Currently, businesses in Europe and beyond are grappling with changing regulatory frameworks, economic turbulence, rapid price increases and supply shortages. All the while, the imperative to accelerate the transition to a more sustainable future has never been greater.
This year’s Responsible Business Europe 2023, held at the Novotel London West, brings together over 500 sustainability, financial and government leaders to navigate near-term pressures without detracting from long-term sustainability goals.
Bolstering biodiversity
With the 2030 climate target fast approaching, it’s essential that businesses are actively targeting lower emissions throughout their supply chains. However, a repeated theme throughout the first day of the event was a warning against what Musidora Jorgensen, Chief Sustainability Officer, Microsoft, called “carbon tunnel vision.” Many of the speakers at the event highlighted the need to widen the sustainability focus to include biodiversity, something which until recently has been largely overlooked.
The session on ‘Embracing regenerative business practices in the quest to net zero’ explored this in-depth, highlighting initiatives such as the 30×30 initiative and the need for businesses to measure their dependencies and impact on nature. After all, as Isabelle Sultan, Chief Sustainability Officer, Parfums Christian Dior, outlined, around 50% of global GDP is dependent on ecosystem services.
Mark Griffiths, Managing Director EMEA, Climate Impact Partners, explained that the market is moving toward climate action on biodiversity and cited reforestation projects in Colombia as an example of this. There, indigenous species are being planted; Griffiths explained regenerating land sequesters carbon and encourages biodiversity. Likewise, he referenced similar projects in Africa, focusing on planting bamboo, which he said adds a revenue source for local communities while bolstering biodiversity. Indeed Sultan highlighted the importance of prioritising people as well as the planet and evaluating supply chains to ensure that ethical nature approaches match social impact. Likewise, the importance of a ‘just’ transition was repeatedly highlighted, with the S of ESG a vital consideration.
Griffiths added that the voluntary carbon market, through projects like the above, can enhance revenue and brand loyalty while mitigating risk. “Taking action early will benefit you,” he said.
Meanwhile, Sultan urged companies to be “bold” – Griffiths echoed this, noting that speed and action are critical, and called for more to join the so-called “green arms race.”
Standardisation, collaboration and reporting
While in Europe, regulation around sustainability is ramping up, panellists were unified in their call for greater standardisation. Wouter Kolk, Europe & Indonesia CEO, Ahold Delhaize, for example, noted that for systemic change, industry-wide standards are an imperative; knowledge-sharing across industries was also highlighted as central, as was collaboration. Regarding the latter, Kolk said this is particularly essential with regard to Scope 3.
Businesses will also need to prepare for the wave of incoming regulatory changes, for example, the introduction of the EU’s Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Due Diligence Directive (CSDD). Comparatively, while there are growing regulatory pressures on companies in the MENA, the legislative framework is not yet as robust and developing more slowly.
Panels also explored the evolution of the ESG reporting landscape, especially in light of upcoming regulatory changes and, critically, balancing reporting with action. Here, speakers including Richard Hall, VP General Secretary UK&I, Danone discussed investment in data systems to streamline reporting, something that was explored further in the Technology and Net Zero workshop. In this session, Oriol Margo, Sustainability Transformation Leader EMEA, Kimberly-Clark, commented that AI could help facilitate data analysis.
ESG data processing and analysis was also something that Magali Anderson, Chief Sustainability & Innovation Officer, Holcim, explored in the ‘Embedding sustainability across the business’ keynote. Anderson suggested that businesses’ finance departments should deal with the data side of things, to leave sustainability teams to focus on implementing change.
Balancing planet protection & profit
The panel on sustainable growth saw Juan Jose Freijo, Chief Sustainability Officer, Brambles and Sandrine Sommer, Chief Sustainability Officer, Moet Hennessy, discuss how sustainability does not have to come at the expense of profit. In fact, the two presented examples of how it can boost profit in the long term.
Of course, as the panel highlighted, to make sustainability approaches sustainable, there is a financial aspect that must be taken into account. Freijo says when forming a sustainability strategy, it comes down to risk, cost and profit; here, he used the example Brambles of using certified sustainable timber. In this case, Freijo said it was the more cost-effective option, as the sustainability strategy required working closely with suppliers throughout the supply chain, which led to more efficient processes and closer long-term relationships. When supply chain issues hit, these strong supplier relationships helped the company to be more resilient against its impacts. This strong sustainability focus, he said, is also a pull to customers.
In terms of balancing long-term goals with short-term profit, Freijo said demonstrating the value of this approach can justify the business case in the longer term; this is built through cultural change, said Freijo. This was echoed by Catherine Howarth, CEO, ShareAction, who said that short-term has “dominated for too long.”
The panel was also asked, from an environmental perspective and considering planetary boundaries, if businesses should begin to think about degrowth. Sommer commented that Moet Hennessy is focusing on value growth, rather than volume growth.
Embedding ESG across the business landscape
Throughout the day, there was an emphasis on embedding ESG throughout businesses at all levels, finding ways to energise the workforce about sustainability, and encouraging businesses to return to education.
Deepak Jobanputra, Chief Sustainability Officer, Vitality, noted that culture doesn’t change overnight, and businesses must make concerted efforts to increase sustainability engagement. He noted that it’s all about creating education and awareness across businesses and “winning the hearts and minds” of people. Jobanputra highlighted Vitality’s Green Champions, integrating conversations about sustainability into town hall meetings and having regular senior leadership meetings. Jörg Eigendorf, Chief Sustainability Officer, Deutsche Bank, echoed this and emphasised the need for governance.
A look ahead
ESG Mena is proud to provide coverage for the two-day event and will be sharing insights, analysis, and updates in real-time. The day ahead will feature discussions on maintaining sustainability investments in the current macroeconomic environment, measuring business impacts on nature, Scope 3 emissions and more. Check in for the latest conference updates and key insights into how your business can best navigate the sustainability transition.