OBSERVE The Odgers Berndtson Global Magazine_ No. 18
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For more than 50 years,
Odgers Berndtson has
helped some of the
world’s biggest and
best organisations find
their senior talent.
We do so by forming
strong relationships
with the most talented
people, with those
Our special thanks to the
seeking them and
following Odgers Berndtson
between our own
contributors to this issue:
teams globally to bring
both sides together. It
Kit Bingham, London
is because of our deep,
Catherine Broome, London
non-transactional and
Paul Butterworth, London
lasting partnerships
Tony Gaffney, Toronto
that our clients can
Clare Glackin, London
acquire, develop and
Jane Griffith, Toronto
retain their strongest
Elaine Grotefeld, Vancouver
leaders.
Lauren van Halderen, Johannesburg
Lucy Harding, London
We deliver executive
Patrik Kvikant, Helsinki
search and leadership
Jonathan Rossotto, London
services to businesses
Yan Vermeulen, Singapore
and organisations
varying in size,
structure and maturity.
We do that across more
than 50 sectors, be it
commercial, public or
not-for-profit, and can
draw on the experience
of more than 250
Partners and their
teams in 29 countries. Observe magazine is printed on
Revive Offset 100% recycled paper
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Join the conversation at:
@odgersberndtson
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The Odgers Berndtson Global Magazine_
odgersberndtson.com
No. 18
Issue 03 2019
the
sustainability
issue
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www.above.academy recharge@above.academy +44 20 88498050Welcome
Welcome to Observe 18, the We explore how organisations – and
sustainability issue. the people who run them – can intensify
There has never been a global their efforts to combat society-sized
challenge quite like the climate problems like the climate crisis.
emergency. It is predicted to We speak to someone who led the
affect every person on Earth. sustainability charge at one of the
We have already felt the effects, world’s largest consumer multinationals:
many of them dramatic, yet the Paul Polman, former CEO of Unilever.
evidence is that this is just a taster We also explore the role of the
of things to come. Board on taking on a planet-friendly
In response, we must accelerate the agenda. Where exactly does the
decarbonisation of the world economy green buck stop?
on an unprecedented scale. And we look at the place of the Chief
So, this sustainability issue of Sustainability Officer in driving change.
Observe magazine is arguably our most Businesses have an extraordinary
important one ever. Because business power to adapt, and often to lead the
has a vital role to play in slowing the way, in finding solutions to big problems.
heating of the planet and adapting to Observe 18, reflects that fact. That’s
the future climate. It will take the very why I believe this Observe magazine is
best leaders working with extraordinary not just a good read, but a genuinely
talent to ensure success. essential one!
In Observe 18, we consider not just
the climate mountains to climb, but the Yan Vermeulen is a Partner in the
solutions too; across sectors from food Odgers Berndtson Singapore office
to shipping, infrastructure to fashion, and is Head of the Southeast Asia
mining to finance. Industrial Practice
OBSERVE
The Odgers Berndtson Global Magazine_
odgersberndtson.com
No. 18
Issue 03 2019
Observe
To read any of the
great content featured
in Observe over the
past five years, go to
odgersberndtson.com and
click on the ‘Insights’ tab
@odgersberndtson
#obobserve
@odgersberndtson OBSERVE 3/19 5Under Observation
Stories from BANKING
around the BACKING GREEN BONDS
Euromoney.com has just voted
world that HSBC as the world’s best bank
for sustainable finance, stating: “If
highlight some there is one bank that realises the
urgency of getting capital working
of the latest for the planet, it is HSBC.” The
thinking on
bank dominates in green bonds
and green loans. Among its deal
sustainability highlights last year it had the
inaugural Hong Kong sovereign €200 million blue bond – a debt
$1 billion green bond, Ireland’s instrument issued by governments,
first green bond, the first green development banks or others to
bond for protected agriculture in raise capital from impact investors
Mexico, the first green bond for a to finance marine and ocean-
telecoms company (Telefonica) and based projects that have positive
the first green sukuk in the Middle environmental, economic and
East. The bank was also the sole climate benefits.
lead manager on the World Bank’s euromoney.com
TRANSPORT BRANDS
PLANE TRUTHS PERIOD GAINS
Pieter Elbers, President and CEO The fight against single-use plastics
of Dutch national airline KLM, is is now a mainstream issue, but
taking its sustainability credential activists and environmental groups
very seriously – even advocating say disposable menstrual products
that some passengers consider are also a big part of the problem.
alternative forms of transport when One brand,
it comes to short-haul flights. He TOTM, is to
says the firm is exploring a “whole be applauded
range of initiatives” that could help for its eco
it become more sustainable. Its products. Its tampons, pads and
Action Plan for air transport in the liners are all made with GOTS
Netherlands sets a target of 35 per (Global Organic Textile Standard)
cent less Co2 by 2030 achieved certified organic cotton and contain
BOOKS partly by introducing sustainable no rayon, perfumes, gels or chlorine
fuel. KLM’s hub at Schiphol Airport bleach. TOTM also uses sustainable
KLEIN ON FIRE is part of this overarching plan: packaging where possible, meaning
terminals, offices, and ground its tampons come complete
As we go to press, a new book operations will also be climate with biodegradable cardboard
from Naomi Klein, On Fire, is neutral. Schiphol already runs applicators while its pads are
about to be published. It gathers entirely on electricity generated by wrapped in biodegradable or
together for the first time more Dutch wind and is making efforts compostable biofilm. Furthermore
than a decade of her impassioned to increase energy efficiency (for the packaging the products
writing from the frontline of climate instance, by using LED lighting) are shipped in is also
breakdown, and pairs it with new and limiting commuting. environmentally friendly.
material on the staggeringly high klm.com totm.com
stakes of what we choose to do
next. Klein sees the climate crisis
not only as a profound political
challenge but also as a spiritual and
imaginative one. Delving into topics
ranging from the clash between
ecological time and our culture
of ‘perpetual now’, to rising white
supremacy and fortressed borders
as a form of ‘climate barbarism’,
this is a rousing call to action for a
planet on the brink.
[See more book reviews on pages
32-33 of this issue]
6 OBSERVE 3/19 odgersberndtson.comContents
CONFERENCES 8 Sustainability: Setting the scene
INVESTING IN THE FUTURE Jim Thompson, Head of Odgers
Berndtson’s US Sustainability Practice
The Nordic Chambers Business Forum annual event,
to be held in London on 28 October, will focus on
‘Investing in Sustainability’. Understanding mega
12 Boardroom
trends is key to developing new business. That goes The vital role boards must play in rapidly
also for climate change and the wider Sustainable developing sustainability programmes
Development Goals where the Nordic countries are
seen by many as leading. But looking ahead, what 17 Sector focus I: Food
are the strategic opportunities in sustainability for
companies across technology, services, finance etc. 18 Fashion’s green challenge
– and for investors in both advanced and emerging
The fashion industry needs brave
economies? This always-engaging conference will aim
to find some answers. leaders in order to become greener
[See our feature on ESG, pages 28-31 of this issue]
dkuk.org 22 Infographic
Sustainability statistics to make you feel
RENEWABLES both alarmed and encouraged
IT’S ELEMENTAL 24 Imagining a better future
According to businessgreen.com the Paul Polman, former Unilever CEO,
UK’s National Grid has teamed up talks to Observe about sustainability
with the Alan Turing Institute to use
machine learning to more accurately 28 Money transfer
predict generation levels from wind ESG-related investing has come of age
and solar technology.
National Grid is using artificial
intelligence (AI) and machine learning
32 On the shelf
to help predict how much energy the The latest sustainability books
UK will reap from turbines and solar
panels when the wind is blowing 34 Chain reaction
or the sun is shining. The new AI Shining a spotlight on the supply chain
PHOTO BY JAN KOPŘIVA ON UNSPLASH
prediction models have improved solar
forecasting by a third. The project is 40 Cleaning up our act
similar to the collaboration between A two-part look at cleantech
Google and AI innovators Deep Mind,
which is also using AI technologies
to better predict energy output from
47 Listen up!
wind farms. National Grid says that by Some of the best sustainability podcasts
2025 it aims to be able to operate a
zero carbon electricity system. 48 Reality check
nationalgrideso.com Inclusion & Diversity within the
sustainability framework
FOOD 51 Sector focus II: Shipping
LET THEM EAT… INSECTS
52 Rise and rise of the CSO
As climate change
A look at the developing role of the
continues to wreak havoc
on global food production, Chief Sustainability Officer
some enlightened folk
are looking to other forms 56 Why Asia must do more
of food that require far less MNCs in the area need to up their game
land to feed us. One company,
Micronutris, is the first French farm for 58 World’s most important bank
edible insects for human consumption.
Plastic Bank wants to save the oceans
Mealworms and crickets are transformed into
flavoured crackers, energy bars, chocolate and pasta
packed with proteins, fibres and vitamins. During its
61 Sector focus III: Mining
lifetime one mealworm eats the grand total of half a
shaving of carrot. What’s not to like?!
63 Odgers Berndtson worldwide
micronutris.com A list of all 61 offices in 29 countries
@odgersberndtson OBSERVE 3/19 7Overview
sustainability:
W H A T
L I E S
A H E A
Jim Thompson on
why organisations
– and the people
who run them –
must intensify
their efforts to
combat society-
sized problems
like climate change
8 OBSERVE 3/19 odgersberndtson.comOverview
Corporate sustainability has three On the social side, meanwhile,
parallel mandates: to manage the companies are investing huge
impact of business decisions on amounts of time, money and energy
the environment and society while in order to align themselves with
improving the long-term viability their increasingly values-conscious
of the business. Hoping to “meet customers. One of the best examples
the needs of the present without of this comes from the diamond
compromising the ability of future industry, which has spent enormous
generations to meet their own needs”, sums implementing mine-to-
the sustainable business movement consumer blockchain technologies
was first embraced by a few altruistic that can demonstrate to morally
individuals, then grew to have some scrupulous consumers the authentic
marginal marketing or brand benefits, and nonviolent provenance of their
and now offers its practitioners gems. Why? Because a company’s
measurable financial benefits. environmental and social policies are
Perhaps this is why the world’s now, more than ever before, closely
largest and most influential companies informing the bottom-line.
have become increasingly vocal As sustainability initiatives shift
about their environmental and social from basic environmental compliance
commitments: they’re cutting their and corporate responsibility to
carbon footprints, they’re audibly core and remunerative aspects of
D ➜
PICTURES: UNSPLASH / IKON / WIKIMEDIA COMMONS / PLASTIC BANK
focusing on operational waste doing business, the structure of the
reduction, they’re investing in new sustainability function is changing.
green technologies, and they’re using Sustainability teams, which often
their clout to promote social agendas used to be subsidiaries of marketing
on both local and national scales— departments, are now becoming
all while maintaining their fiscal distinct departments of their own.
commitment to good governance. Some companies are even elevating
Microsoft, for example, carbon sustainability officers to the C-level,
neutral since 2012, has pledged to giving their Chief Sustainability
reduce its total operational carbon Officers a direct reporting relationship
emissions 75 per cent by 2030. And to the CEO and board, a greater role
Apple, which powers all of its global in strategy development, and more
facilities with 100 per cent renewable latitude in governing the firm’s stance
energy, is pushing its environmental (both internally and externally) on
commitments down its supply chain. sustainability. ➝
@odgersberndtson OBSERVE 3/19 9Overview
The good news and their loyalty to the company, while
Despite the up-front costs, (e) accomplishing the stated goal of
corporate sustainability actively offsetting the negative environmental
benefits both the company and its costs of doing business. Between
various stakeholders (shareholders, 2005 and 2018, the world’s 100 most
employees, customers, local and sustainable companies – as listed by
global communities). As former New Forbes – significantly outperformed
York City Mayor and sustainability their less green competitors. Top of
advocate Michael Bloomberg put it the list in 2018 was Dassault Systemes,
when talking about cities: “Parks and a French firm that designs engineering
trees make cities more beautiful, and software that assists organisations in
they also suck carbon and soot out waste reduction.
of the air. Energy efficiency reduces I don’t want to understate how
emissions while cleaning the air and important this is – for the planet, for
saving money. Bike lanes and mass branding, for employee engagement,
transit make it easier to get around and for talent attraction. The younger
town while also shrinking city carbon third of the US workforce, for instance,
footprints.” And all of this helps “cities is demonstrably values-driven. Despite
attract new residents and businesses”. widespread student debt, the rising
Businesses, like cities, can now cost of living, and the fact that they
accrue significant financial and possess on average 40 per cent less
than their parents
did at their age, a
significant majority
of Americans under
the age of 40 will still
the good news (a) leave a job for a
lesser-paying one that
more perfectly aligns
with their values,
and (b) pay more
for a product that is
brand benefit by offering others the environmentally sustainable.
benefits of sustainability initiatives. This is important because, in order
Companies that institute rigorous to attract millennial customers
corporate sustainability goals can and millennial talent, companies
(a) proclaim themselves as forward- have to pursue the kinds of social
thinking and social-minded, which (b) and environmental initiatives that
makes people feel good about buying this generation cares about, which
their products or services and (c) generally means doing real good for
makes its employees feel like they’re the environment and for the human
accomplishing more than simply lining stakeholders (both in the US and
the company’s coffers, which (d) abroad) who are affected by the act
increases their engagement at work of doing business.
10 OBSERVE 3/19 odgersberndtson.comOverview
Jim Thompson is Head
of Odgers Berndtson’s
US Sustainability
Practice
The bad news profits for shareholders).
The bad news is that our current Given the fact that corporations, like
sustainability efforts fall far short of the their human leaders, are programmed
systemic environmental changes now to focus their energies on tangible
required of us. short- and middle-range goals rather
Even while companies like Toyota, than vague shapes in the far distance,
Apple, Microsoft, Neste, Merck, Delta how should – indeed, how can –
Air Lines, Shinhan Financial Group, businesses take the next step to act on
and thousands of others take what what the numbers seem to require?
seem like drastic environmental steps, I do not, of course, have all of the
atmospheric C02 levels continue answers; but I have hopes. I hope
their meteoric rise. The numbers are that corporate boards, tasked with
truly terrifying. In 2013 atmospheric overseeing their organisations’ medium
CO2 levels punched above 400 parts and long term viability, can intensify
per million for the first time in three their efforts to combat society-sized
million years. In 2019 we hit 413 ppm. problems like climate change. I hope
To put this in perspective, back in that those companies with board-level
1970 atmospheric CO2 was at 323 sustainability expertise, board-led
ppm; and from the last ice age to the committees devoted to sustainability
mid 18th century, when large scale and corporate responsibility, and
industrialisation kicked off, C02 levels actively enabled Chief Sustainability
remained more or less flat-lined around Officers will serve as examples
280 ppm. If still more drastic measures for others. I hope that executives,
are not taken – by companies, by consumers, and employees will
nations and by consumers – global continue to act on their values, putting
temperatures are expected to increase competitive pressure on businesses
the bad news by some three degrees Fahrenheit by to increase their environmental and
2050 and seven degrees by 2100, a social commitments and therefore
process which will radically transform generating market-based solutions to
the world as we know it. climate change. I hope that businesses
But how can companies take more will find it in their interest to pressure
active measures? The corporate governments around the world to
world has never yet faced a problem implement sweeping environmental
on the scale of climate change and policies – to do, in other words, what
the corporate model seems poorly the international business community
suited to finding a solution. The costs has done quite successfully with issues
of inaction are at once difficult to like equality, civil rights, voting rights,
measure or predict and will be doled poverty, and ozone depletion over the
out with relative equanimity across the last century.
corporate spectrum; and so, though Lastly, I hope that by taking
there are competitive advantages to a leadership role in addressing
be gained by engaging in operational environmental demands, businesses
greening initiatives, there is little around the world can help restore
obvious advantage to taking more some of the public’s faith in corporate
severe measures — nor is it clear how values, reigniting the old notion that
such measures might align with that businesses are agents of progress and
third pillar of corporate sustainability vessels of societal good, not simply
and responsibility: economics (i.e. manufacturers of undispersed profit. ■
@odgersberndtson OBSERVE 3/19 11Boardroom
ROGER CHOUINARD / IKON IMAGES
All aboard?
12 OBSERVE 3/19 odgersberndtson.comBoardroom
Is your board really playing its part in helping tackle
some of the environmental and climate problems
we now face? If not, then it’s time to act – now!
L
ast year Deloitte published a report titled: the long term strategic threats and opportunities
Sustainability and the board: What do facing the business, to ensure a company continues
directors need to know in 2018? One of to evolve and remains adaptable for changing
its central arguments was this: “Although times.” Critically, Bingham adds: “Sustainability
it might not be the first boardroom and a response to climate change are central to a
topic you think of, sustainability is now central company’s long-term survival and success, making
to corporate competitiveness and a company’s it a vital topic for boards. In the past, many boards
continued ability to operate. Traditionally and companies adopted cheap and easy fixes – a
encompassing topics as varied as environmental generous donation to a relevant charity, or a glossy
disasters, labor relations, safety incidents, or brochure. Today, that is insufficient.”
scandals, sustainability affects all sectors and
challenges even the most progressive companies The pivot to purpose
and the most thoughtful directors.” For Vancouver-based Coro Strandberg, an expert
Deloitte envisaged sustainability securing more on sustainability leadership and transformational
time at and in between board meetings, in part business practices and relationships, the
because there is “no single, standardized approach insufficiency to which Bingham refers is part
to incorporating ESG [Environmental, Social of a much wider and more fundamental board
and Governance] into boardroom discussions discussion. Says Strandberg: “In the future we will
on business strategy and risk. The stakes are move towards redefining ‘what is the purpose
high, and directors need to act now to recognize of the corporation?’; which is a question of key
sustainability as a fundamental element of their concern for any board.” Strandberg calls it the ‘apex
stewardship and fiduciary role”. question’ that must be answered by shareholders,
Fundamental indeed. If we cannot rely on boards owners and management alike. “I call it ‘the pivot to
to play their part in resolving some of the burning purpose’,” she adds. “I wouldn’t start by saying ‘now
(literal and metaphorical) environmental issues, you’re on the board what about sustainability?’.
then things are indeed bleak. I would say you’re on this board and what’s the
purpose of the company and how does the board
Board responsibility have oversight of the company’s purpose?”
Boards that neglect – or are simply ignorant And that, says Strandberg, means a call to
of – the clear benefits of deploying a strong action for boards to “get a humanitarian or societal
sustainability programme, Deloitte’s report went purpose”, one that even goes beyond profits and
on, “do so at their own peril. There is a growing shareholder returns and having good customer
body of evidence indicating that sustainability relations - although it shouldn’t, of course, abandon
factors influence financial returns and present an these crucial areas. This overarching fundamental
opportunity to drive long-term value.” approach to what a company is, and what it stands
We discuss elsewhere in this issue the financial for, has been brought into sharp relief by the crises
and investment upside of an active sustainability we all now face. The role board directors must play
programme but here the focus is on what one in this unfolding drama cannot be overstated.
might call board behaviour. Tony Gaffney, Managing Partner, Board and CEO
Kit Bingham, Partner in the Board Practice Services at Odgers Berndtson in Canada, echoes
at Odgers Berndtson in London and Head of this sentiment: “Boards have a duty to consider
the Chair & Non-Executive Director Practice, is how their company and its sustainability measures
unequivocal: “The role of the board of directors up against emerging ESG standards and to ensure
has been described as ‘creating tomorrow’s that their business plan ensures adherence to
company out of today’s’. It follows that boards are those standards. Sustainability considerations vary
responsible for considering and scenario-planning across industry sectors. However, it is essential that ➝
@odgersberndtson OBSERVE 3/19 13Boardroom
companies consider sustainability from the indicators related to the company’s
all perspectives including those of their overall climate impact, for example its
customers, investors, employees and carbon handprint, are regularly reported
other stakeholders.” and reviewed also at the board level.
There are rising societal expectations, The board has annual discussions
believes Strandberg, with all on business-related operational
stakeholders looking for businesses sustainability matters. The sustainability
to play more of a role in society. It can function is organised directly under
mean the board should revisit the very Neste’s CEO which also ensures the
Kit Bingham, Odgers essence of the company – why does the visibility of sustainability issues to
Berndtson, London: company exist? Which in turn is linked the board.”
“Sustainability and a to a general public decline in trust (of
response to climate
change are central governments, organisations, companies Maintaining focus
to a company’s long- and so on); investors calling for more, Kähkönen expresses an important
term survival and consumers braying for action. sentiment that other boards would do
success...”
For Strandberg and Bingham the well to follow: “Translating sustainability
avoidance of tokenism is key. Strandberg targets into operational targets is a very
believes that being a director on a company-specific issue. Our experience
board where you are, perhaps, the is that a proper materiality analysis
STRANDBERG CONSULTING
sole sustainability expert is simply not is necessary. Neste’s overall business
good enough. “It’s not about having performance is closely linked to the
one person on a board! You get labeled company’s sustainability targets.”
as ‘that sustainability person’! I have a In Africa, Lauren van Halderen,
solution for tokenism: board education Joint Managing Director of Odgers
NESTE
on the relevant sustainability topics Berndtson’s Sub-Saharan Africa
material to your company. Plus, you business, believes that boards and
Matti Kähkönen,
Chair of Finnish need to have a very skilled Chair and leadership teams in her region must
energy company other directors who are exposed to and similarly “maintain an ongoing focus
Neste: readily accept diversity of thought.” on balancing competing stakeholder
“Neste’s overall
business interests to ensure sustainable growth of
performance is Boardroom action the organisations they steward”.
closely linked to It is encouraging to note that some Valli Moosa, a South African politician,
our sustainability
boards really have upped their game. Chairperson of the WWF South Africa
targets.”
For example, take Finnish energy Board and Independent Non-Executive
company Neste, one of the top three Chairman at AngloAmerican Platinum,
companies on the Corporate Knights told Observe that: “Business existence
2019 Global 100 list of the Most is characterised by rapidly evolving
Sustainable Corporations in the world. customer needs, shifting regulatory and
Neste, which posted revenues of EUR investor requirements and escalating
13.2 billion in 2017, is also the number environmental concerns.
one ranked energy company in the world “In one organisations where I
thanks to its industry-leading exposure chair the Sustainability Committee,
to clean revenues, top quintile resource we are responding to a variety of
Lauren van Halderen, productivity for energy, carbon, water, trends including artificial intelligence,
Joint MD Odgers NOx and particulate matter combined transparent supply chains, demographic
Berndtson Sub- with excellent innovation capacity, and shifts, ethical fashion, resource scarcity,
Saharan Africa:
“Boards must gender diversity on its board. anti-plastic sentiment and climate
maintain an Talking to Observe, Neste’s Chair Matti change. While these trends represent
ongoing focus on Kähkönen declared: “Sustainability is at risks, they are also opportunities
balancing competing
the core of Neste’s business model and to which we need to respond with
stakeholder interests
to ensure sustainable an integral part of Neste’s strategy that determination and commitment.”
growth...” the board approves. Van Halderen adds that businesses
“As the company’s business is focused in her region “need to find new,
on providing renewable and circular innovative ways to achieve sustainable
solutions to combat climate change, value creation, growth, greater social
14 OBSERVE 3/19 odgersberndtson.comBoardroom
❝
...You need to have a
very skilled Chair and
other directors who are
exposed to and readily
accept diversity of
thought
❞
Coro Strandberg,
Vancouver-based
sustainability
leadership expert
equity, promoting a sustainable, Boardroom action
thriving planet to provide solutions Boards unsure of how to accelerate
for future generations. Stakeholders their sustainability programme would do
should support the development of well to take note of Neste’s approach.
commercially and environmentally As Kähkönen states: “The company is
sustainable solutions for the company as developing its portfolio of renewable
well as enhancing sustainable long-term and circular solutions to reduce
shareholder returns.” global dependence on fossil oil and
WWF
Still, as Strandberg rightly points to contribute to improving recycling
Valli Moosa, out, educating board directors to know of plastic waste in society. Neste is
Chairperson of
how to change things in favour of committed to progressing towards
the WWF South
Africa Board and greater sustainability must come from reaching its corporate-wide climate
Independent Non- actively wanting to do it. “Boards have targets, while supply chain management
Executive Chairman professional development objectives remains high on the agenda.”
at AngloAmerican
Platinum: for their directors and every year the Adds Kähkönen: “Neste is
“We are responding governance committee is responsible for committed to transparency in our
to a variety of making sure that there is a programme operations and performance. We
trends including
artificial intelligence,
of education to equip boards with the communicate promptly, consistently
transparent supply knowledge that they need. But it’s not and accurately, and provide a sufficient
chains, demographic happening as rapidly as I would like. level of information to ensure that all
shifts, ethical
“Well-governed boards have an annual stakeholders can form a true and fair
fashion, resource
scarcity, anti-plastic evaluation of the board’s performance. view of Neste and its current and future
sentiment and You should have questions in there operations simultaneously and equally.”
climate change. on how knowledgeable the board is Every day that goes past without
While these trends
represent risks, on sustainability matters. If directors a coherent and implementable
they are also rank themselves low it’s then for the sustainability strategy is a day lost
opportunities to governance committee to decide what to the inexorable rise of climate and
which we need to
kind of education is needed. Not just the environmental change. It’s time for
respond...”
board overall but also its committees.” boards to act now! ■
@odgersberndtson OBSERVE 3/19 15#RBSEU
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Contact sponsorship@ethicalcorp.com for sponsor and speaker opportunitiesFood
Sector focus
We are what we eat. Food is currently the largest
reason for the energy imbalance on earth. The
statistics are terrifying – yet there is cause for hope
Four (of many)
reasons for hope:
1
Emerging
technologies,
incorporating
data and AI, as well
as artificial ‘meats’
are at an early stage,
offering visions of
‘vertical’ urban farms,
soil-less growing,
and replacement of
intensive meat raising.
The question is: can
these scale quickly to
make a global impact?
2
High-Pressure
Processing could
extend the shelf
life of food by 10
times. The technique
effectively inactivates
micro-organisms to
guarantee food safety.
This combination of
high pressure and
low-temperature
UNSPLASH
environment safely
maintains the taste,
food, appearance,
texture and nutritional
It’s the single largest source of greenhouse resilient, sustainable and efficient ways. This
value of food.
gases, with 31 per cent attributable to food means reducing emissions and pollution,
3
and its associated distribution chain. Food minimising waste and improving our soil. Kickstarter
is also the single largest consumer of fresh companies
water, the largest user of land and the single Drought could also be a more fundamental like Exo are
largest cause of biodiversity loss and soil problem for food producers. At two degrees hoping to make
nutrient depletion. of warming, a highly likely scenario given the insect protein bars
current rate of carbon emissions, droughts commonplace in
But just as the current food system is will decimate the Mediterranean and much our diets. Insect
draining the earth of resources at an of India. At three degrees, Central America, protein tends to
unsustainable rate and driving climate Pakistan, western US, and Australia will be contain about 60 per
warming, it will have to cope with the almost permanently drought-stricken. cent protein, is packed
challenges of the coming climate. with vitamin B12 and
Turning to the oceans, the source of fully one has more calcium
For example, globally, grains account for fifth of all animal protein we eat, acidification, than milk.
4
about 40 per cent of the human diet. Add warming, oxygen starvation and pollution have
Lab-grown
soybeans and corn, and you’re up to two- undermined this source of food. Many have
meat, otherwise
thirds of all human calories. described a mass extinction of species. Off known as in
Australia, for example, fish populations have vitro animals or ‘clean
The UN estimates we will need nearly twice plummeted by 32 per cent in just a decade. meat’ could be on
as much food like that in 2050 as today. But, sale very soon. It
just as we need to grow more grains and Can we face this challenge to our most could also make meat
other related foodstuffs, for every degree of fundamental daily need? Is there such a thing production a new
warming yields decline by a startling 10 per as a sustainable food system? We have less form of sustainable
cent. So we need to produce food in more than a decade to act, and find out. engineering.
@odgersberndtson OBSERVE 3/19 17Fashion
FASHION’S
GREEN CHALLENGE
F
ashion and sustainability does not the business was an issue. Together,
on the face of it seem a natural fit. these findings indicate that it has
By its very nature, fashion demands never been more important for fashion
that we constantly engage with the brands to have a credible, workable
new, encouraged to make multiple sustainability policy. This requires a
purchases through a throwaway culture robust leadership team that understands
often founded on low prices and quick that sustainability issues impact every
delivery or through the psychological area of a business, from ensuring ethical
obsolescence of this season’s ‘must production methods and minimising
have’ item. plastic use through to auditing every link
To put it in context, global clothing in the supply chain to ensure the most is
production doubled between 2000 and made from the least.
2014. In five large developing countries Catherine Broome, who leads
– Brazil, China, India, Mexico and Russia executive search assignments within
– apparel sales grew eight times faster Odgers Berndtson’s global consumer
than in Canada, Germany, the UK and practice in London, specialising in
the US. senior and C-suite mandates within the
Slowly, however, the world of Fashion and Luxury industries, believes
fashion is changing and consumers the drive for sustainability must come
are looking for more from the from the top. She says: “The two
brands they engage with, key traits to look for when choosing
aspiring to buy from companies someone to head up a brand’s
that can help them make a sustainability team are courage and
meaningful difference. vision. Vision usually comes first from
In a 2018 survey carried a top leadership perspective. When
out on behalf of sustainability you are looking for someone to lead
consultancy and creative agency that change through an organisation,
Futerra, 88 per cent of UK and US courage is so important.
Catherine consumers said they wanted brands “There will need to be initiatives and
Broome,
to help them be more environmentally actions that don’t make immediate
Odgers
Berndtson friendly and ethical in their daily lives. sense in terms of revenue. It’s not just
In a June 2019 survey for the fashion fashion – in any business where you Amy
industry bible, Drapers, 91 per cent of propose something to reduce profits Powney,
Mother of
brands and retailers reported that their it’s counterintuitive, so that’s where Pearl
customers were showing a growing courage comes in really strongly.”
interest in environmental issues, while Amy Powney, Creative Director
just 42 per cent said they themselves of London-based contemporary
offered a sustainable product range. womenswear brand Mother of
When asked about the barriers to Pearl, is an advocate of leading
sustainability, 34 per cent said lack of from the top. She has said:
the required knowledge and skills within “There’s no handbook on how to
18 OBSERVE 3/19 odgersberndtson.comFashion
LAURA JAMES on the steps fashion brands
are taking to improve their sustainability
credentials in response to growing
consumer demand
make a brand sustainable, but I wanted Eileen
Fisher’s
to know from start to finish where our
Waste
product was grown or derived, who was No More:
making it and the social impacts along recycling
the way. I’ve journeyed to find the best clothing
factories, suppliers and farmers who
care about the planet and its inhabitants
as much as we do.”
In April 2019 Odgers Berndtson Eileen Fisher’s Waste No More
staged a roundtable event to discuss programme is equally clear: consumers
sustainability and its impact. It invited can bring back items from the brand’s
senior figures representing leading range they no longer wear and get
brands, retailers, e-tailers and global vouchers in return. The clothing is
platforms within fashion and luxury. A key then cleaned and resold through the
finding was the importance of a selective company’s Renew programme.
approach over, for example, a strategy French luxury conglemorate LVMH
that tries to cover off too many topics. – which brings together brands such
Companies do well when they Fendi, Dior and Givenchy – has
demonstrably stand for something entered into a five-year partnership
selective in sustainability, such as a with UNESCO to safeguard biodiversity
commitment to eliminating plastic, across the planet. Board member
boycotting animal products, using organic Antoine Arnault said of the initiative:
cotton or reducing synthetic materials. “This partnership marks a significant
Conversely, firms that try to cover too step forward along the path on which
many bases, risk not standing for any. the LVMH group has already embarked
This clarity of vision works well for to safeguard biodiversity. We are
brands such as Stella McCartney, delighted to have this opportunity to
whose products are all vegan, meaning work closely with UNESCO on these
Vegan consumers can be certain that not only essential issues.”
clothing
are there no skins, fur, angora or feathers It is often, however, smaller brands
from Stella
McCartney in the collection, but also that the glues with hands-on founders which lead
used in bags and shoes are not derived the way when it comes to end-to-
from animal origins and none of the end sustainability – ensuring ethical
brand’s cosmetics have been tested decision-making from source to shelf.
on animals. A desire to create products that have
Another example is Toms, the minimal impact on the Veja
California-based ethical shoe brand, environment is often sneakers
which has given away 60 million pairs of one of the key reasons
shoes to children through humanitarian these brands were
organisations while ensuring much of its launched.
range is vegan. French company ➝
@odgersberndtson OBSERVE 3/19 19WWW.MANUFACTURINGEVENT.CO.UK
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Contact Gareth at garreth@prempub.ie or on 353 1 6120880 for more informationFashion
Veja’s sneakers are designed in France Marta Ortega – daughter of Amancio
and made in Brazil from recycled plastic Ortega, founder of Zara’s parent
bottles, organic cotton and natural company Inditex, and a member of
rubber. Founders Sébastien Kopp and the Zara women’s design team – said:
François-Ghislain Morillion worked in “It’s something that we all feel really
investment banks for a short while passionately about as individuals, as well
after graduating college before as in a work capacity. [We are] always
starting an NGO which audited French looking for ways in which we can do
companies’ supply chains, looking better: working on new technologies,
primarily at environmental and socio- new ways to work with recycled
economic issues. materials, and helping create new
Based on what they saw, then fabrics that our designers, as well as
they launched Veja and the brand others in the industry, can work with
has become massively on-trend, in the future. It’s the right thing to do.
synonymous with sustainable fashion It’s an approach that we’re absolutely
and incredibly successful, which is committed to.”
doubly impressive as the brand has UK brand Toast does things
never advertised. Speaking to the differently in an effort to counter
fashion website Make it Last, Kopp the throwaway culture, encouraging
said: “Veja’s secret to transparency sustained long-term use of pieces
and sustainability is to go into the field from its clothing range. It even runs
– to know what we’re talking about. regular mending workshops for
Sustainability is not a Powerpoint, it is customers keen to avoid making
more the mud of the Amazonian forest, further unnecessary purchases.
understanding the problems of reality.” With consumers increasingly
Catherine Broome believes larger demanding more sustainable clothing
brands have much to learn from the within a greener supply chain, getting
likes of Veja. “Smaller brands,” she says, the leadership structure working well Toast
“definitely have the agility to react more will be vital to future business success. encourages
long-term
quickly to hot topics or areas of concern. Governments, consumers and brands clothing use
Larger brands are not structured in that themselves are increasingly demanding by running
way and so are slower to react. that fashion takes a firmer stance on mending
workshops
“The key is direct communication with environmental issues and responsible
consumers. Often, very small brands will sustainability policies look set to become
say, ‘we’ve noticed this and this is what a key driver to staying on-trend.
we are doing about it’. Larger brands Catherine Broome believes the
will be slower to process changes in structure of sustainability teams will
consumer feeling, in world events, in be key to making these changes. She
hot topics. What they can learn from says: “All teams are made of three key
smaller brands is that direct and honest elements and the leadership of that
communication team needs to be visionary.
with the consumer “They have to be a very resilient
is key.” diplomat, who can create buy-in
But even within and have enough gravitas to enforce
fast fashion things strategies. Underneath that you need a
are gradually strategist, who can work out how the
changing. implementation is possible in line with
Spanish company Zara, the largest the current organisation or, if changes
fast fashion retailer in the world, need to be made, how that will be
produces 450 million garments and possible and what impact it will have on
20,000 new designs every year. the rest of the company.
However, the company recently pledged “Then, at the grass roots level of the
that all its cotton, linen and polyester team, you need innovators who need to
will be organic, sustainable or recycled be protected so as to allow them to be
by 2025. as creative as possible.” ■
@odgersberndtson OBSERVE 3/19 21Insight & data
10 facts to ALARM you
Every round-trip plane
ticket from NY to LDN
costs the Arctic By 2060, the cost of inaction on
3m 2 climate change is predicted to reach
of ice
$44 trillion,
with the highest anticipated GDP
[SOURCE: SCIENCE. losses in the Middle-East, Northern,
SCIENCEMAG.ORG] and Sub-Saharan Africa, and South
and Southeast Asia
[SOURCE: OECD & CITIGPS]
2in3
(
((
(
((
extreme weather
events in the last 20
¼ of the plant
and animal species
years were influenced
by humans
Since 1950 humans have
created approximately
assessed in a recent
UN-backed report face
[SOURCE: CARBON BRIEF]
6,300,000,000
extinction, many within
decades, unless urgent metric tons
action is taken of plastic waste of which
[SOURCE: DW.COM] only 9% has been recycled
[SOURCE: VISUALCAPITALIST.COM]
The average number
of people exposed
to HEATWAVES
has increased by
approximately
125 million
since the beginning of
the century
[SOURCE: UN NEWS]
A swath of
rainforest the size of
40 football
[soccer] fields
disappears each minute
[SOURCE: RAINFOREST-ALLIANCE.ORG]
Nearly
90%
of China’s population
is exposed to triple
the safe limit of
particle matter in the
air they breathe
[SOURCE: IG.FT.COM]
If concrete was a nation it would be the
third-largest emitter of carbon in the world One washload of polyester clothes
[SOURCE: BBC.CO.UK] can release 700,000 microplastic
fibres into the environment. It
is estimated that half a million
tonnes of these microfibres end
up in our oceans each year
[SOURCE: THEGUARDIAN.COM]
22Insight & data
10 facts to INSPIRE you Last year, Portugal generated
enough renewable energy to
power the whole country for the
In October 2018, entirety of March. The national grid
businessman, operator said that Portugal’s average
philanthropist and renewable generation exceeded 103%
conservationist consumption, which beat its previous People across
record of 99.2% in 2014. This is the Europe demanded
Hansjörg Wyss most amount of renewable energy
announced that he that the European country has
action to save bees.
would donate generated in 40 years As a result, last year
$1 billion
the EU banned
three bee-harming
of his fortune over the pesticides from
next decade to “help being used outdoors
accelerate land and
ocean conservation
efforts around the
world, with the goal of A United Nations On January 18, 2019, the
report says the ozone, European Union voted on
protecting 30% of the and confirmed an agreement
planet’s surface by including the gaping to introduce restrictions on the
2030” hole over Antarctica, use of single-use plastics like
will be fully healed by cutlery, plates and straws.
the 2060s The new regulation could
potential save the EU
$24.9 billion
[SOURCE: PBS.ORG]
in environmental damage
by 2030
According to the
advocacy group E2,
clean energy jobs
2018 saw the largest in 18 major US cities
annual increase in considerably outnumber
global renewable jobs in the fossil fuels
sector
generation capacity [SOURCE: ONETREEPLANTED.ORG]
ever, with new solar
photovoltaic capacity
outstripping additions
in coal, natural gas
and nuclear power A German 20-year-old has spent
combined just over a decade orchestrating
[SOURCE: THECONVERSATION.COM] hundreds of youth-led initiatives
SHUTTERSTOCK
to plant trees around the world.
Since he launched his initiative
as a nine-year-old, he has
helped to plant over one million
trees – and with his new United
Nations position as leader of its
Billion Tree Programme he and
his organisation will be planting
one trillion more trees
[SOURCE: GOODNEWSNETWORK.ORG]
Last year, the world’s second
largest coral reef, the Belize
Barrier Reef Reserve System was
removed from the UNESCO World French tyre maker Michelin has
Heritage Center list of World announced that it will be replacing its tyre’s
Heritage in Danger after years oil-based ingredients with wood chips instead.
of conservational efforts The first tyre is expected to be unveiled in 2020
[SOURCE: GOODNEWSNETWORK.ORG]
[SOURCE: WHC.UNESCO.ORG]
23Paul Polman
Paul Polman, former CEO of Unilever,
talks to Observe about his lifelong
commitment to sustainability and his
plans for his new venture IMAGINE
24 OBSERVE 3/19 odgersberndtson.comPaul Polman
Observe: You spent more than livelihoods for millions of people. what would be your immediate
10 years as CEO of Unilever Crucially, this work was sustainability priorities for the
pushing the boundaries of strongly aligned with the U.N. initial two-year period?
sustainable business. Looking Sustainable Development Goals, PP: I think the key consideration
back what do you consider in a bold effort to maximise for any business is to calibrate
to be your most significant our impact. where you can make the biggest
achievements? impact, which naturally will vary
PAUL POLMAN : There are Observe: What can other according to your sector and
two things that come to mind. organisations – both large and operational footprint.
Firstly, driving a long-term, small – learn from the Unilever Every company can leverage
multi stakeholder model is approach and who, in your their supply chain, partners and
ultimately good for shareholders. opinion, is doing the most customers to mobilise action that
During my time at Unilever we dynamic work on sustainability delivers positive change at scale,
demonstrated this with a 300 right now (other than Unilever whether it be more sustainable
per cent shareholder return over of course)? practices, enforcing human rights
10 years and consistent top and PP: The most important lesson is or helping to tackle corruption.
bottom-line growth. This helped that being a responsible business However, I passionately
to showcase the attractiveness is actually good for business. believe that the most burning
of our model and hopefully In fact, I believe a multi- issue we all need to focus on
encouraged others to change as stakeholder model is the only is climate change. If we do not
well; It’s about value and values. model that will work long-term. make tangible progress on this
And secondly, it’s clear that The only model that people issue, then I’m afraid the future
the development agenda is an will accept. of civilisation and much of the
increasingly attractive business Society is no longer willing to natural world is at risk. We are
proposition. In fact, it’s probably tolerate the idea that businesses truly facing an existential crisis
the biggest opportunity we are somehow run in the interests the likes of which the world has
have globally, and badly needed of shareholders, or a small group never seen before. We must
if we want to live within our of billionaires. ensure that we collectively stay
planetary boundaries now and Businesses thrive when they below 1.5 degrees warming,
for generations to come. protect our natural and human which requires us to be net
Indeed, companies that capital, equal to financial capital, zero by 2050 according to
want to be around long-term and serve all their stakeholders: the science.
must have a positive impact on citizens, employees, suppliers, We also need to make sure
society and the planet. Being partners and those who make up our growth is more equitable,
less negative simply isn’t good the extended value chain. When and this requires us to establish
enough anymore. That’s why you make your business relevant a new social contract, which
we developed the ‘Unilever to the needs of the communities ensures we leave no one behind.
Sustainable Living Plan’, so that and societies you serve, then Society and our economies can
the company could continue to everyone benefits, including be much more successful if we
play its part in helping to solve shareholders. promote far greater diversity
the challenges the world faces. Fortunately, we are seeing and inclusivity.
It was a determined effort to more and more great companies In the absence of fully
decouple the company’s growth stepping up. A good example functioning political systems,
from its environmental footprint is Patagonia Inc, an activist I also believe the private
and help improve society’s company that has a deep sector needs to step up, both
wellbeing. A concerted effort heritage of giving back and an individually and collectively. Bold
to use its size and scale to drive ingrained culture of working to and courageous business leaders
transformational change. protect the environment. Yvon must work together in deep and
And we made great strides. Chouinard, founder and owner purposeful partnership to move
SHUTTERSTOCK EDITORIAL
In helping to improve the of Patagonia Inc, deserves huge at scale and speed, so we can
health and well-being of over credit for his leadership. reach the tipping points needed.
650 million people; reducing
Unilever’s environmental Observe: If you were joining Observe: Your new venture,
footprint throughout the Unilever today – or another IMAGINE, plans to work with
value chain; and in enhancing organisation of similar scale – companies to press ahead ➝
@odgersberndtson OBSERVE 3/19 25LIMITLESS The Transformation Issue “ The world today is changing at a rapid pace, bringing new challenges and opportunities. Trained as a scientist and now an entrepreneur, I enjoy leading the transformation at the intersection between science and “ commerce because I believe with the right knowledge, lives can be transformed for the better. Reshmi Rajendran Entrepreneur, Classical Dancer, Mother of Two, PhD in Physics INSEAD Executive MBA 2016 Join Reshmi and other female luminaries at INSEAD to lead positive change. Find out more at limitless.insead.edu and discover a life without limits. France • Singapore • Abu Dhabi
Paul Polman
for greater sustainability. You to alter our trajectory. Sustainable Development Goals.
also say that you will invest an I am however optimistic The cost of implementing
unspecified amount of your that we can be successful, as the global goals has been
own funds in the project. Do we already have the means estimated at $3-4 trillion a year.
you not think that it is the role to realise the U.N. Sustainable Governments are unable to
of government and business to Development Goals, de- provide all this funding – indeed
fund these urgent programmes carbonise our economies and all overseas development aid is
rather than leaving it to drive transformational change. collectively only around $160
individuals? We know what we need to do billion – meaning business
PP: Given the scale of the and have the tools to do it. This and the financial markets
challenges we face – climate includes driving greater energy must embrace this agenda.
change, plastics in our seas, efficiency and use of renewables; Fortunately, it’s highly attractive
deforestation, the extinction more sustainable food systems; and promises a great return, so
crisis and gross inequality – it’s smarter infrastructure and it’s in our own self-interest.
evident that everyone must play city planning; better use of There are plenty of examples
their part, however big or small. of great companies walking the
Private sector leaders have talk. Courageous leaders like the
a key role to play. That’s where ‘zeronauts’, who are committing
IMAGINE will focus its time and their businesses to get to net
efforts. We will work with leading zero emissions way ahead of
companies in key sectors and their peers and current policies.
help develop and leverage heroic As well as the 870 global
CEOs that have the ability to companies (with almost $17
drive lasting change, not only trillion in market cap) that have
within their own companies, but made bold climate commitments
also – and more importantly – via the ‘We Mean Business’
as an ambitious group that can platform, the International
harness their cooperation for Chamber of Commerce, The B
maximum impact. It’s up to us – Team and U.N. Global Compact
the “courageous collective” – to technologies; deployment of are also very focused on this
make a real difference. circular models of growth; and enormous opportunity. Groups
I believe this will also in turn moving financial markets to the like these are forming powerful
encourage braver political long-term. alliances, shaping markets
leadership – which is desperately We now need to gather our and sending a clear signal to
needed – and more ambitious collective willpower, so we can politicians that they are ready for
public policy. We need to create simultaneously achieve strong bolder policy to put our economy
a self-reinforcing “ambition-loop” economic growth, rapid progress on track for net-zero by 2050.
between the private and public towards net zero emissions and
sectors, which drives deliverable, greater social inclusion. Observe: You have said that
impactful solutions. you “ended up in business and
Observe: You say that you learned that I can help more
Observe: In a recent interview regard the private sector as the people here to improve their
you said: “We are carbon “main engine for change.” What lives”. Is this still your belief?
junkies, exceeding many evidence can you provide to PP: It absolutely is my belief.
planetary boundaries and using support this belief? Especially if you lead a large
resources well beyond the PP: The private sector has the organisation that has global
capabilities of this planet to expertise, creativity, innovation reach and touches many lives.
recover.” Do you despair about and talent to deliver positive My ambitions remain the same –
the future or do you still believe change. It accounts for the I want to make the world a better
that we can overcome the biggest share of GDP globally place for future generations. With
perilous position we are in? and has the financial resources to IMAGINE I will be re-doubling
PP: I think we need to be realistic reach the tipping points needed. my efforts in promoting new
about the challenges. We’ve done In fact, we won’t get there economic and business models
untold damage to our planet and without business leadership. that have a positive impact on
we are in a fight against the clock Take, for example, the U.N. society and our planet. ■
@odgersberndtson OBSERVE 3/19 27You can also read