GreenBiz 2022: Driving forward

Corporate responsibility builds in the wake of war

Russia's invasion of Ukraine is leading more companies to evaluate and clarify their position when it comes to operating business in a country with an autocratic regime. Some companies have severed ties whilst others maintain operations. In any case, there is mounting pressure on companies to define and articulate to stakeholders what they are doing and not doing in terms of environmental, social and governance (ESG) issues.

This builds upon the growing awareness that a company is impacted by and impacts society and the environment, a dual-consideration that sustainability or ESG (environmental, social and governance) professionals could have explained years ago (i.e., double materiality). As the pressure mounts on Boards and Executives to articulate how a company’s purpose aligns with business strategy, companies require deeper expertise and enhanced oversight of what is now commonly referred to as an “ESG” strategy. 

Such as it is, I’m reminded of last month’s GreenBiz conference which was held in sunny Scottsdale, AZ and where sustainability/ESG leaders demonstrated their unique position as central to leading the next wave of business to build back better. 

For many of us, this was our first in-person convening since the pandemic started. I saw and felt these relationships that had existed purely in a virtual setting flourish in focused breakout sessions, casual (and courageous) conversations, meals (mostly vegan), libations, after-hours dancing, even bathroom brush-ups. 

Here are a few key themes I took away from the reunion:

Back to school for materiality: Enforcement is here

The climate crisis and lack of transparency around ESG data has led to more scrutiny on business resilience strategies, corporate governance and disclosures. Organizations are evaluating and developing better methods for identifying and reporting their material and emerging risks. 

New regulation abroad (e.g.,CSRD/SFDR) and serious signals in the US (Could we see Climate risk in more companies’ 10-Ks??) has catalyzed business leaders everywhere to reset and adopt a more diverse stakeholder perspective, ushering in the next wave of business with an ESG lens.  

In other words, the materiality principle has changed and will continue to evolve with new guidance from policymakers on how to manage and report on emerging risks such as Climate, Diversity, Human Capital Management and the list goes on… Learn more about ESG-related regulatory developments by downloading the last edition of Datamaran’s Policy Brief, published quarterly with expert commentary from the international law firm, DLA Piper. 

Technology can help to advance corporate strategy 

As expectations from regulators, investors, customers and business partners quickly evolve, companies require a more dynamic and robust process to identify material issues and monitor external developments. Leading companies will be those that embrace innovative technology to capture and communicate real-time information with data-backed analysis. 

“I reached out to Datamaran because we had promised our board that we were going to develop an ESG strategy by the end of the year,” Byron said. “I knew that Datamaran could help us out. Quickly and efficiently, we were able to do materiality in a very short amount of time. And Datamaran continues to be incredibly useful as we finetune this strategy, which we are happy to report got approved by our executive leadership team and our Board of Directors by the end of the year. This was no small feat.” - Byron Austin, Head of Corporate Responsibility & ESG Management at Organon. 

In a time when decision-makers must navigate a changing landscape and meet the rising expectations of a multitude of stakeholders, having a tech-enabled solution that provides access to reliable, decision-useful data is a business imperative. 

Cultivating collaboration in the workplace

Throughout the conference I heard Joel Makower reference F. Scott Fitzgerald’s notion of first-rate intelligence which is holding two opposing concepts in mind while still functioning. This kind of duality presents its own challenges and seems to resonate with many business leaders today. The act of balancing between long-term goals and short-term tactics, and the tension that inherently builds whilst having competing priorities, requires not only more reliable data but also emotional intelligence to drive progress. 

Research shows that the psychological safety we create amongst and in service to each other determines how effective and successful we are as a collective. In this way, our capacity and willingness to be human or vulnerable in the workplace plays a massive role in accelerating us to better shape the global impact of and by companies operating around the world. 

While Chief Sustainability Officers were at the heart of the GreenBiz conference, there was also a variety of subject matter experts, academics, policymakers and NGO representatives. This diverse attendance to me demonstrated how combined expertise is integral to advancing a business’s sustainability/ESG strategy across the value chain.

There is more attention and responsibility on companies to set ESG goals (got Science-based targets??) and deliver with stakeholder-driven metrics, now matching the level of ambition from people who’ve been nursing their “sustainability children” or “ESG babies” their entire careers. Through shared practice and open dialogue, our community of sustainability and ESG professionals can help provide deep expertise to Boards and Executives on issues related to the environment and society.