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Collaboration Forum Series 5: Building a brighter future (Week-5)

The future of sustainability & ESG: a business imperative or just good practice? 

Over the last year, many businesses have needed to prioritise survivability over sustainability. The pandemic has amplified ESG awareness and expectations. Investors, shareholders, clients and employees are demanding ESG authenticity and action. What is your company doing today? What do you need to do tomorrow? How do you shift from a veneer of ESG to becoming a leader and what is the risk to your company’s fortunes if you don’t? In this session, our sustainability and ESG gurus Tim Stedman at Agilyx, Andy Boteler at Riverford Organic Farmers, Stephanie Wall at Palatine Private Equity and Kye Gbangbola at Total Eco Management  joined to discuss how the pandemic has been a wake-up call to take ESG issues more seriously. Watch the session recording now.

Meet Our Inspiring Speakers

Andrew Boteler, Director of Finance at Riverford Organic Farmers

Andrew is the Finance Director of Riverford Organic Farmers Riverford, an organic farm and UK-wide organic vegetable box delivery company founded in Devon, with sister farms in two other locations around the country. The founder aimed to find an effective way of distributing his produce via a vegetable box scheme, delivered direct to customers' doors with locally grown produce. Today, they are the largest organic fresh food retailer in the UK. What makes Riverford unique is the desire to do better than vague claims of social responsibility and greenwash so they try to make informed decisions about the important issues affecting their farms, business and our environment. Riverford is an employee-owned business.

Tim Stedman, CEO at Agilyx

Chartered Engineer and a Fellow of the Institute of Chemical Engineers (U.K.), Tim spent over 20 years at ExxonMobil where he was Business Director for the Basic Chemical business, an $8B revenue business and site manager for the Fife Ethylene Plant. A vice president of the Steering Board of PlasticsEurope, he now leads Agilyx the mission of which is to use innovative technology for good and help solve the problem of plastic waste. Only 10% of post-use plastic is recycled today. Agilyx’s advanced recycling gives post-use plastic a new, circular life by converting this valuable material back into its original building blocks for reuse. By enabling plastic circularity on a global and commercial scale, he aims to play a vital role in accelerating the shift to a low-carbon economy.

Stephanie Wall, ESG Director at Palatine Private Equity

Stephanie is passionate about sustainability and investing to create a more balanced, greener, cleaner and successful society. At Palatine, Stephanie delivers ESG leadership throughout the investment lifecycle, engaging with management teams to assess and manage ESG risks and value creation opportunities. Applying the ESG lens to investments stimulates innovative thinking that helps business leaders respond to the challenges we’re facing and grow a future-ready, sustainable business. Responsible investing is critical to scaling the solutions to achieve a future that works for society and planet alike. She is also responsible for the implementation of the award-winning ESG framework and for driving internal ESG improvements.

Kye Gbangbola, Founder of Total Eco Management

Kye has been an executive and non-executive director for large and small organisations for 30 years. As the world re-emerges, he believes it’s time to re-double our efforts to 'Build Back Better’. To respond to the climate crisis, and the need for sustainable global economies where we can all thrive, he created TEM, an award winning sustainability consultancy, that works in all sectors and were the official Corporate Sustainability reporting consultant to the London 2012 'Sustainable' Olympic Games. In 2010, Kye was instrumental in the Carbon Action 2050 providing 50 practical actions any built environment professional can do to secure the planet. For the last 7 years, Kye has been Chairman of the Sickle Cell Society; a national patient Charity with global reach. He is on the Board of an international benevolent fund and is sustainability ambassador to the Chartered Institute of Building.

Why ESG matters – and what businesses can do about it

Leaders know that social and environmental governance matters. But how much? Protiviti’s Collaboration Forum discovered why they have reached a tipping point – and there is no going back.

“Humans are drilling underneath the earth’s surface for hydrocarbons. We are burning them; or making them into plastic, and then burning them, or throwing them into the oceans. The cycle continues – and it’s nuts.”

Tim Stedman delivered a passionate speech during Protiviti’s Collaboration Forum. The chief executive of recycling firm Agylix spent 20 years working for ExxonMobil and understands the chemical industry well. He said hydrocarbons were important, but they should be used “more carefully” in future.

He argued that throwing out single-use plastic wasn’t the answer. The global vaccination programme for Covid-19 wouldn’t have been possible without it, he said. But now was the time to be “honest with ourselves” about how to best use plastic. He was anchored in the reality that many businesses face, but with an eye on how to do things better.

“Today, 90 per cent of the world’s plastic produced is ‘leaked’,” he said. “It’s not going into proper waste systems: some of goes into the ocean and some of it is littered; very little is recycled. We want to guard those molecules and recover them.

He added: “We can use them to support quality of life and the climate change agenda. If you look at the electric vehicles, for example, hydrocarbons can be used in a high-quality way. At the other end of the spectrum are single-use bottles of shampoo in hotels. They are a terrible idea.”

Sustainability is often referred to in business. Like ‘corporate social responsibility’ a decade ago, the word has been used with good intentions. But some companies have been criticised for ‘greenwashing’: making themselves sound better at protecting the environment than they actually are.

Over the past few years, however, awareness of environmental issues has reached a tipping point in society, because of climate change. Social inequality has grown, and the problem has been compounded by the Covid-19 pandemic. As a result, people are now demanding that governments and businesses do their bit to tackle these challenges.

The commercial world has been forced to adjust. Legislation is focussed on reducing the impact of companies, but they have also responded to public sentiment. Customers are voting with their wallets, employees are choosing brands that care, and investors have realised they can make more money by backing businesses solving these problems.

This awareness has also helped to amplify the concept of environmental, social and corporate governance (ESG). While ESG has been around since the 1960s, as a tool for investment funds to focus on social and environmental outcomes, it has only reached prominence recently.

“ESG reporting is about organisations evidencing their contributions towards sustainable global economies that protect our planet, with all of the splendour and beauty that David Attenborough describes,” said Kye Gbangbola, founder of Total Eco Management.

“Investors and staff have shifted their support to sustainable organisations and there is growing legislation around ESG reporting. The Companies Act now requires directors to produce a report on gender, greenhouse gases and human rights issues. There are also stock exchanges around the world that will only list companies with a sustainability report.”

But what does ESG look like in practice? Riverford Organic Farmers, which delivers vegetable boxes to 50,000 customers a week, was founded by entrepreneur Guy Singh-Watson more than three decades ago. It has grown from one man and his wheelbarrow into a company with 650 people. It is also a certified B Corporation, which is a fast-growing global standard for companies making a positive impact.

According to Andrew Boteler, director of finance at Riverford, an environmental and social ethos is embedded: first, the company has to be a commercial success, so it can support its values; secondly, Riverford is employee-owned, which helps decision making and creates a shared vision. Andrew also said the company “lived by our brand” and wanted to be force for good for people and for the planet.

“Those four principles have equal weight in our business and our decision making,” he said. “If we are making an investment decision, for example, all of those four criteria will be looked at. I think we make better decisions because of them. And they also create a circle, so they feed each other.

“It’s not really a case of ‘should we do it’,” he added, “it is a sensible thing to do. Your business will be better if you move in this direction. In fact, I think one of the challenges we have, doing this for 36 years, is making sure there is clear water between us and the rest.”

Despite poster companies like Riverford championing good business, many are still overwhelmed by what they need to do. Changing business processes and reducing the impact of operations takes education and action. It can be confusing to know where to start.

“I think it does overwhelm people,” said Stephanie Wall, ESG director at Palatine Private Equity. “But the biggest mistake to make is not doing anything for fear of failing. This is about digging down into your business. Do a screening exercise of what matters to your employees, investors, customers and suppliers.

“Instead of risk management, consider the opportunity to create value from the opportunities you find. Because this area is a real commercial opportunity. Use a framework to measure what you are doing and link it to your business strategy. This shouldn’t sit on the side of someone’s desk. It needs to be integrated into your growth plans.”

The commercial opportunity Stephanie talks about has been growing fast. The amount of money flowing into responsible investment funds quadrupled in 2020 and is expected to keep growing. It is robust evidence, alongside a raft of headlines, about the long-term importance of environmental and social issues.

“The writing is on the wall,” said Kye Gbangbola. “People are choosing to work for companies with sustainability credentials; children, including my own, are setting up green teams in schools. Let’s encourage people to move towards a better future for us all.”

Tim Stedman added: “There is no silver bullet here; it’s not a case of waving a magic wand. But it is about taking steps and looking for solutions. People prejudging these solutions are potentially doing as much damage as those saying these issues don’t exist.

“The problem is so big we’ve got to try as many different solutions as possible. And over time, the solutions that make a difference will come to the top. But we’ve just got to get going. I think that’s the key thing.”

Andrew Boteler, Tim Stedman, Stephanie Wall and Kye Gbangbola were speaking on series five of Protiviti’s collaboration forum, which has been held online on Thursday mornings during the past year. To find out more about the event, which will now run until then end of June 2021, click here.

Leadership

Peter Richardson
Peter Richardson
Peter leads Protiviti’s focus on The Future of Work globally. In helping clients face the future with confidence in an ever more dynamic world, he emphasises rebuilding the operating model and future of work engine by empowering teams, equipping them to contribute fully ...
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Paul Middleton
Paul Middleton
Paul joined Protiviti in August 2018 and leads our capital markets business in London. Focused on 1st Line trading and risk management initiatives, Paul works closely with our global Solutions to shape advisory, transformation and remediation initiatives across ...
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