Chief Executive Officer
Discovering and applying sustainability insights to successfully navigate the waves of change.
Change is everywhere…change is constant.
Throughout history change has primarily been a positive force that has pushed nature and civilization forward. We’ve become healthier, happier, more productive, and more resilient. But change can also be destructive. Changes in human activities over the past three centuries have led to global warming and a looming planetary crisis. The series of catastrophic hurricanes that pounded US and Caribbean coast lines in late summer underscore the extent of the crisis, as weather patterns become more extreme, more frequent and more costly.
But even with the flow of negative events, positive waves are emerging and gaining momentum. These new waves are represented by a bevy of investors, governments, institutions, and even companies who are rising to face global challenges head-on and correct the damage inflicted on people and planet.
This year we continued to see investors large and small announcing intended divestitures from fossil fuels in large droves and in historic volumes. Moreover, institutional investors are requiring more stringent reporting and disclosure from companies on everything from carbon footprints and water management to human capital issues like gender pay gaps and diversity. Later, we’ll hear from banking and asset management giant, BNP Paribas, on their efforts as investors to combat climate change, support sustainable projects, and encourage socially responsible investing among its clients.
Worldwide, governments are also driving change through pollution legislation and subsidies for energy-efficient vehicles and infrastructure. Institutions too are making their mark as agents of change forging ahead with fresh, new collaborations with private sector players. A notable example is the Financial Stability Board which develops and coordinates financial sector policies. This past summer the FSB’s Task Force on climate-related disclosure (TFCD) issued first-ever guidelines for financial institutions on how to assess and report their own risks associated with climate-change.
But even with the flow of negative events, positive waves are emerging and gaining momentum.
But perhaps the most powerful of institutional changes is the accelerating momentum of the United Nation’s 17 Sustainable Development Goals (SDGs)—a comprehensive framework for approaching worldwide inequalities and development challenges. The SDGs were created via thoughtful collaborations between leaders from government, NGOs, academia and business. It is unique among development initiatives in that it seeks to leverage the expertise and capital of business and private investors towards solving global challenges. Successfully achieving the SDGs will require an estimated USD 5-7 trillion per year over the next 12-15 years—which means it will require public and private capital. That translates to a huge investment opportunity.
What’s more the SDGs provide specific targets that help guide companies, governments, investors and other stakeholders in setting goals and measuring contributions. For corporations, the SDG framework is a multi-purpose tool that can re-invigorate everything from corporate philanthropy to corporate strategy. As interest in impact investing grows, corporate social responsibility (CSR) is becoming more sophisticated and critical for companies to consider. The most sustainable firms have well-defined corporate identities, a strong sense of purpose, and are using SDGs to help align CSR programs with core business functions in order to maximize their profits as well as their impact on society.
This year has witnessed unprecedented changes in attitudes and actions across the globe.
SDGs are having a positive effect on corporate behavior in other ways as well. Their increasing popularity is helping foster a culture of scrutiny, transparency, and accountability in business and government. Knowing how firms deploy assets is important but it is also useful to know how they deploy influence to shape public policy through activities like advocacy campaigns, think-tank funding, and legislative consulting. Policy influencing activities, when principled, are essential for good policy-making. However, when abused, they bring reputational damage and engender distrust among customers and the wider public. Worse still, they can lead to gross economic inefficiencies, competitive disadvantages and economic mis-development if left unchecked.
Rates of change and pace of decision-making are accelerating. This year has witnessed unprecedented changes in attitudes and actions across the globe. Some changes like de-carbonisation and energy transition leave us thrilled, others like geo-political developments, leave us concerned. Change can mean progress but, at times, setbacks.
At RobecoSAM we aim to be at the forefront of changes in sustainability thinking. Whether through the Corporate Sustainability Assessment (CSA), our sustainability research & analyses, or our engagement with companies, we strive to facilitate changes that have positive impacts for business and society. We look forward to another year—of change.