterative communication and anchoring new behaviors in a developing culture that consist of both digitalization and sustainability. To successfully achieve a digital improvement for sustainability reporting leaders should understand the specific organizational context where this change is taking place, enable cross functional collaboration, highlight early tangible result in connection to the set vision but also acknowledge that the change process for digital sustainability reporting is a continuous process. Importantly, this thesis finds that the digitalization of sustainability reporting should be guided by the sustainability initiative, rather than digital initiative to guide the sustainability agenda, to not lose initial purpose behind the change process. By exploring the research question, this thesis contributes both practically and theoretically by examining how leaders manage digital improvements in sustainability reporting in response to upcoming and evolving sustainability regulations. The practical contribution of this thesis is that leaders that stand in the forefront of a change process, to digitally improve sustainability reporting in the context of upcoming regulations, can use the findings and the structured process presented in this thesis to enhance the success of their change initiatives. Theoretically this thesis contributes by revealing the importance of contextualization, communication alignment and acknowledging the developing nature of sustainability and digitalization in managing change initiatives.