From research we know that boards of directors lack skill and expertise when it comes to ESG and Climate Issues.
But: certainly the asset owners and investors do see that point, and are worried about boards taking tangible action that would safeguard their assets?
This is precisely the question that ShareAction asked in their most recent report.
The insights are sobering. Particularly the Big Three asset managers (BlackRock, Vanguard, State Street) have a miserable voting record during AGM season: both, for the number of votes cast, as well as for their stance against most resolution on Climate Change and Human Rights.
The good news: it rarely has been so simple to identify Greenwashers. Thanks to publicly available filings about votes cast in AGMs of listed companies.
JoinedMarch 22, 2010
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My passion: ‘Future Fit’ Business as a Force for Good.
Corporate Responsibility expert for consumer goods, FMCG, fashion, textiles.
INSEAD IDP-C certified non-executive board director.
An NGO comes after you – for the right or the wrong reasons.
A journalist publishes an article. The content: inconvenient truths, or equally inconvenient fake news.
Or simpler: The staff churn in your company is way above average. And no one seems to know why.
The meetings, the clashes, the disagreement, the blaiming that comes with it. Yes, been there, done that.
Thankfully, there were times I was not a party in the conflict. Instead I was assigned the (ungrateful?) task of figuring out how to resolve it, build bridges, and ‘get stuff done’. Not just once, but a few times.
What initially was of me ‘winging it’, over time – with trial and error – turned into something more structured. Still not perfect – it never will be, there is always room for improvement – but a flight-by-instrument rather than a blind adventure.
This post is my first try at illustrating, verbalising, this process.The steps I use, and what their intention is.
With the hope of it being as useful to others as it is and was to me.
In an earlier post I asked: How can business, a business, downscale the Doughnut and make it operational?
In this post I look at three tools that praise themselves of being either part, or even all, of the support a business needs on the journey to integrate the Doughnut Economics concepts. Namely: Science-based Targets (SBTs), the B Impact Assessment(BIA), and the Future Fit Business Benchmark (FFBBM).
What are their fundamental differences and similarities?
Are they indeed a tool to help on the path to keeping within the Doughnut boundaries?
Over a decade ago, Simon Sinek pointedly demanded: Start with Why.
Targeted at a then rather uninspiring marketing and branding industry, 10 years on is still as valid as ever.
Just now, we need to ask businesses: Why are you bothering with investing millions, and thousands of hours into sustainability?
Often the answer will be: because we have to. An answer just as uninspiring as the sales slogans Sinek was bashing a decade ago.
Because when it comes to Sustainability: Know your genuine Why. Or don't bother.
Consistency is one of those traits that is coveted by business journals and business leadership as possibly the most important ingredient in leaders. For a simple reason: Consistency — whether good or bad, positive or negative — provides the business, its employees, and stakeholders with a known quantity.
But what is often forgotten: A leader is never, ever made over night. It is a life long process. And just like a relationship, the accumulation and significance of small little things that are done over and over again is more often than not underestimated.
On May 24th 2020 Rio Tinto blew up the Juukan Gorge rock shelters in Australia, which ancestors of the Puutu Kunti Kurrama and Pinikura (PKKP) people occupied over the course of 46’000 years.There are a multitude of lessons to be learned from the entire process that lead to the disastrous blast of a site of such archaeological importance. But also from how the scrutiny in its aftermaths and the have been.
Here a selection of just a few to think about.
Greenwashing is defined as 'the expression of environmentalist concerns especially as a cover for products, policies, or activities'. There also exists Diversity-washing, Governance-washing, or skill-washing for example.
In itself a truly nasty thing, there is an unexpected upside to Greenwashing however: it will come back to haunt the greenwasher. Maybe not fast, but no doubt steadily. Just like the tortoise won the race against the hare.
In mountaineering there are three distinct methods to handle the rope. Each technique has some distinct application characteristics. And as a consequence, a direct impact on the team work, team effectiveness - and even survival. What can boards learn from alpine roping techniques?
Over the last 12 months, the Doughnut Economics Action lab developed a methodology – denominated ‘Creating City Portraits’ - , tested in three different cities of the global North. So the question is: Could the methodology work for business too? The answer: Yes in principle. But commitment is at the heart of it.
Many of the most important resources our current civilisation depends on – all of them finite natural resources - form part of what historically would have been called ‘The Commons’. And yet, many of them are economically treated as 'income' and not the valuable and finite 'assets' they are. That again is the tragedy of the commons.
Diversity and Inclusion is a highly relevant topic not ‘just’ because it is all about equality and justice. But as long as entire parts of our global population remain disenfranchised, and desperate to just survive from day to day, tackling challenges - and in particular Climate Change - that affect all of us, indiscriminately, remains impossible. Boards of Directors set out the "Tone at the Top', also in matter of diversity and inclusion. In fashion companies, what exactly is the tone, the music, that they are creating?
‘System positive’. The latest term I came a cross in the finance world, and which intends to identify business that are particularly well set up to survive the tribulations to be expected in the decades to come. Immediately the cynic in me asks: Another addition to the sustainability bullshit bingo?
And yet: the 5 questions proposed for scrutinising companies are very sharp, very relevant and very insightful.
They only fall short of one: Will the company thrive within or even thanks to the Doughnut Boundaries?
Financial accounting is rather ill suited as well as ill equipped to deal properly with a system that has finite natural resources. Else, why would it not record the environmental losses that come with e.g. extracting bauxite? And what about ESG? Well it turns out, ESG is just more of the same (growth) just in a shade of ‘green’. It is for a reason that the Global Materials Footprint has kept growing in alignment with the much coveted GDP growth. Despite all green efforts. ESG – investing in ‘greener’ tech and businesses – is definitely NOT ‘Sustainability’ as we need it.
The world, by and large, operates based on land-filling. The only way to improve the situation any time soon is: not to landfill. At all. Or at least as little as possible, and that asap.
To that extent, 2 reports on textiles the circular economy have been published, both of which look at the issue from different, and complementary perspectives.
What is it that we can learn from these 2 reports, side by side?
One, the old adage could not be any truer: One Man’s Rubbish is another Man’s Treasure. And: True cost accounting would make a huge difference.
Research has known for a while that when someone in your presence is trying to think, much of what you are hearing and seeing is your effect on them. That is also the case for boards.
Because: under the right conditions and circumstances, people will – invariably – think for themselves. Just: is that desired?
In July 2018 Australian Billionaire James Packer resigned from 24 boards in total where he held directorships. His spokesman in a statement announced that Packer was “suffering from mental health issues” and was seeking treatment for depression. Packer is not a lone case.
Climate Anxiety can be a trigger to mental health challenges - for fear of the future and well-being of loved ones. Creating boards that are able to open up about doubts, challenges and concerns is like adding a booster gear to their functioning, reaching deep into an individuals motivation and passion. It also could add a whole new dimensions to professional discussions and help to ask harder, but equally necessary questions to the executives running the day-to-day business.
There are two approaches on how we can define of what is viable and desirable for our global economy.
In one, the 'soft attributes' and non-physical factors such as consumer desires, lifestyles or distribution of goods are a fixed attribute. In the other, quantifiable, physical attributes - amongst them natural resources - are fixed.
The challenge of boards in this time and age: Recognising that the first - the present - is failing. And outlining the path towards the second.
Fairy tales are typically something for kids. Particularly young kids. Over the centuries they have been used to convey fundamental social mores, warnings from danger, and to inoculate a shared understanding of what ‘good’ and ‘bad’ looks like. These characteristics though make fairy tales an ideal, if very uncommon, vehicle to convey information and learnings also in management literature. This book hence is a rare find.
The cat is – long-time coming - finally left out of the bag: while drawing up a Covid19 recovery package, EU legislators have decided to introduce a levy on non-recycled plastic as per 1st of January 2020. Reading through the text, two points offer a considerable surprise: The short notice, the wording, and the focus on packaging.
But how come that legislators seem to drive the industry R&D agenda? Here a few questions for boards to ask their CEOs to get to the bottom of this.
The supply chain.
It has been accepted a long-time ago: supply chain is a risk. Or better: a RISK in capital letters.
But also a word that sounds impersonal. Very akin to a factory being a cogwheel in a much larger clockwork. And while the definition of the term does list ‘people’, the focus is very clearly on the idea of it all being a neat system of seamless interactions.