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Home » Collaboration and alliance key to realising the vision for a regenerative and just future

Collaboration and alliance key to realising the vision for a regenerative and just future

by Mohammad Ghazal

With a focus on moving beyond sustainability and into regeneration, day two of the Reuters Responsible Business Europe explored the financial, social and environmental requirements for accelerating change across the business landscape.

Enduring throughout the conference was the message that companies should not be paralysed into inaction in their search for the ‘perfect’ answer and that collaboration will continue to be critical on our journey to net zero.

The conference delivered key sustainability takeaways to encourage further action, innovation and decision-making across businesses in Europe and beyond.

Taking control of data and navigating reporting

While businesses across Europe have achieved success in lowering and eliminating Scope 1 and Scope 2, Scope 3 is much trickier to tackle. It’s also where companies’ highest emissions are derived; in fact, a number of speakers noted that Scope 3 accounts for between 80-90% of emissions. The event’s panellists and keynotes outlined that to build trust in Scope 3 reporting, collaboration across the supply chain is essential, and data is key.

One of the sessions moderated by Sue Adkins, Founder & CEO of the Collaborative Action Network, explored the different forms these collaborations can take. BBC’s Michelle Papayannakos, for example, noted its collaboration with The Chancery Lane to create standardised ESG clauses to copy and paste into contracts across the supply chain. Papayannakos outlined that regulatory change is slow, and this can speed things up, again showing the pivotal role the businesses have in taking the initiative on sustainability.

Halyna Habegger, Head of Sustainability Procurement, PMI, noted that early engagement with suppliers is key and that it’s essential to engage and educate SMEs. The panel explained that this means mapping the maturity level of suppliers to understand how to approach communication and develop a strategy based on this.

However, Lucy Shea, CEO, Futerra, said that this is not enough, and businesses must look beyond Scope 3 to make the 1.5°C climate target. She highlighted the Avoided Emissions Framework (AEF), as an example of taking this further to remove carbon emissions beyond the business value chain.

With the slew of upcoming regulations and subsequent scramble for compliance, some of the speakers also shared concern that growing reporting requirements are becoming challenging for companies to navigate. Some also noted that there is a danger of businesses being unambitious with their goals out of fear of being condemned for greenwashing. Here, Mike Gidney, CEO of Fairtrade Foundation, said that companies that have nothing to hide have nothing to fear.

Elsewhere, Kateřina Bohuslavová, Chief Sustainability Officer, CEZ, noted that legislation is just one leg and that businesses should not forget that data is important for investors and that businesses need it to stay competitive regardless of the legislation in their country of operation.

Nature in net-zero

While not a new topic in sustainability per se, nature, the panellists noted, is now coming into focus. According to Andy Howard, Global Head of Sustainable Investment, Schroders, it’s symptomatic of a growing issue: increasing demand for limited resources. Of course, the recent introduction of the global biodiversity framework has helped businesses pivot into action; likewise, Jessica Smith, Co-Head of the Nature Team, UNEP Finance Initiative, also said that the speed at which it’s taken off is linked to how people connect with nature.

Indeed, Wouter Vermeulen, Senior Director Sustainability & Public Policy Europe, Coca-Cola, said that connecting with citizens on these issues is essential because it’s not as technocratic as climate, which means it’s more easily understood and resonates more deeply. He outlined that nature should be part of businesses’ holistic and integrated agenda.

However, Howard said that when it comes to the data, it’s “not as easy” as other areas to address, and the answers are “not as straightforward.” With biodiversity being a broad term, he said it can be less effective in mobilising action.

Smith added that nature-based solutions depend on regional ecosystems, with a huge level of variance in approaches, with no silver bullet solution, but that there are some major stewardship opportunities. Likewise, the panel emphasised that it’s not about nature in isolation, with people at the heart of nature-based solutions.

The new regulatory framework on biodiversity was also explored, and Howard noted that in the last five years, the regulations referring to biodiversity have doubled. Panellists outlined that action related to the regulatory framework will look different in every country but that policymakers, the corporate world, and civil society need to be focused on a common goal and move toward it together.

Alliance and collaboration an imperative

Underpinning the event was the importance of strong sustainability leadership and the need for collaboration at all levels. Emma Crystal, Chief Sustainability Officer Credit Suisse, noted that the challenges we face are so large we can solve them one at a time or, indeed, alone.

Crystal highlighted that when it comes to ESG data, partnerships facilitate knowledge sharing to fill expertise and responsibility gaps.

Karin Svensson, Chief Sustainability Officer, Volvo Group, explained that the transition in transport requires technology shifts, behaviour shifts, competency shifts, and new business models, all in a short period of time. Here Svensson referenced the First Movers Coalition, a partnership that sees companies use their purchasing power to ensure that innovations in their nascent stage from harder-to-abate sectors will hit the market ten years from now to assist with wider decarbonisation goals.

Similarly, Crystal referenced the Sustainable Markets Initiative as an example of private-sector collaboration, as well as the Net Zero Banking Alliance. She also highlighted the importance of collaboration with government, regulators and NGOs as critical to driving progress. On the reporting side, she highlighted the IFRS’ ISSB and explained the value of working with different bodies and regions to think about what an international standard might look like.

Discussing how we get collaboration to go further and faster, both Crystal and Svensson said that collaboration with competitors is critical. Svensson added that while businesses are driving the change, policymakers can enable and accelerate partnerships. Likewise, Sally Uren, CEO, Forum for the Future, commented that competition laws can be a stumbling block to collaboration and need to evolve.

Maintaining sustainability investment

Europe currently leads the way when it comes to sustainable investment. Indeed, data from Morningstar shows that in 2022, European companies made up 83% of global sustainable fund assets, although we’re beginning to see the MENA’s sustainability investment market deepen and mature, too. Keynote speakers Morten Nilsson, Brightwell and Christos Megalou, Piraeus Bank, explored how businesses can maintain sustainability investments during economic uncertainty.

Nilsson explained that the cost of living crisis, the Ukraine war, and the inflation spike are all compounding to create a challenging macroeconomic environment. On top of this, Moderator Dr Rhian-Mari Thomas, CEO of Green Finance Institute, noted that compared to 18 months to two years ago, there is also less alignment on sustainability and less enthusiasm in some places. To tackle this, Thomas said that ESG needs to be presented as a value driver; Nilsson echoed this and said that it’s about managing risk and exploiting opportunities, and the more this narrative is driven, “the stronger we are.”

Nilsson said some key lessons from economic uncertainty are that it is vital that companies set clear goals and objectives and cascade this throughout organisations. Again, it was emphasised that collaboration between the public and private sector is crucial, with Megalou identifying that banks have the potential to be “agents of change.” Indeed, we’re also seeing this develop in the MENA region, especially in the form of public-private partnerships. The Mohammed bin Rashid Al Maktoum Solar Park is an example of this in action, alongside the use of the Independent Power and Water Producer (IPWP) model.

The private sector as agents of change

Having brought together sustainability thought-leaders, experts and decision-makers from across Europe, the conference demonstrated some of the work being done by the private sector to push forward sustainability and regeneration and what’s required to take it further.

The importance of collaboration and knowledge sharing was at the core of many of the conversations, and with so little time to turn the tide, the message that rang loud and clear was that businesses must act now.

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