There’s always this underlying question of the relevance of sustainability and ESG at all and in these particular times, and then there’s the need to clarify about the regulatory requirements but also, of course, on particular issues that you have in this wide scope of sustainability and ESG. When we are looking into the relevance of sustainability and ESG, any time, of course, when there is economic struggle, one of the top concerns is when you’re balancing the efforts with the threat of global recession.
But always — and Ellen also stressed this — we need to find out, what are the benefits of sustainability and ESG, and how is it integrated in the core strategy and the organization? It cannot just disappear, but you have to find another balance of different issues, and balancing the short-term, mid-term, long-term activities. Sustainability is linked to intergenerational thinking. Keep in mind how well the world looks like for our children and their children, and what consequences could and do have today for their lives. We do see many initiatives in monetizing the impact of biodiversity and its loss for humankind, or measuring the real impact of other activities. It’s just a matter of finding suitable indicators. We see a development to get there, but also, let’s face it, as always, if there is a will, then there is a way, and if it’s not, it’s getting really tough.
Sustainability is not an add-on. This is the mindset that you need to have to deal with this, and what’s important is to have this perspective in mind — both to have the strategic oversight and provide guidance. Then we have seen lots of regulatory changes, new requirements, in great detail and in great scope. This is also something that we hear from our clients.
For example, when talking to clients about the question of what sustainability ESG framework to select from, the first step is to identify, what do you need it for? It’s no longer a selection plate and you can choose, and it’s not only looking at those issues that you always like to work on. Now it’s also more, you have to find the balance of the mandatory set that is out there and what you can do additionally for your purposes. For us, it’s really important to see, for example, we have the reporting part in there, but please consider your strategic assets as well. Don’t do it just for the report. Do it for your strategic outline.
Clients reach out to us with specific issues touching the E, the S or the G, and often, we hear, it’s all too much. Do we need experts on all of this? Can we ever understand what is human rights due diligence, and what about biodiversity? Why do we have to consider all these stakeholders and do all these things? We are convinced it’s key to differentiate the material issues. We have to understand, what kind of priorities do we want to set from the organizational point of view and those relating to the key stakeholders — understanding, how do these issues influence us, and how do we influence them?
Then for example, if we talk about the human rights due diligence part, to pick one of these issues, they both have a crucial role to play. Human rights, relating it to the core business activities, that’s another story. And with the U.N. Guiding Principles on Business and Human Rights, published around 11 years ago, there was this differentiation of duties for states and businesses, and it was defined as the duty of states to protect human rights and the organization’s and business’s duty to respect human rights. Both need to provide remedy. Again, is this clear enough? Of course, it needs translation, and it’s necessary to fill these abstract terms with real-life examples, relating it to the value chain of an organization — not only the supply chain but also including it, and then opening up the different dimensions and explain opportunities for action and, again, finding out the benefits for the organization dealing with this.