In brief: Companies are moving forward with sustainability initiatives as planned or they are adjusting strategy — not stopping sustainability efforts altogether. A Protiviti webinar provides insight into why sustainability is seen as more than a compliance mandate.
Think about:
- Why did you start a sustainability program in the first place?
- What if you methodically used your data to understand how people, the planet, your operations and your purpose are interrelated and affect each other?
- What if you continuously welcomed innovation to mature and expand your business capabilities while ensuring continuity and aiming for positive impact?
__________
It is no secret that in recent months sustainability initiatives at organizations have been overshadowed by economic and socio-political concerns, and that the recent easing of regulatory pressure may have pushed sustainability reporting lower on the priorities scale for many companies, at least for the time being. Against this backdrop, Protiviti hosted a webinar to discuss this shifting of priorities and to re-align on where organizations are, or need to be, at this point in time. Our guest speakers were Christina Beckman, Director of ESG at Culligan International; Pooja Knight, Global ESG Controller at Arthur J. Gallagher; and Clarissa Mills, Environmental Partner at Haynes and Boone, LLP.
To get a pulse check, we polled our audience on their current state of sustainability. We were pleased to see that more than one-third, 35%, said they were continuing their sustainability preparations as planned. Another 40% reported they are re-evaluating and adjusting their sustainability strategies — but not putting them on hold. Only 16% said they are pausing activities, and 10% said they are, in fact, accelerating activities. These results are contradictory to the headline-grabbing narratives around the topic. Sustainability is not going away.
What does it mean to re-evaluate and adjust?
The theme of our webinar was Back to Basics, which goes to the heart of the question “Why do sustainability in the first place?” The answer to that question has evolved in an interesting trajectory over the years, from responding to investor demands, to regulatory mandates, to customer and employee expectations. It has now arrived at a point where companies have finally begun to understand sustainability on a deeper level: as a matter of operational resilience and sound risk management even more than a compliance badge or a statement of values.
When we talk about the concept of getting back to the basics, this does not mean there has been a departure from them, it is simply an acknowledgement that now is a great moment in time to further anchor sustainability to foundational principles and strategies that ensure businesses can operate at their most effective level and remain resilient, which can positively impact the bottom line.
Sustainability = Resilience
Last year, climate and weather events accounted for $417 billion in economic losses globally, according to Gallagher Re. This is not lost on companies whose employees, suppliers and facilities have become, to various degrees, part of that statistic. During the webinar, one of the participants posed the question head on: “Given the increasing frequency of climate-related disasters and the resultant financial strain on sectors like insurance and banking, should businesses prioritize assessing and mitigating these risks to ensure resilience and continuity?” The answer is “yes.”
On this point, Clarissa Mills emphasized the importance of leaders understanding climate risk, preparing for catastrophic events and having contingency plans in place, without losing sight of regulations. Clarissa urged leaders to maintain the momentum of identifying and managing climate-related risks to minimize future impacts and decrease litigation risk.
This is true even for companies that may believe they are not at risk. Christina Beckman highlighted the benefit of conducting climate risk assessments and double materiality assessments regularly to see how those risks are evolving, and she stressed the need for continuous education within organizations regarding climate risk and related sustainability objectives.
Leaders feeling “loneliness.” They are not alone
Many sustainability leaders admit they are feeling “alone” in the efforts they lead, said Pooja Knight, stressing that it does not have to be that way. Engaging with other teams for streamlined information access, partnering with legal colleagues for regulatory guidance, and working with data analytics teams for efficient data acquisition and gathering can make sustainability a lighter load and a less lonely endeavor. Ultimately, sustainability should be embedded into business models, which will engage all aspects of the business and make everyone a stakeholder.
Our call to action: Stay engaged
We encourage leaders to stay engaged and agile, re-evaluating and adjusting their efforts as needed but not stopping them. Remember:
- Sustainability is more than a nice-to-have, it is a business imperative driving long-term value and growth. Companies that integrate sustainability into all operations will lead. Early and consistent action is crucial.
- Strong business and sustainability performance requires good relationships across the value chain. Collaboration, trust and transparency with suppliers and customers are key to meeting sustainability goals.
- You are not alone in these challenges. Collaborate with others for support, work with legal colleagues to understand regulations, and engage with your data office to use data analytics, processes and technologies for effective information gathering and insights.
- To succeed in sustainability efforts, integrate eco-friendly practices into your operations, promote environmental responsibility, and involve everyone. Set clear goals, use new technologies, and work together across teams to create lasting positive change.
“In the middle of difficulty lies opportunity.”
What if we used this moment to channel this famous quote by Albert Einstein? Instead of seeing sustainability as a challenge, what if we see it as an opportunity? Sustainability is unique in the business context: It has the gift of bringing people together. Almost every business unit within an enterprise has a role and responsibility within sustainability. Use that to your advantage to collectively drive operational excellence and resilience for your business.
Our webinar is available on demand for those who want to dive deeper into the conversation. You can also see the results of our polling questions here. To learn how Protiviti can help with your sustainability strategy, climate risk assessment or data gathering and reporting, reach out to the author or contact us.
