by Andrew Potter, Chief Risk Officer, BAI Communications
I had the joy of welcoming my second child into the world just before Christmas; towards the back end of a pandemic that has really changed the way we work and balance our lives. It has really made me stop and reflect. I see it as an opportunity for a reset from a sustainability point of view, both with our lives and the planet which we inhabit.
I found myself thinking ‘What will the world be like in 20 or so years?’, both for my 19-month-old and my 9-day old, when they are older and thinking about their futures away from home. I have always been environmentally conscious, doing simple things like being careful to recycle correctly and even removing Sellotape from cardboard boxes (despite owning a V8 car, which I seldom drive!). However, there is always more that we can do both as individuals and as businesses.
BAI recently joined the UN Global Compact, and in my role, I am very proud to be supporting our campaign to do better. I know that this takes time and that we will all need to be sure to continuously upskill our knowledge on the topic of sustainability so that we can determine how we can make a positive and long-lasting impact. I want to share a little bit about the journey we are on.
Back in 2019, BAI launched a group wide Safety, Wellbeing and Sustainability framework. Though the framework at that time only touched on sustainability, it was included as a placeholder not to be forgotten about because we wanted to make sure that we tackled it at the right time, and in the right way.
Although each of our operating businesses were focused on sustainability, the activities were not well coordinated across the group and not formally captured under a framework with agreed key targets and reporting metrics. For example, although our Australian business has reduced its emissions via key projects by significant amounts ( circa 55% reduction in emissions to date), this was not widely understood or celebrated.
As BAI formalized our sustainability framework, we looked to the UN Global Compact to guide us. We have witnessed from COP26 in Glasgow last year that not all countries are equal, and that each has their own strategy to meet a global target. The same is true for businesses; they can’t all have the same target or strategy as it depends on the size of the organization, the industry in which it operates and the location of operations. These all help determine where you can best make an impact, and this is why the UN Global Compact provides a list of 17 Sustainable Development Goals (or SDGs) to help guide governments, businesses, civil society and the general public to work together to build a better future for everyone.
Through a thorough process, BAI has committed to focusing on the following five SDGs:
I wanted to share my perspective and learnings so far on how businesses can get to this position. My key suggestions are:
- Gain leadership support and buy in
- Undertake a materiality assessment
- Set challenging but realistic targets and reporting metrics
- Invest in knowledge
- And of course, apply the KISS principle (‘Keep It Simple, Stupid’), or don’t overcomplicate it.
Looking at each suggestion in turn:
1. Gain leadership support
- Complete a risk assessment. Look at what impact would be of not investing in sustainability versus investing in sustainability.
- Engage stakeholders from different levels, departments and/or countries who have a vested interest in sustainability.
- Research and highlight what competitors and customers are doing.
- Find an Executive who is willing to sponsor the sustainability initiative.
- Get the topic on to the Executive team’s meeting agenda.
- Ultimately, budget is required to support making a difference and so you will need leadership support in this area, particularly from the Chief Financial Officer.
2. Undertake a materiality assessment
- A materiality assessment is the process of identifying, refining and assessing numerous potential Environmental, Social and Governance (ESG) factors (both threats and opportunities) that could affect your business, and/or your stakeholders. You then condense them into a shortlist of topics that inform the business’ value management, proposition and communication.
- This will help the organization to stay true to what is important to the business model, despite the noise and uncertainty.
- This assessment can be updated/refreshed on an annual basis, to ensure all material ESG topics are covered and capture any material changes (e.g. M&A activity).
3. Set challenging, but realistic targets and reporting metrics
- You don’t just join the UN Global Compact as a participant and then sit back and relax. An annual public report is required to highlight how the organization is adding value and making a difference to each of the SDGs that the organization has committed to.
- To set targets, you need to engage with key stakeholders that have responsibility for those areas and ultimately get approval from the responsible Executive.
- Companies should be measuring and reporting ESG metrics aligned with their own sustainability strategy (i.e. the materiality assessment). This strategy needs to be underpinned by stakeholder engagement.
- Robust reporting in which appropriate ESG metrics are reported will demonstrate a high level of transparency and strong internal governance.
- Having these processes in place is also important when it comes to finance as it can have implications for acquiring investment from capital markets. You then you become a lot more attractive to investment; your CFO will love that.
- Measuring and reporting ESG metrics is not necessarily a simple process and requires planning and prioritizing to ensure that what is being reported is accurate and relevant.
- BAI is yet to submit its first annual report to the UN Global Compact, which is due later this year, but we know that it needs to be started early and well thought through. Perhaps this will be an experience that I can share in a future article!
4. Invest in knowledge
- I supported our Group Manager for Safety, Wellbeing and Sustainability in completing a ‘Business Sustainability Management’ course with the University of Cambridge which helped set her up for success in leading this process.
- BAI have now also invested in a shorter course, ‘Sustainability Essentials for Business’ with the same university, for a number of our sustainability representatives across the group.
- Investing and developing your people is fundamental to achieving a positive outcome for the individual and the organization as a whole. I’d suggest engaging with a representative at the UN Global Compact who can provide valuable information and help navigate the process. From our experience they were very helpful and responsive.
5. Keep it simple
- Don’t do everything at once – focus on a few core SDGs to tackle and undertake these with conviction. This was the overwhelming advice we received when we commenced this journey and so far, it has really helped.
- Prioritize several key topics (based on your materiality assessment) under each SDG and do them properly, rather than trying to undertake twenty different ESG topics and doing them half-heartedly. When seeking leadership support and buy-in, keep presentations fact based, to-the-point, well formatted and engaging. A busy presentation is going to lose the reader and ultimately lead to unnecessary roadblocks if the content is not clear on expected outcomes.
- Run a survey with the Executive team to see which SDGs they believe the organization should align to. We did this at BAI and it ultimately increased awareness and engagement of the SDGs and was also a fairly simple thing to do.
- Avoid greenwashing (the process of conveying a false impression or providing misleading information about how a company’s products/services are more environmentally sound than they actually are).
The suggestions above are not exhaustive and I am sure that others with far more experience of this process will be able to provide other valuable insights on what to expect a number of years into this process. I certainly would like to read more from others on this topic, and I hope that anyone looking to commence this journey finds my experiences useful and insightful.
Ultimately, my personal hope is that as the world responds to climate change and comes together to make a difference to sustainability so that future generations will be able to continue to enjoy this planet and not have to contemplate having to find another planet such as Mars to inhabit. It is all of our responsibility to start making a difference now and not just ‘kick the can down the road’ and leave it for someone else to sort out. By working together and making commitments, we can all make a difference.