Our recent Sustainability in Asia event offered a unique perspective and progressive ideas for the future of ESG after COVID-19. Our designated speakers from the Insurance and Property industries, expressed their confidence that ESG will remain at the forefront of business strategy and planning, even throughout the uncertainties of this global crisis.
One of the consistent themes of the discussion was the belief that COVID-19 may act as an accelerator, particularly for the Social and Governance aspects of ESG, which was echoed across the various industries in attendance including financial services, retail, FMCG, and technology.
One participant from the discussion stated: “There has been a greater emphasis on the social piece during the early stages of COVID-19, including how are we managing our people? Are they safe and well? … which has been critical and now we’re getting into the stages of new ways of working.”
Regarding the new ways of working, we have seen significant gaps in the ‘how’ organizations are addressing ESG effectively under COVID-19 conditions. For example, an APAC Head of ESG within financial services described it as “ESG or sustainability strategy for a company has to fundamentally improve the business, not just the PR of the business, or the relationship with the customer, but must create value for shareholders.”
Emerging from the discussion were the following key trends for ESG in 2020;
Our speakers took the time to answer questions and challenge the group around their own thinking, as highlighted below.
How has the COVID-19 crisis affected the role which sustainability plays in the company’s overall strategic plan?
“The community side or external side has been reinvigorated. CSR and the community work used to be viewed by the C-suite as something nice that we do and we have to do, but not critical to our business, which has now changed dramatically. For example, when things are not well in the community and there is social unrest, it obviously is affecting the business immediately and very directly which is an opportunity to anchor these issues around business resilience.”
“We’ve seen CEOs and Boards recognizing this idea of resilience in a broader context, including social resilience, economic resilience as well as climate resilience, and having a broad language or something that speaks to the idea of resilience is key for an organization.”
Where should the ESG function sit within the business?
“Each business is unique but regardless of what team you’re sat in, the really fundamental thing is that you have access to the business and all of the stakeholders that you need. If you’re structured in a way where your management committee includes the CEO and has representation of the senior executives across departments most impacted by ESG, that’s really what’s important.”
How do you bring back the environmental issue to ensure it along with social and governance is a key topic that is also being paid attention as well as maintain momentum around the environment?
“Within Asia, there is a profound growing interest regarding environment, with a number of different governments for example, China recently announcing its intentions and a key driver for this being the Paris Agreements. Frameworks such as the TCFD are very useful.”
Who is doing ESG well, any gold star programs?
“There are lots of interesting things happening across different industries, and leaders across the board but what is most valuable is to assess how they are each addressing certain issues and what kinds of exposure and transparency you’re seeing around that because you can tell the quality of their understanding of those issues by their disclosure. Another important place to look is the description of how they govern those issues as well.”
“We’ve seen that ESG can be the pivotal transformation point for some companies, for example in recent weeks BP and Shell have actually launched radical transformations of their businesses which is an interesting example of change and transformation being directly driven by ESG.”
- Keep In Touch -