Every year, GreenBiz's staff examines what companies have done in the past year to improve their relationship with environment and the market, while at the same time looking at things we can expect from the sustainability industry in the coming years. During 2015's GreenBiz Forum in Phoenix, Arizona, GreenBiz's chairman and executive editor Joel Makower sat down with Trucost Plc CEO Richard Mattison and GreenBiz VP and senior analyst John Davies to talk about the state of sustainability efforts in business.
While the talk touched upon many vectors that sustainability officers are concerned with, a focus was put on effective reporting and how sustainability can better be translated for the people in the wheelhouses of corporate ships: executives and investors.
Davies expressed concern about how reporting often becomes a "check in the box" affair, which ultimately leads nowhere.
"I just wish all that intellectual brainpower would be focused on solutions that companies could grab on to, and go present to their CEOs and CFOs instead of an extra full-time equivalent checking boxes and responding to all the different requests," he said.
Mattison agreed, noting reporting is important, but it has to be targeted and understandable for executive who don't work in the sustainability field.
"I would say reporting for reporting's sake clearly is a waste of time," Mattison said. "The investors that I've spoken to would say that reporting in a way that translates to them how you're reducing risk, creating more opportunities, and avoiding costs in the future that your competition might face will attract capital."
"That might not be called sustainability, but I would say that's good business practice and makes sense," he said.
Makower asked a key question about the role risk has in sustainability professionals' lives in the C-suite: "Is risk a part of the conversation, let alone the job description of sustainability executives?"
"I'm seeing more and more companies go to the risk officer and say, 'We need to talk. You need to understand this,'" Davies responded. "I think it's becoming something that if you're not going to your risk officer, you're missing a big opportunity."
Risk, clearly, is an excellent way to frame sustainability goals within the context of a company's bottom line. Even so, that doesn't mean that investors don't care about sustainability issues.
"I think we need to be careful when we say there is no [sustainability] conversation happening in the broad majority of shareholders," Mattison said. "There probably is, you may not just be hearing about it if you're a company executive."
Mattison also said that company leaders need to understand who shareholders are, and by extension, what sustainability issues will grab their attention.
"If the shareholder is a fund manager, then that's one thing. But the people who sit behind those — the institutional owners of capital such as pension funds — are really creating a huge movement right now," Mattison said. "There's a lot of interest in the topic of stranded assets. Assets that could be written down to a value of zero or even create liabilities is a consequence of change in climate policy for example, or a change in air pollution policy in China could write off value quite quickly."
In the spirit of sustainability officers talking business-speak to their company leadership, Davies offered some advice for officers trying to get sustainability to be a priority:
"If you can come to the table with good economic arguments, you're going to be a contributor, and they're going to want you there," he said.
For more in-depth analysis on where sustainability is headed, be sure to download your copy of the GreenBiz State of Green Business Report.