SR Inc Member-Clients gathered virtually on Thursday, December 10th for the Sustainable Business & Enterprise Roundtable (SBER) fourth quarter Executive Symposium. Member-Clients heard from SR Inc Member-Clients Evan Harvey, Global Head of Sustainability at Nasdaq, and Chris Famolare, Global Manager of Sustainable Operations at MilliporeSigma.
At the beginning of the event, it was SR Inc’s privilege to recognize Barbara Donaldson, the Senior Vice President of Workplace Resources at Synopsys as the SBER Outstanding Corporate Executive of 2020. It was equally a privilege to recognize MilliporeSigma as the SBER Outstanding Corporate Leader of 2020. Theirs is a great example of what executive and corporate leadership can look like and we will be publishing a press release on their accomplishments in the coming weeks.
The first half of our discussion centered on ESG leadership and ESG reporting strategy, with a presentation on management research and best practices from SR Inc CEO Jim Boyle and updates from Evan Harvey and Chris Famolare. Member-Clients should visit the Digital Library for a full summary and annotated slides, but key takeaways from Jim’s presentation include:
1. As illustrated in “Level 5” of figure below, investor attention has made ESG a C-Suite issue, requiring all public companies to move decisively to create a board-endorsed ESG strategy. Leading companies are incorporating their ESG strategies into their brand promise and value propositions.
2. The leading ESG standard setters and reporting frameworks – GRI, CDP, IIRC, SASB, and TCFD – are working together to rationalize their frameworks, standards, and processes ahead of increasingly likely mandates for ESG reporting.
3. SR Inc has issued an RFI regarding ESG software to CDP-accredited providers helping to collect and organize ESG data – from carbon emissions to employee diversity – and provide metrics & dashboards aligned with key frameworks. SR Inc will be working with Member-Clients to finalize this proprietary research in the coming service year.
4. Biden appointed former Secretary of State John Kerry to a new cabinet level post to lead the U.S. back into the Paris Climate Agreement which likely include announcing a Nationally Determined Contribution before COP26 in November, including Biden’s promised Net Zero Emissions electricity by 2035. Former EPA Administrator Gina McCarthy will be Biden’s White House climate czar to lead the charge domestically.
5. The Securities & Exchange Commission (SEC), an independent commission influenced by presidential appointees, may well require public companies to disclose GHG emissions & climate-related financial risks.
Jim then turned to Evan Harvey, Global Head of Sustainability at SR Inc Member-Client Nasdaq, which is one of the world’s leading stock exchanges. Evan has an internal and external facing role to help disseminate best practices and bring together the world’s leading stock exchanges around ESG high-performance. Nasdaq has demonstrated this move to operationalize high ESG performance both in its own operations and in how it seeks to help listed companies. In one important effort, Evan took the initiative to produce and integrate what SR Inc sees as best practice guidance in the ESG Reporting Guidance 2.0 released last year. Evan spoke about the increasing consolidation and harmonization among analytics, service, ranking, and rating organizations and about the growing regulatory wave.
Specifically, Evan highlighted the proposal Nasdaq recently filed with the SEC that would require all companies on the exchange to disclose the breakdowns of their boards by various dimensions of diversity; companies that do not have at least two diverse directors would have to explain why. With fresh Biden appointees, the SEC may well accept the Nasdaq proposal and also require public companies to disclose GHG emissions and climate-related financial risks. These disclosures might be aligned with the Taskforce on Climate-related Financial Disclosures like the European Union and United Kingdom are proposing. Amidst the increasingly likely possibility that public companies will have to disclose ESG factors publicly in 2021, Evan spoke about how now is the time for companies to prepare to be compared to other companies on a level playing field.
Attendees then heard from Chris Famolare, Global Manager of Sustainable Operations at MilliporeSigma – the life science business of Merck KGaA, Darmstadt, Germany which has some 58,000 employees across 66 countries. As the leader of a cross-functional global team, Chris is responsible for delivering on the company’s sustainable operations strategy. In his position, Chris leads on developing and achieving targets related to GHG emissions, green power, energy efficiency, water, and waste – driving continuous improvement in these areas. In his presentation, Chris spoke of their new sustainability strategy, which includes a goal to reach climate neutrality across Scope 1, 2, and 3 by 2040.
Chris finished his presentation discussing ways companies can incentivize employees to live more sustainably in their own lives. In addition to offering free EV charging at MilliporeSigma sites across the world, the company provides incentives for U.S. employees to install solar on their homes, conduct home energy audits, and purchase or lease hybrid and electric vehicles. MilliporeSigma is one of many SR Inc Member-Client companies that offer sustainability programming for talent at home, which is more important than ever now that many employees are working from home.
Other emerging trends SR Inc is helping clients with include offering educational events and training opportunities for talent, offsetting emissions of employees working from home, and providing employees with access to renewable energy.
