A recent survey found that two-thirds of global executives believe the COVID-19 pandemic has prompted companies to step up their commitment to environmental, social and governance (ESG) initiatives. But the same survey conducted by the Project Management Institute (PMI) shows that more than two-thirds of people don’t know where to start.
so luckAt the Impact Initiative Summit in Atlanta on Tuesday, executives discussed the myriad challenges companies face when implementing ESG policies, from political blows to the difficulty of measuring success. One point all panelists agreed on was that knowing exactly where to start with an ESG initiative is not as important as simply getting started.
Joe Cahill, chief customer officer at PMI, cited another IBM survey of C-level executives released earlier this year that found that 85% of business leaders surveyed had a sustainability strategy in place. Yes, but only 35% say they have started implementing that strategy. “And when I was [November’s United Nations Climate Change Conference, COP 27] Talking to people, they say 35% is probably very high,” says Cahill. “So there’s a bit of a reliability gap there.”
The gap between corporate intentions and actions on ESG issues quantifies the effectiveness of ESG initiatives and impacts many issues under the broader ESG umbrella (carbon emissions, biodiversity loss, income inequality, board – Prioritize. Transparency and accountability are also major challenges. Especially as regulators such as the SEC consider new rules requiring companies to disclose climate change risks associated with their operations.
The panel agreed that accountability is both a compliance issue and a data issue, a problem that will not be easily remedied. Scope 3 emissions — carbon emissions generated by other sources up and down the value/supply chain, rather than generated by the company itself or indirectly by assets under its control — are difficult to measure is famous for “People need to be convinced that when we say we’re doing something, we’re actually doing it, and we need to be able to track it over time,” Pfizer said.
Conferences like COP 27 often end without implementing the much-desired global climate action, but there is a big move to standardize global metrics for corporate climate governance.
Peter Bakker, Chairman and CEO of the World Business Council for Sustainable Development, said: “Most of us need to have some form of science-based net-zero goal. and only 7% of transition plans are on track to meet their emissions halving target for 2030. The commitment is there, and that’s fine, but it’s important to note that companies are not progressing. The word I took from COP27 is ‘accountability’. It’s at the forefront right now, and companies need to prepare for it. ”
Climate change tends to dominate most ESG discussions, but the COVID-19 pandemic and the simultaneous calculus of inequalities in the United States and elsewhere have forced many companies to divide “social” and “governance”. The issue has become a clear focus. “In social issues, there tend to be many different views of what is good for things like climate where we can agree on how to measure mass emissions. Walmart Chief Sustainability Officer .
Addressing social issues, however, can expose companies to political or social backlash, while the key challenges of the social category, namely human rights, living wages and skills in the workforce of the future. All of these (apart from the obvious humanitarian aspect) have implications for the supply chain. It also requires companies to plan and act, Bakker said. “I would argue that rising inequality is perhaps a greater crisis than climate change,” he said, noting that the lack of social cohesion is creating all sorts of unpredictable and unpredictable consequences for both people and businesses. I pointed out that it usually leads to negative results. “Business needs to be at the forefront of this.”
Whatever company chooses to approach ESG, the best time to start is now. Companies that attempt to map the entire route towards net-zero emissions or utopian social harmony before embarking on the journey never set off and risk being left behind in the process.
McLaughlin shared an anecdote about Walmart’s efforts to measure its environmental impact and chart a responsible course. This included assessments by both Deloitte and McKinsey, as well as conversations with the World Wildlife Fund, the Environmental Defense Fund, and other groups focused on climate change. The company has collaborated on many sustainability initiatives.
The gist: “In conversations with them, they said, ‘Look, the most important thing you should do is just get started,'” she said. “‘Take action now.'”
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