Last week Mathieu Hemery attended the ESG NSW summit in Sydney, organised by Forefront events; a great event in view of the new mandatory regime starting next year for Group 1 entities.
Beyond climate though, other sustainability topics such as nature and modern slavery were tackled.
Mathieu's take away from the sessions are below:
The main macroeconomic events likely impacting ESG efforts (according to the wisdom of the crowd) were:
- Elections (US this year, AU next year) are seen as a major market and policy risk.
- The new mandatory disclosure regime, and the numerous considerations to face it: the requirements themselves, establishing boundaries in the value chain, developing knowledge and capability, understanding how to tackle scope 3 (which was a recurring theme during the day).
- In organisations, executives and Board support is perceived to be key.
- Evolution of the relationship with China.
- How to change the perception of climate risk to opportunity.
- Nature disclosures (TNFD), early stages, foundational work is needed. Expected to progress very fast in coming years.
- Worries about the tension between greenwashing risk and good sustainability stories.
What are the components of a good ESG roadmap? (panel: AMP, Accor, NBN, Endeavour Energy)
- Governance and risk management (boring, but crucial).
- Understanding what the focus should be, through materiality.
- Ensuring employee base understands well the roadmap (culture), younger employees tend to be passionate about ESG.
- Shifting the mindset from compliance / "have to" to a willingness to participate and deliver the outcome / "should be".
- Being mindful of the scrutiny from the regulator.
- Thinking of the roadmap as incremental steps.
- Sharing stories on sustainability in general or specific E or S topics through such forums.
- Embedding sustainability skillset within the business unit (instead of a siloed department).
- Translating the roadmap into value for stakeholders.
Unlocking value through IT (ran by Workiva and Climate & Decisions):
- Poll - most respondents in the room think they are in the initial stages of understanding the process (against 15% who think they have mature processes and capabilities);
- Scope 3 for suppliers and clients: integration with CRM systems, KPI.
- Will ideally require developing datasets at an industry level.
- Benchmark of the sustainability framework is the CSRD (EU).
How to leverage insights from mandatory reporting (panel: NRMA, CBA, Transurban)
- Importance of influencing stakeholders.
- The requirement for reasonable assurance puts organisations on the hook.
- Early TCFD adoption will be useful, but still additional work required for alignment with ISSB standards.
- Engagement with insurers (assets at risk).
- Double materiality assessments are better practice.
- Uplift internal capabilities.
- Specific advice:
- Don't waste time with non-believers
- Bring externals to deliver educational material to your org
- Keep decision makers up to date
- Keep energy, will be long-winded
Collaboration on scope 3 (panel: Boral, Pacific National)
- Need to understand the value chain and how to map it at a high level.
- Increased interest from customers.
- Beware of mismatch between targets set and how they can be achieved
Example: construction company giving a net zero commitment, without engaging with their cement supplier.
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