Staged for the first time as a wholly digital event that patched in guests still working from home, the forum’s main theme was how the global pandemic is shaping the future world, and the challenges of generating a sustainable recovery.
The question of what this now entails for business and investors was debated by four eminent representatives of business, academic and investing, along with two of Robeco’s own experts in sustainability. Some 300 viewers joined the 16 July event which was jointly presented by Erika van der Merwe and Head of Sustainability Integration Masja Zandbergen.
Pulling no punches, former Unilever CEO Paul Polman said the coronavirus and the bigger issue of tackling climate change showed it was time to recognize how nature is fighting back. Polman is now a co-founder of Imagine, a foundation focused on business collaboration for systemic change.
Speaking on a link from Geneva, he said: “We are playing with the boundaries of the environment. Nature is sending us invoices. And it's not that the economy is dominating nature: the economy is actually a wholly owned subsidiary of nature.”
“My message to CEOs is very simple: the train has left the station. If you're not on it very quickly, you'll soon be doomed to the to the graveyard of dinosaurs. And you see that happening already. The average lifespan of a publicly traded company is going down. The average tenure of the CEO is going down.”
“We simply don't have the right leadership, or the right business models, in many places in the world. Increasingly, the overwhelming evidence is now that companies that have integrated ESG more – be it climate change, diversity, responsibilities for the value chain – are also better financial performers.”
“So for investors, if your argument today is still that ‘my fiduciary duty is towards my shareholders and I need to optimize shareholder returns’, then I have to say the reality is that it actually forces you to start to run your company with much stronger ESG criteria, because the evidence is now overwhelming that that gives you that higher return.”
Much greater collaboration is key to tackling major challenges such as Covid-19 and climate change, said Adam Matthews, director for ethics and engagement at the Church of England Pensions Board. He is also co-chair of the Transition Pathway Initiative which works to move high-carbon companies away from fossil fuels.
Speaking from Edinburgh, he said: “The change that's happening is not happening at a pace that responds to the message from science. Science is leading us to the Covid-19 recovery. Science is sounding every single alarm that it possibly can around climate change. And at present, we do not have a societal response that matches it.”
“But what's different now is that you've got different partnerships coming together to collaborate between different entities that don’t necessarily work together, but who can share a common objective, be that in corporate sector, in the investment sector, or in wider civil society.”
“And when you get that alignment between those entities, I think you can drive change outside of the governmental process in a way that hasn't been possible before.”
Ramping up the sustainability reporting standards for companies and investors to the same level as normal financial metrics would be a major step forward, said Carlos Joly, Fellow at the Cambridge Institute for Sustainable Leadership.
Speaking from Sardinia, he said: “We know how to report financials: we report it in umpteen ways, slice it and dice it, ad nausea. What we need to do is report ESG, and learn to report that on a par with the financial reporting.”
“I would like to see sustainable finance funds report an environmental and social dividend… calculate what the actual impacts of the portfolio are on conditions in society, in the workplace. Figure out not only how much carbon there is in the portfolio, but how much waste, how much water is being used.”
“And how much taxes are being paid by the companies in your portfolio? We are all very happy investing in the high-tech sector. But if you look at high-tech portfolios and see how much tax they pay back to society, it's ridiculously small.”
One sector of society that is usually ignored is young people and millennials who could teach ‘experienced’ people a thing or two about sustainability, said Talitha Muusse, a generational expert and a a member of the supervisory board of MVO Nederland, a Dutch corporate social responsibility group.
Speaking in the Rotterdam, studio, she said: “I really believe that we should involve younger people more with strategy. We're really missing the opportunity if we don't use the perspective of a completely different generation. My generation also has different skills to bring to the table.”
Robeco’s views on the sustainable future were expressed by co-host Masja Zandbergen, and Chief Operating Officer Karin van Baardwijk. “I can summarize how we view sustainability in two key words: one is research and the other is integration,” said Zandbergen.
“We have 36 experienced researchers when it comes to sustainability, and they work together with the investment teams, who integrate all this information into their investment decision making. Integration is key, because if everyone is chipping in, you multiply the brainpower and you increase your potential to get the best result, the best ideas, the most innovation, and the best solutions for our clients.”
From the senior management perspective, Van Baardwijk said: “There are two different angles to look at Covid-19 as an asset manager; you can look at it from an investor perspective and also from a firm perspective. But overall, the main difference is that the focus is gradually shifting from the E out of the ESG to the S on the social issues in the companies that we invest in.”
“How investee companies respond to Covid-19 says a lot about their general approach to sustainability investing. The most important thing is to lead by example.”