There is no time like the present
Companies have made progress but there is still a long way to go.
Interview with Aron Cramer, President and CEO of BSR, and Renata Greeeberg Frolova-Hammer, BSR Director & Office Lead for The Nordics
How are we doing as companies in 2023?
Companies have made progress but there is still a long way to go. While companies are growing more sophisticated, the problems we are facing on planet Earth are growing faster, and despite the heightened interest in the Sustainability agenda, evidence indicates that many board members do not feel equipped to take the needed actions at a required pace, as the Environmental, Social, and Governance (ESG) agenda is growing more and more complex.
Companies face the need to show substantial progress on just and sustainable business in an environment with economic uncertainty, facing challenges in accessing natural resources, testing new leadership methods to remain relevant through generational change, coping with political unrest and the consequences of climate change. In addition, new technologies are accelerating the pace of change faster than ever before, making company leadership rethink the way they communicate, learn, adapt, and conduct business.
Sustainability is an essential part of the answer to many of the profound and interlocking challenges we are facing today. Majority of board members in large international companies recognize this, and our experience from working with boards reinforces this development, and while it is easy to focus on the challenges that we are facing, it is also very important to not lose sight on what we have already achieved:
- Net-zero targets were an uphill battle not that long ago, for example at COP21 in Paris - now it’s an expectation and a baseline. It’s time for Transformative Action!
- Social equity, especially Racial and Gender, are being addressed much more today than ever before.
- Nature is finally in focus, with the arrival of the Science Based Targets for Nature (SBTN’s)* *where BSR is partnering with SBTI to help develop the goals.
- Social and Environmental due diligence is becoming a foundational activity, driven in part by EP’s vote in favor of the Corporate Sustainability Due Diligence Directive.
- Issues such as Climate Justice and Just Transition are moving rapidly to center stageand will be featured prominently at COP28 this fall.
What do successful companies do right?
Successful companies understand that a resilient business strategy depends on a clear understanding of the social and environmental implications of their choices. They also work to create the right incentives for leadership, and to allocate resources towards products and services that enable and are fit for the clean energy economy, enable access to economic opportunity for all, and engender trust.
It is critical for companies to listen to science and to turn ambition into action as well as to be working from the point of clarity on why they are doing what they are doing in terms of e.g. strategic and operational priorities, choice of materials, due diligence, investments and divestments, community engagement and flagship projects.
Successful companies prioritize an understanding of how the world is changing, including listening to experts, colleagues and communities that have always been included in deciding strategic direction, facing the future without flinching.
Progressive business leaders acknowledge that sustainability is becoming more and more important and look for ways to ensure that compliance and impact agendas reinforce one another rather than slowing down the organization.
BSR is now doing more work with member companies thinking about new models that enable them to thrive amidst the rising evidence that we are breaching planetary boundaries. This is a somewhat difficult narrative for businesses, but it is needed.
We still meet people who are still skeptical about businesses ability to influence climate change or people agenda – successful companies use engagement tools like double materiality assessment to inform and help bring the organization together in setting and achieving the right sustainable goals.
What do BSR members say businesses can do more of
We have recently asked some of our members, what they see as priorities for business in 2023, and this is what they said:
- Doing more work on Nature, with Taskforce on Nature-related Financial Disclosures (TNFD) and Science Based Targets for Nature
- Increasing focus on Responsible Tech, AI, and Human Rights
- Boards catching up on the interplay of ESG priorities and strategic direction of their companies, continuing with Integration of Sustainability into the core business strategy
- Focusing on impact - you can’t meet the requirements of regulations without coordination within internal developments in companies.
- As Sustainability professionals becoming better at winning people over - explaining complex issues such as Just Transition, Generative Ai and Human Rights, LGBTQ equity and the Rule of Democracy
- Remembering that a Business has a voice in upholding democratic governance and the rule of law to maintain a good and fair business environment - sustainability management needs to listen more and not be afraid of meaningful dialogue in the debate.
There is a lot to be done, the time to act is now, and we believe creating resilient business strategies for the future is the way!
