ESG essential for Business Resilience says expert panel at B20 summit

As businesses today operate in a very complex and dynamic environment driven by technology disruptions, climate imperatives, consumer and civil society expectations, and global competition, embracing ESG can help businesses navigate these complexities better. A panel moderated by Sanjiv Puri, Chairman & Managing Director, ITC Ltd, India deliberated on how incorporating ESG practices can help identify risks to businesses and also help strategize their mitigation, building resilience into their businesses.

In ESG reporting, the focus has been on decarbonisation, while adaptation is very important. Speaking on the ESG standards, Marcelo Behar, Vice President-Sustainability & Group Affairs, Natura & Co, Brazil said, “When we look at the many ESG standards, and we're talking about 100 standards, at least today, considering environmental, social, and also governance aspects, there is one thing that is more important than many others is the nature loss. Nowadays, in the woods, 96% of mammals are humans, and its livestock. So, we have to hold and to reverse the laws of nature. So, our suggestion is, we should give the same discipline that we already created for carbon emissions to nature. We have to shift business in order to be not only carbon positive, but also nature positive. To have our metrics standing for financials or connecting the livelihoods and nature, there is the need the need to connect finance to everything we do.”

Brazil, as a nation, has been working on ESG space for the last at least 20 years. It held the first Earth conference back in 92 when the COP of biodiversity and the COP of climate change were only one. And since a model has been put in place that operates with the Amazon region and is protecting over 2 million hectares of the Amazon.

Sharing insights on how developing and developed economies are dealing with the issues of sustainability, Kamran Khan, Managing Director and Head of ESG for Asia Pacific, Deutsche Bank Group, Singapore explained “For emerging economies (developing countries), governments have limited resources that are being channelized towards adaptation. The question then becomes what is the private sector doing in emerging economies? Are they going to be hamstrung because they have to now adopt world-class mitigation strategies? And that is a two-way street. Meaning for an emerging economy for example, like India there's a huge opportunity there's a new market developing India can be a leader in this space, both in terms of exports and building expertise within the country. But at the same time, the developed economies have to keep those markets open for Indian services and products.”

Linda Kromjong, President, amfori, Belgium says “Many disruptions that we have (impact of climate change), and we really need to make sure that the supply chains are becoming more sustainable than they currently are. Companies rely on complex supply chains. And that company is as sustainable as the supply chain is sustainable. So, if we want our sustainable companies will need to have a sustainable supply chain and we can only do that if we make sure we adapt but also become more resilient.”

Sharing how sustainability is being progressed in Saudi Arabia, Abdulrahman Al Fageeh-Al, Chief Executive Officer, SABIC explained sustainability and Saudi Arabia has been addressed a long time back, and it is only the environment that the focus is on. “The governance has been there for a model more than 100 years. The social has also been adopted and incorporated among all the corporations. So the only one that is evolving, and recently adopted is in the environment. The moment that we adopted, the sustainability is part of our values. Part of our business models, and part of our economic and business cases that we felt so the moment that the sustainability is addressed as business cases, that it has to be adopted by everyone, the moment that everybody is going to jump and it's not something to be regulated and to be on force, and away that it can be adapted and require a lot of efforts. It should be part of the business models.”

Sharing perspective on businesses are integrating ESG into their business models, Jennifer Westacott AO, Chief Executive, Business Council of Australia and Chancellor, Western Sydney University, Australia says “Australian companies like many around the world are now on this unstoppable trajectory, driven by capital flows, community expectations, government regulation, and of course, shareholder investor expectations. I think what we see in the leading companies in Australia is that they are seeing this as value creation, not compliance. They're seeing this as building resilience, not simply a license to operate. And they're seeing this as a point of comparative advantage. 70% of Australian companies have signed up to the gold standard of climate reporting.”