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Weekly Short
5 April, 2024
On Tuesday, Giles and Larissa from Good Business sat down with Alex Rhodes and Dan Gray from law firm Mishcon de Reya, and friend and client of Good Business Michelle Norman (Head of Sustainability at Suntory Beverage Food Europe) to talk about the new wave of ESG regulation, double materiality assessments and reporting. And, importantly, what it means for your sustainability strategy. The heart of the discussion focused on how to navigate the shift towards ever tighter regulation while remaining focused on transformational business change.
There was acknowledgement that this isn’t without its challenges, particularly at this moment in time, when companies are still on a learning curve. Questions from the audience affirmed common dilemmas around how much resource to put to following the processes needed to meet the new regulatory requirements, while balancing the desire to invest in activities which will drive substantive change. And there were interesting discussions around the importance of governance structures to build authority into the processes being established and ensure that claims are delivered against and data is robust and comes with integrity. As Giles put it – perhaps it’s time for the increasingly maligned ESG shorthand to become GES – to emphasise the fact that governance is the foundation of impact.
We also discussed that while for some, regulation may be the primary driver for action (and if you need a refresher, check out Mishcon de Reya’s excellent summary), there are benefits to all businesses in taking learnings and insights from the alphabet soup of regulation. This paradigm shift is creating a blueprint for what best practice in sustainability looks like. For any company that aspires to lead there are valuable lessons to be learned, whether regulation demands it of you now or not, from conducting a double materiality process to identify immediate and emerging risks and uncover potential avenues for value creation in the near term, to reflecting on more transparent, comparable, and effective sustainability disclosures.
There was also a great challenge around the scale of the issues we face – as GHG levels and global temperatures reach new record highs – and agreement this regulation certainly isn’t sufficient to drive the urgent action this demands. Regulation plays its part, putting a clear stake in the ground on the importance of business’s impacts on the world, and of these issues on their business, but we need activists from all sides to drive transformative change.
We’re excited to be working with Mishcon Purpose to deliver better, more meaningful sustainability engagements. We believe that the combination of legislative and regulatory rigour and strategic and opportunity-focused consultancy can unlock real value for clients and help drive action of the scale and impact the world demands. If this appeals, please get in touch.
By Budd Nicholson