(This article (item 1) was updated on January 31, 2023)
UNESCO celebrated the International Day of Education on January 24, something that struck a deep chord with us here at Competent Boards.
The theme this year was “to invest in people, prioritize education”. UNESCO’s focus is on speeding up collective efforts on all 17 of the UN Sustainable Development Goals while the world looks for solutions to a global recession, the climate crisis and growing gaps in social equality.
This is particularly relevant, too, for board directors and senior business executives who are grappling with increasingly complex environmental, social and governance (ESG) risks and opportunities. The priority, then, for these company leaders is to get informed and master these topics in short order. Our world-class and agenda-setting ESG and Climate & Biodiversity education programs are the perfect place to do just that.
As always, please keep your news tips and suggestions coming to mathew.loup@competentboards.com or join the conversation on LinkedIn when we post this weekly digest.
1. Giving back to the planet. The World Economic Forum (WEF) has teamed up with leading philanthropic organizations to launch the Giving to Amplify Earth Action (GAEA) initiative. Its aim is to use philanthropic money as seed funding to kickstart major climate-related projects, and at the same time attract more funding from governments and private-sector companies. The Bezos Earth Fund, IKEA Foundation and The Rockefeller Foundation are three of the first 45 philanthropic heavy hitters to sign up for the initiative whose goal is to “unlock” $US3 trillion in annual finance for the global push to net zero and restore biodiversity loss by 2050. Although total worldwide philanthropic financing has climbed recently, bringing in an estimated US$810 billion in 2021, climate projects still represent less than 2% of that total.
2. Analyzing company impacts on nature. Biodiversity continues to climb rapidly up boardroom agendas and investor watchlists worldwide. The UN Environment Programme (UNEP) and S&P Global have teamed up to launch the Nature Risk Profile, which will analyze the impact of companies on nature. The new methodology allows users to combine company-level information with nature-related data to assess risks and opportunities. It comes shortly after the adoption of the Kunming-Montreal Global Biodiversity Framework at the COP15 Biodiversity event in Canada last December. That includes a target for governments to take legal, administrative or policy measures that will help companies regularly monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity.
3. CEOs look to a gloomy future. PwC’s 26th Annual Global CEO Survey paints a bleak outlook for the next 12 months. Almost three-quarters (73%) of those surveyed believe worldwide economic growth will slump in 2023. On top of that, nearly four in 10 (39%) think their organization will no longer be economically viable in 10 years’ time if it does not change course. The top five threats for CEOs in the next 12 months are inflation, macroeconomic volatility, geopolitical conflict, cyber risks and health risks, while the top five for five years’ time are macroeconomic volatility, inflation, geopolitical conflict, cyber risks and climate change. CEOs see climate risk impacting their cost profiles (50%) and supply chains (42%) more than the safety of their physical assets. Looking to their future boardrooms, although driving current operating performance currently takes up the lion’s share of CEOs’ time, 57% would like to spend more time evolving the business and its strategy to meet future demands. PwC surveyed 4,410 CEOs from 105 countries and territories for the report.
4. Fed flexes its muscles. The Federal Reserve has told the six largest banks in the US that they have until the end of July to disclose the impact of climate change on their operations. Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo are the guinea pigs in a program to make sure the financial system can withstand the impact of extreme weather events and transition to a lower-carbon economy. As part of the pilot, banks must map out what would happen to their residential and commercial real-estate loan portfolios in the event of a severe hurricane in the Northeast, plus a second climate shock of their choosing, such as fires, floods or droughts, in another part of the country. Part two requires banks to analyze the 10-year impacts on their corporate and commercial real-estate lending portfolios under two different energy scenarios. Either fossil-fuel use continues, or a successful transition to zero-carbon output by 2050.
5. View from the C-suite. Amid ongoing financial and geopolitical uncertainty worldwide, leading to a potential polycrisis, global C-suite leaders (CxOs) see climate change as one of the top two priorities, alongside the economic outlook for their companies in 2023 and beyond. According to the Deloitte 2023 CxO Sustainability Report: Accelerating the Green Transition, just under two-thirds (61%) of those surveyed also said that climate change will have a high or very high impact on their company’s strategy and operations for the next three years. Other factors have compelled change: the increasing number of climate regulations influenced 65% of CxOs to increase climate action over the past.
Year. And 64% agreed that employee activism on climate matters had forced their companies to increase sustainability actions over the past year (24% of which said it led to a “significant” increase). On an optimistic note, the majority (78%) are somewhat or extremely optimistic that the world will take sufficient collective steps to avoid the worst impacts of climate change. Deloitte surveyed more than 2,000 CxOs in 24 countries to measure concerns and actions by business leaders on climate change and sustainability.
Mathew Loup is Competent Boards’ Director, Marketing & Communications. Follow Competent Boards on LinkedIn.