Andrew Stahl
Frank Werner
Sustainability and Finance
December 3, 2017
So…Where to Next?
The business world is home to thousands of appropriately-named "Thought Leaders" who use their expertise in financial industries, or FIs, to predict where the industry is heading in the decades to come. We are going to put a focus on the thought leaders who have some experience and insight into how the FIs are being/going to be shaped by the topic of sustainability. It would be a wild miscalculation to say that Environmental, Social, and Government (ESG), Corporate Social Responsibility (CSR), or other sustainable securities and protocols will not have a dramatic effect on the FIs in the future seeing as though they already play such a major role in today's discussion(s). Companies, big and small, are heeding the call of the global community and have entered into a race for sustainable superiority. Let's look at some of the different perspectives that are hitting the market from these thought leaders and draw some personal conclusions as to the fate of the sustainable financial industry.
Henry (Hank) Boerner is a renowned author, visionary, and Chairman and CEO of the Governance & Accountability Institute, a consulting company which helps companies understand the world of ESG and how it can positively affect them. Boerner seeks to uncover trends in industries related to sustainability and founded the institute as a vehicle to spread that knowledge towards companies who are looking to break into the sustainability sector but don't know where to begin. He has an extensive background in issue management, communications, and ESG factors related to the financial industry. As per his company's website, his world view is as follows:
"The critical issues of the 21st Century that challenge individual leaders and their institutions in all sectors can be grouped in the important 'E,' 'S' and 'G' buckets of issues. It's really all about (e)nvironmental and (e)nergy responsibility and performance, how organizations address and manage their own and stakeholders' (s)ocial or societal issues, and the organization's corporate and institutional (g)overnance factors."
Boerner is extremely active on his company's blog, and posts frequently to keep his audience up to date on breakthroughs and breaking news in the sustainable sector. In one of his posts, All Together Now — Industries, Sectors & Professional Groups See Collective Efforts As The Way Forward for Managing Sustainability Issues, he discusses how leaders in different industries are all coming together to address the sustainability problem in a way that is mutually beneficial for all. For instance, he discusses how architects in cities such as Los Angeles need to accommodate for the fact that in the next 30 years, it is estimated that "70% of the … global population will be living in urban areas" and how global warming and increased global population are causing the whole industry to push for innovations for the new future. Another sector that Boerner addresses in his posts is the Textile Industry. Everything from the raw materials to the water consumption to the Sustainability Developmental Goals (SDGs) that the companies lay out are some of the most major and important trends that, in Boerner's opinion, need to be addressed and worked on in order to improve their sustainable outlook. He is always very quick to praise the companies that are addressing these issues and acknowledges that those who do not address the issues will not have any future in the business. His posts are wide-reaching and fully up to date with relevant work and insight of industry leaders. As his mission statement suggests, every important issue that is affecting business is related to ESG, and that is the ticket to prolonged success for the business and for the world.
John Elkington is the Founder and Executive Chairman of Volans, which is " a future-focused business working at the intersection of the sustainability, entrepreneurship and innovation movements." Elkington has written numerous articles, published over twenty books, spoken at hundreds of conferences, and is esteemed in the industry as one of its most prolific thought leaders in sustainability. Out of the articles that he's published with Harvard Business Review, the two that we will be focusing on will discuss both the rewards for sustainability as well as the ways that issues are "framed" in a business. The latter of the two is an article that Boerner mentions on his blog, highlighting the main frameworks and contributing his own commentary on Elkington's conclusions. First, the one that more business leaders are curious about, is his article Saving the Planet from Ecological Disaster Is a $12 Trillion Opportunity, which, as the audacious title suggests, showcases the immense opportunity to businesses to cash in while helping the global community in the process. The main focus of the article is how the U.N. laid out a set of bold goals and targets that they hope to accomplish by 2030. In the process, this will " open up market opportunities worth up to $12 trillion a year." Although the tasks are somewhat daunting, Volans, PA Consulting, and United Nations Global Impact were able to come together and create "Project Breakthrough" in which they map out the various risks and opportunities for the goals. This map helps bring to light how powerful the change will be, how many people will it affect, and how achievable the goal is in the real world. The thought process behind Elkington and Volans' contribution was to provide the framework for these goals and to help build business models that will address issues and continually strive for sustainability in the industry. The second HBR article under consideration is The 6 Ways Business Leaders Talk About Sustainability. In this piece, Elkington pulls out the key "frames" of a business, such as the resources frame, the time frame, and the value frame, and addresses the weaknesses of each in an effort to showcase how people frame different issues and how they should be approached. Concluding, he maintained that a key skill for all of us driving change is to recognize the frames shaping other people’s worldviews and priorities—and, equally important, to understand and evolve our own frames." He understands that understanding the thinking behind the changes are as essential to achieving them and bringing them to the mainstream. Nonetheless, his contributions to this sector and to the world are invaluable, and the work that he does will continue to help companies achieve a sustainable future in the years to come.
In my own opinion, I find it hard to argue with the expertise and the brilliance of the two men mentioned above, as well as all of the other thought leaders in the sustainability and finance industry. Not only is the logic solid, but the data is overwhelmingly in its favor. I think that the future of the financial industries is going to be more affected by addressing sustainability issues than anything else. The key reasoning behind that is that companies today are already working tirelessly for this and have started a race to the top of the sustainable financial industry. Whichever company does not make this a top priority is going to close up shop and wither away from existence. Just as technology is changing the world at an incredible pace, so too is the need to address is issues of global warming and rising population before those issues lead to our downfall. Another reason I want sustainability to be the most important factor in business strategy in the coming years is that if there were ever a group that would contribute profound changes to the world economy and ecology, it is the top corporations who wield more power, influence, and impact than the rest of the world combined. I'm ecstatic to see that so many have taken the call to arms and are seeking to address these issues, and I cannot wait for the coming years to see what these companies will accomplish.