IoD Scotland Autumn 2021

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IoD Scotland events: Global Conference Drive the agenda and make Net Zero your destination PlanetMark sets a sustainability standard to chart your progress The IoD is proud to be a supporter of PlanetMark – the business certification scheme that recognises an organisation’s commitment to continuous improvement on environmental issues, including measuring and reducing carbon emissions, energy and water consumption, travel and waste. PlanetMark’s goal, explained Lilly Miller, its Chief Financial Officer, was to change the focus on to people and inspire them to make the shift to practices that have sustainability, fairness and equality at their heart. There was no silver bullet to achieve PlanetMark certification; rather than a perfect solution, organisations should take small steps that together, impact on key environmental and wellbeing indices. PlanetMark’s certification programme can unleash the passion of employees to make a difference and can be a major tool in increasing staff retention, employee and stakeholder engagement and attract new people and business. Key to unlocking this potential were finance directors, who Lilly suggested, could be renamed as ‘sustainability directors’ in the future, as their role put them in charge of an organisation’s environmental performance. Find out more about Planet Mark at https://www.planetmark.com Lilly Miller “FDs are routinely tasked with identifying future risks that threaten the business,” Lilly said. “But of the top 10 risks businesses face, six are linked to environmental issues, so shouldn’t an FD be controlling this side of your business?” Performance needed to be directly linked to environmental impacts. Start by tackling what you can measure: business travel, waste and water and energy usage, and take simple steps such as switching to renewable power. Set a carbon footprint baseline and use that as a starting point, with regular board updates on progress. It was vital that this exercise goes through your supply chain; challenge stakeholders on their own operations as there was little point presenting an environmentally-friendly face when your supply chain is failing to match your own progress. “Businesses have a role in driving this agenda,” Lilly stressed. “Legislation is usually too slow and faces multiple hurdles from vested interests. You however, can take a lead and drive change through your own practices and what you expect from your stakeholders.” Engineering solutions for the future Martyn Link, Chief Strategy Officer, Wood, in conversation with IoD Scotland Chair Aidan O’Carroll In a Conference Challenge session compered by Aidan O’Carroll, Martyn Link highlighted the huge strides engineering giant Wood had made in pivoting its operations away from oil and gas as it looked to “engineer solutions for Net Zero.” As a global business Wood understood that the current focus on climate change action was in the Global North, but the repercussions were being felt most keenly in the South. ‘One size fits all’ strategies would not work. “You have to 32 iod.com Martyn Link engage with people in a way that’s meaningful to them,” said Martyn, and that’s true of “your workforce, stakeholders or the communities you work with.” Offsetting its legacy business was “stretching Wood as an organisation”, but the cultural shift, which saw it asking tough questions of all of its operations, was paying dividends. Tackling climate change was now embedded into Wood’s culture and vision – “it is our North Star.” Pace of change could be frustratingly slow but despite having to take big steps into the unknown, “we are committed to sustainability”, despite the tensions that it creates in any business with aspirations for growth. “We are very aware that we have a responsibility to our shareholders but we also know we have a responsibility to those of the future: will they want to invest in Wood?” The future for Wood would be very different from its past and present. It was investing heavily in its Energy Transition Academy to retrain employees into the renewables sector, while looking for new solutions and bringing them to market. Enormous change was coming, and Wood was determined to be a force for good in the landscape that evolved. However, understanding your role in the society of the future was critical: “If you can’t articulate your future, how can you play a part in it?” Autumn 2021
Actionable insights n Set transparent goals – as board directors, hold yourselves accountable and measure progress n Set out your values on sustainability and the environment – and then recruit against them to ensure you have a team of like-minded people n ESG – think of it in the same way as you think of financial reporting; look at your energy, water and waste every month at board level as part of your oversight responsibilities Session chair Patrick Macdonald, Chair, IoD: “It feels like we are crawling in a direction we should be sprinting in.” Business leaders warned to ignore ESG at their peril Today’s business leaders will be held accountable to the next generation for their actions – and this demands a vigorous response to the threat of climate change. That was the view of the second Conference panel session, which brought together Jojo Mehta, Chair of the Stop Ecocide Foundation; Tony Wines, Turnkey Group; Prof David Hillier, University of Strathclyde Business School; and Jill Farrell, Zero Waste Scotland. Prosecute ecocide Jojo Mehta had the strongest words on the issue. Her organisation is promoting the concept of making ‘ecocide’ – unlawful or wanton acts committed with knowledge that there is a substantial likelihood of severe, widespread or long-term damage to the environment being caused by those acts – a crime, with directors held personally responsible for their companies’ actions. This went far beyond current health and safety or corporate liability laws and was increasingly likely to be added to legal frameworks around the world – within 10-15 years, Jojo believed. She was highly critical of current economic models: “Too much of how IoD Scotland Chair Aidan O’Caroll with panellists Jojo Mehta, Professor David Hillier, Tony Wines and Jill Farrell we operate is based on a model that threatens sustainability. We need to end the linear model that places no price on the cost of losing finite natural resources, and promote a circular economy.” She asked why society placed such a high value on ‘ownership’ of goods which were rarely used, when leasing/ hiring everything from capital equipment and car fleets to the DIY equipment that gathers dust in your shed may be a better solution, both financially and in regard to production costs and use of natural resources. ESG at top of agenda Tony Wines was keen to see more directors promote a strong ESG agenda at every board meeting. The importance of ESG (Environmental, Social and Governance) had increased hugely in recent years, though many businesses were struggling to apply its principles to their actions. “Transparency of your processes is critical,” he said. “Look at ESG reporting the same as you do financial reporting, adding it to board agendas and setting strong metrics to measure progress. Look at your energy use, waste and “We need to end linear models that place no price on the cost of losing finite natural resources...” Jojo Mehta water every month and track reductions.” He saw huge opportunities for businesses to promote their ESG to their stakeholders. Be active in good times and bad ESG tasks us to generate financial returns as well as positive societal impacts, said Professor Hillier, and he reinforced the need to think of your organisation’s ESG in bad times as well as good. Too often financial crises see issues such as sustainability jettisoned in favour of a race for profit; that’s a philosophy that needs changing for a constant focus on a triple bottom line – people, planet and profit. Investors support Investors were clearly swinging behind businesses with strong ESG performance and Jill Farrell reiterated how the first steps were easy to take. “There is plenty of low hanging fruit,” she stressed: “cut waste and energy, use renewable energy and switch your transport to electric cars.” But go deeper; look across your supply chain to ensure suppliers are following similar paths. “Some businesses respond eagerly to zero waste ideas, motivated by interest, but others because of ‘threats’ - from customers or suppliers. “You need a vision of why you are reforming your operations and bring your team with you.” There was a consensus that good governance is not good words, it’s good actions, and it was imperative for organisations to move away from a “lawful legitimation” of their current practices and take responsibility now. “Get ahead of the legal framework before you find yourself on the wrong side of the equation.” Autumn 2021 iod.com 33
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IoD Scotland Autumn 2021

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