Sustainability in 2020: Time to dust off the ‘S’
There seems to be two schools of thought with respect to the future of sustainability in a post COVID-19 business environment.
- Sustainability is front and centre. We need to come back better; to be more resilient we must have ESG issues at the forefront in order to ensure a healthy, sustainable recovery. This approach will give us access to capital and a stakeholder licence to operate.
- Sustainability can wait. We know it’s important but it’s not a priority. We need to focus on business as usual and then once we’ve stabilised, we can start looking at our sustainability performance.
Much has been written about both of those approaches, and it seems painfully obvious which is the logical choice. However; we risk missing the point whilst debating the merit of the obvious choice.
Arguably for decades many companies have been executing and disclosing insufficient sustainability strategies, effectively reporting ‘fluff.’
Worse still companies have been unwittingly reporting irrelevant sustainability information and worse, actively not reporting material data. Sustainability governance systems are weak at best, non-existent at worst. Executive accountability for the integration of and sustainability performance is rare and without consequence.
That many companies have been reporting ‘fluff’ for many years has been well documented. Investors have been bemoaning for quite some time that sustainability reports do not provide sufficient or comparable data. This is especially so when it comes to social data, the ‘S’. To avoid fluff and fraud companies need to create robust sustainability strategies to manage dynamic material issues and then present assured data to demonstrate performance.
The ‘S’ has to date eluded both companies and investors. Few companies have successful articulated their impact on society and investors have not managed to quantify social risks and opportunities.
Indices such as the Corporate Human Rights Benchmark shine a light on the poor ‘S’ performance of many of the world’s largest companies. How companies both a. respond to COVID-19 and b. report on the impacts of that response is one of the defining challenges of our time.
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