Four Takeaways from GreenBiz 22
Stat of the Week
According to the 2020 Global Sustainable Investment Review, $25.2 trillion of assets under management included ESG integration/analysis and $15 trillion included negative/exclusionary screening (meaning, certain sectors and companies are excluded based on inherent characteristics or their ESG profile). — Global Sustainable Investment Review, 2020
This year’s GreenBiz, was a real statement on the quality of that particular event and on the surging importance of all things ESG to both public and private companies. While other events are canceling or pushing to later in the year due to Covid-related corporate travel restrictions, GreenBiz saw its largest attendance ever. That’s really, really good news! The other good news is that deep, meaningful conversations and challenges were happening across the main stage and panel discussions. Here are four takeaways I left Phoenix with:
- Investors want the “how.” For a long time, the sustainability community has favored the idea of putting bold goals “out there” and saying, “we don’t know how we’re going to achieve them but putting them out there means we have to figure it out.” It sounds like that’s not flying with investors — and that’s a good thing. In short, declaring that your company will be carbon neutral by 2050 without an interim 2030 or 2035 goal and a specific plan on how you’re going to achieve your goal just won’t cut it anymore.
- Net zero isn’t good enough. Speaking of a plan to be carbon neutral by 2050, Paul Polman, Unilever’s former CEO, said that’s the wrong target. All companies need to be working toward net positive, and they need to get there now. He pointed out that less than 10% of the largest companies in the world have set science-based targets for 2050 and less than 8% have 2030 targets. That means they’re neither satisfying investor demands for specifics (see previous bullet) nor making the kinds of commitments that will actually ensure a sustainable future.
- CEOs need to be working on changing the system. If you’re a regular reader of our blog, you know we are fundamental believers in (and practitioners of) defining and leveraging a corporate sustainability story to drive brand preference, sales, employee loyalty and investor outcomes. That is still very much the case (and Chris Haasen from S&Z and I covered this ad nauseum in a three-hour workshop at GreenBiz). But Paul Polman pointed out that much of what is needed is system change. I certainly see that in our work with clients — there are indeed limits to what any one company can do. I also see many companies use that as a talking point, “We know we can’t get there alone.” But Polman pointed out that CEOs need to be driving system change and that, in his experience, about 25% of CEOs and companies can indeed change an entire system. I can also tell you that we need 25% or more of CEOs actively advocating on Capitol Hill for the legislation necessary to level the playing field for everyone on climate and on waste. Shockingly, many of the same companies with 2050 carbon neutral goals are reticent to visibly advocate for legislation that would help change systems and create funding for the fight against climate change (like the Build Back Better Bill currently stalled in Congress). In short, ensure your CEO is at the table in meetings with regulators, lawmakers, suppliers and other CEOs; don’t rely on your trade association to take action for you; and don’t relegate system change to VPs and directors. When CEOs show up together, it sends a powerful message and change happens.
- We’re almost halfway through the timetable to accomplish the UN Sustainable Development Goals (SDGs). I hadn’t actually realized that until it was pointed out by Heather Clancey on the main stage. The 17 goals were adopted on January 1, 2016 and the idea is to achieve them by 2030. I regularly encounter companies that are still working on aligning their actions with the goals, and there’s never any discussion that these are supposed to be achieved by 2030. If your company is publicly on record as “aligning with” some or all of the UN SDGs, you need to start mapping out what you can actually achieve in the next eight years and start collaborating with other companies who are aligned with the same SDGs to create real progress. Otherwise, those little colored boxes you’ve been putting in your sustainability reports for the last several years are nothing more than greenwashing.
— Harvard Business Review
Until recently, there hasn’t been a set of standards to compare one company’s ESG reporting to another. This Harvard Business Review article details how the International Sustainability Standards Board will help standardize ESG reporting and how long it might be before these standards are set.
As the significance of ESG to investors increases, the need for consistent and regulated ratings across all businesses is becoming more necessary. This WSAU article discusses why and how parties in Britain are working to establish set standards for ESG reporting.
Shoptivism: Why Consumers (& Job Seekers) Opt In & Out of Today’s Brands
Sustainability is now mainstream and it’s affecting purchase behavior.
Every year we ask Americans if they’ve ever intentionally purchased or not purchased a product or service based on the social or environmental record of the manufacturer. We then ask everyone who says “yes” to name the brand. Those who say “yes” and can give an example of a brand unaided? We call them shoptivists.
But who are these “shoptivists?”
Our latest report answers this question with three distinct consumer profiles, including details on their mental models, their shopping patterns, the messages that resonate, and where to find them.