ESG reporting, the right to privacy in a data-driven world, and the fourth industrial revolution came under the spotlight during an inspiring first day at Ethical Corporation’s premier European event in London yesterday. Here are nine snippets
1 Lise Kingo, CEO of the UN Global Compact, said she joined the UN in 2015, when the global community had just signed the Sustainable Development Goals and, a couple of months later, the Paris Agreement on climate change. Both of them offer "amazing roadmaps" for business, civil society and governments to tackle the world's most challenging problems, and the planets seemed to be in aligned to make progress. But, she said, as astronomers know, "planets don't continue to be aligned. They have a tendency to drift out of orbit." And that is what has happened over the past two to three years, she said, alluding to devlopments since Donald Trump's arrival in the White House. Kingo said it was important for companies to have a "lighthouse" showing how they can contribute to the SDGs. But the Global Compact has to reach beyond its 12,000-15,000 members to get the message to the millions of companies that are needed to create the transformation required.
2 We are living in a VUCA world, revealed Professor David Grayson, emeritus professor of corporate responsibility at Cranfield School of Management. VUCA, a new acronym for most delegates, stands for volatile, uncertain, complex and ambiguous. For the British members of the audience, Brexit is the epitome of a VUCA issue, he said, but it merely adds an extra dimension to the challenges we already face: “How will 9bn-10bn people live within the constraints of one planet?” he asked. “What do businesses need to do to ensure they have the best prospects of prospering in future? They need to go all in on sustainability.”
3 The supply of environmental, social and governance information outweighs its demand, said Tim Mohin, chief executive of the Global Reporting Initiative (GRI), not least because sustainability reports are not yet fit for purpose. “We don’t need 150-page reports with pictures of children planting trees,” he said. “Reporting needs to be concise, current and consistent.” However, the advent of the Task Force on Climate-Related Financial Disclosures (TCFD) will increase demand for sustainability information, he added. “Mainstream investors are becoming interested in this because it shows where value exists in companies.” Ultimately, he concluded, “it’s not about the report, it’s about what we do with this information to make the world a better place”.
4 We live in a data-driven world, but recent events such as the Facebook/Cambridge Analytica scandal highlight the need for users’ freedom of expression and privacy to be treated as a basic human right, argued Rebecca MacKinnon, director of the Ranking Digital Rights project. Only two companies in the ranking scored more than 50%, she said. As a global information ecosystem evolves, “if we want that to develop in a way that is compatible with human rights, we need to ensure it is governed in a way that is compatible with these values”.
5 Artificial intelligence is going to have a profound impact on business and society, but no-one is really sure exactly how, so the scare stories that are circulating are overblown, said Rohit Talwar, CEO of Fast Future. “We don’t yet know what will happen and what the impact will be of technology not yet created on jobs that don’t yet exist,” he said. Basing a strategy on some of the reports on how many jobs will be lost (47% of all jobs in the US are at risk from automation, according to one study) is like bringing Donald Trump into a team-building session, he added. Nonetheless, we need to prepare for AI. “The worst thing we can do is sit back and use hope as a strategy.”
6 The Sustainable Development Goals (SDGs) provide a playbook for companies to drive forward their sustainability strategies, said Per-Olof Loof, CEO of US electronics company Kemet Corporation. Loof revealed that Kemet, though it has worked on environmental and social issues for many years, particularly in its supply chain, had not heard the message about the SDGs until very recently. The company has now embraced the SDGs and is working on aligning them with its business strategy. However, he stressed, to get investors on side, “you have to meet your quarterly targets. We have to run a profitable business, but we have to do it in a sustainable way”.
7 The TCFD is starting to spur regulation, reported Simon Messenger, managing director of CDSB (Climate Disclosure Standards Board). “It’s voluntary right now, but all the signs are that it will become mandatory fairly quickly,” he said. Yet companies have failed to grasp fully the implications of the recommendations and there is a huge gulf between oversight and action. Companies are not recognizing climate risk properly, which makes it difficult for investors to allocate capital appropriately. And even when companies do produce information for investors, they often fail to make use of it internally, said Rodney Irwin of the World Business Council for Sustainable Development (WBCSD). TCFD may change this because it involves all parts of the business, ideally under the oversight of the CFO.
8 A range of digital technologies will transform the way the world works in years to come as the fourth industrial revolution takes hold and connects physical assets and cyberspace, said Ruptesh Pattanayak, Director for Industry Solutions, Manufacturing & Resources at Microsoft. “The insights we are getting from the huge amounts of data that are now available to us are setting up totally different ways of doing things.” As more physical assets are connected to the cloud and start to talk a common language and connect seamlessly, information that was previously siloed in individual departments can now be leveraged to improve operations around the world. And while individual technologies can bring 4-5% improvements in efficiency, in agriculture, for example, if you put them all together and sensorise the entire agricultural value chain, you can increase yields by an astonishing 67%, he said.
9 ICT can be a key driver for sustainable development, particularly in emerging and developing markets, said Victor Zhang, president of global government affairs at Huawei. “We have a vision for sustainability as a tool to connect the future,” he said. “We are going to bridge the digital divide and deliver solutions to make the world greener.” The spread of mobile phones has meant not just that people can stay in touch with each other, but also trade and transact, access health care and education, even if they are among the world’s poorest, he said.
See also Nine takeaways from day two of Responsible Business Summit Europe 2018
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