Responsible Business Summit challenges organizations to lead the change to a more sustainable future
In this, the fourth industrial revolution, come new technologies and trends which are transforming the way we do business and prompting more companies to lead the change. Toward this end, I recently attended the Responsible Business Summit West conference which focused on ESG Disclosure, Climate Action, and Social Impact.
#RBSWest provided a great opportunity to stand beside and learn first-hand from more than two hundred CEOs, sustainability leaders, investors, government representatives and NGOs about the newest advances in sustainable innovation, the implementation of socially responsible business initiatives and the use of technology and data to move us towards a cleaner, more inclusive and transparent economy for people and planet.
The conference highlighted keynotes on Living Wage, Environment, ESG Disclosure, Circularity, Plastics, and Supply Chain as well as several break-out sessions within these realms. Resonating takeaways centered around purpose-driven business to drive positive impacts; the importance of utilizing technology and disclosing accurate data; the need to develop technologies and circular strategies that accelerate the transition to a low-carbon economy; and how conserving the environment can also drive positive impacts and deliver business success. Here are key takeaways from select conference keynotes.
ENVIRONMENTAL Focus on the role of technology & innovation in solving environmental challenges
The impressive speakers keynoting this panel including Amit Kakkad (Clinical Professor, University of San Diego School of Business), Alex Morgan (Chief Markets Officer Rainforest Alliance), Lucas Joppa (Chief Environment Officer, Microsoft), and Kristina Kloberdanz (Chief Sustainability Officer Mastercard) brought to light the significant role that advancements in technology play in addressing environmental issues of today. The leaders at Microsoft and Mastercard especially spoke of the need to reverse the trend of borrowing from the environment (i.e., climate crisis, deforestation, soil fertility) to pay for our economic future. In order to do this, organizations need to be transparent about their impacts via disclosure of material and quality information.
The profound transparency of sustainability data demanded by stakeholders can be viewed as incurring a risk, but those companies that begin with understanding and acknowledgement of their current state of sustainability metrics will be better equipped to address their sustainability challenges of tomorrow. This understanding is only achieved when transparency and disclosure is embraced and a backlog of environmental data with the same degree of quality/transparency as that of economic information is built. Microsoft, for example, has employed this approach to building a significant backlog of data, which has enabled the organization to put a tangible price on carbon, and quantitatively demonstrate how they are moving the needle.
While data and technology are essential in supplementing sustainability and climate solutions, they alone cannot be expected to solve the environmental issues we face. However, utilizing data and technology to integrate sustainability into your business provides the opportunity to make relevant significant positive progress and impacts.
Environmental, social and corporate governance (ESG) are three central factors used in measuring the sustainability and ethical impact of an investment in a company or business. These factors help to better determine the future financial performance of companies, and climate competency must be a prevalent skill in amongst Boards. This panel confirmed and emphasized that the interest from the investment community in ESG disclosures is growing at a rapid pace.
Moderated by Brian Tomlinson Research Director, Strategic Investor Initiative, Chief Executives Corporate Purpose (CECP), with panelists Tim Ring, Chief Sustainability Officer at MetLife; Betty Yee, State Controller, at the State of California, Bruno Sarda, President of CDP North America; Robert Hirth, Co-Vice Chair at SASB Standards Board this panel brought forth how the S (social) + G (governance) of ESG are bringing new questions and challenges to the forefront for investors and companies. The shift is requiring ESG disclosures to be more cohesive and to be communicated with greater transparency than ever before.
CIRCULARITY Closing the loop to shape a new economy
The concept of a circular economy is only as tangible as the data and drivers built to support it. Thinking outside of the linear trajectory of our current products and services economy will be essential in the coming era of circularity. However, making the case for a macro shift of this scale has its challenges, as discussed by panelists Christopher Wellise, Chief Sustainability Officer at Hewlett Packard Enterprise and Marcel Jacobs, Co-Initiator, Arctic.
As a whole, the current economy does not pay for the true cost of goods. Wellise emphasizes that we’ve failed to build externalities into true costs of goods, enabling an unsustainable goods economy.
Consistent with themes breached earlier in the conference, data can be the key to understanding the real impacts, both positive and negative, and where exactly in the linear economy they occur, to ultimately strive for progress towards a circular, sustainable, economy.
TRACEBILITY & TRANSPARENCY Tier I and Beyond & Transforming Supply Chains through ambitious collaborations
To understand the breadth of environmental impacts from organizations and industry, assessment must go beyond the four walls of site operations. The vast majority of these impacts are curated throughout the supply chain and ignoring them creates a false understanding of their reach, scale, and severity. Stakeholders, most importantly customers, are not letting these impacts go ignored any longer. They are calling for increased transparency throughout supply chains and accurate traceability of impacts.
Achieving the necessary level of supply chain transparency to address true environmental impacts, however, is no small feat, and is often referred to as the most challenging component of environmental accountability. Organizations are attempting to respond to stakeholder requests, and suppliers must, in turn, respond to customer inquiries, adding a difficult ask on top of an often already overloaded workday.
If approached correctly, however, digging in to enhance the traceability and transparency of your supply chain can ease this burden, and even unveil potential opportunities for upstream and downstream efficiencies. Panelists provided key insights into what ‘correctly approaching’ supply chain transparency might look like. Ensure that suppliers understand the ask, and more importantly, the WHY for requested information. Provide feedback to suppliers after responses are returned to show acknowledgement of their efforts to help YOU to enhance transparency, and even implement the proven practice of supplier awards to take this acknowledgement and engagement even further.
“Ask, Analyze, Celebrate, Collaborate,” is a fantastic summary of concepts to build supplier engagement to ultimately reduce your organization’s and supply chain’s negative environmental impacts, and even create efficiencies amongst all players.