2023 SBER Q3 Symposium

SR Inc held our Q3 2023 Executive Symposium on September 21st at the Library Hotel in New York City, in-person as well as virtually. Member Clients in attendance heard from SR Inc experts and participated in discussions on two major topics: the Mandatory Reporting Revolution & Sustainability Function Design, followed by a session on Complementing Your Global Net Zero Emissions Strategy with a Grid Proximate, Real Zero Energy Strategy.

The first portion, moderated by SR Inc CEO Jim Boyle, addressed opportunities for Sustainability Strategy Leadership. Jim highlighted the necessity of finding optimism in corporate collaboration and creativity as sustainability leaders work to develop strategies to address enterprise performance in a world shaped by climate breakdown. Key takeaways from this discussion include:

1. Sustainability leaders need to distinguish between the conduct and impact they control and the broader systems-level global success they do not control.
2. Sustainability leaders can find great optimism in their shared courage, collaboration, and creativity as change and uncertainty continues to increase.
3. Sustainability leaders should recognize that the most calamitous disruption now seems unlikely but a temperature rise of 2.7 C – if all nationally determined reductions are achieved – is expected to cause unprecedented disruption.
4. Sustainability leaders will benefit from drawing on respected geo-strategic analyses that take into account expected biophysical realities to balance the inability of linear financial models to “see” second order effects, as well as asymmetrical systemic risks that end some markets and reshape others. 
5. Member-Client leaders have an opportunity to develop a responsible way to understand & report higher temperature scenarios that avoids inaccurately communicating that enterprise performance is expected to be more impressive at higher temperatures.

SR Inc experts in mandatory reporting and sustainability function design then built on this conversation, presenting newly developed guidance on two central topics: the IFRS S1 and S2 reporting standards and corporate sustainability function design. These presentations included information on California’s bills requiring reporting on GHG emissions and climate-related financial risks, as well as SR Inc’s RFI on external CSRD support services. Key takeaways include:

1. Informed approaches to sustainability function design, based on comprehensive understandings of how other companies approach their departmental structure, will aid in guiding Member-Clients to the most effective internal operations.
2. Between the growing technical need from emerging mandatory reporting frameworks, as well as increased ambition more generally, companies are nearly unanimously looking to expand both team size and budget size.
3. The release of the IFRS S1 and S2 disclosure standards signals the success of sustainability reporting consolidation efforts and a step toward comparable TCFD-aligned disclosure standards for companies listed in Commonwealth nations.
4. The revised CSRD reporting standards lower the burden on reporting companies, but CSRD still poses the biggest challenge for Member-Clients to contend with in a simplified reporting landscape dominated by CSRD, IFRS S1 and S2, and the SEC’s forthcoming climate rule.

This presentation of research was followed by a discussion led by Member-Client executive Leila Costa, PTC’s Director of ESG Metrics & Reporting. Leila shared insights about the structure of PTC’s ESG function and how PTC expects mandatory reporting to impact internal processes.

PTC is working to leverage their distributed governance structure to successfully comply with mandatory reporting, while working through pain points such as complex organizational structure and conflicting priorities. In her role, Leila works to orchestrate alignment across the organization around ESG governance and strategy. Leila fielded questions from participants representing several high-growth technology, consumer goods, and financial services companies, offering insights into effective governance and management of ESG priorities.

The next portion of the Q3 Symposium focused on decarbonization, including complementing Net Zero strategies with collaborative and public policy-focused strategies that work to advance longer-term efforts towards “Real Zero.” Key findings highlighted during this session and discussion are as follows:

1. The vast majority of Member-Clients’ corporate decarbonization strategies are founded on prioritizing early carbon abatement (Emission First) versus pursuing 24/7-based strategies.
2. Emission First strategies will ultimately evolve into 24/7 roadmapping aligned with local government policy and utility objectives to achieve Real Zero.
3. SBTi guidance and the GHG Protocol for Scope 1, 2, & 3 emissions reduction goals explicitly enable decarbonization strategy flexibility and Emissions First-based strategies. 
4. Corporate global decarbonization strategies to set and achieve SBTs are now driving the need for innovative mitigation strategies, including:
   1. For Scope 3: Supporting customers and suppliers in achieving their mitigation strategies, including joint mitigation efforts like value chain-aligned aggregated renewable energy procurements.
   2. For Scopes 1 & 2: Exploring new options in renewable energy markets beyond the most impactful solutions like VPPAs in the mature markets in the U.S., Europe, and UK.   
5. Market developments in key international geographies are enabling more impactful Scope 2 mitigation transactions as part of Member-Clients’ evolving global decarbonization strategies.  

Building on this conversation, Mike Mattera, Global Director of Corporate Sustainability & ESG Officer at Akamai Technologies led a discussion on corporate decarbonization at Akamai. He shared that Akamai is a founding member of the ZEROgrid initiative, which has a long-term focus of supporting corporate Scope 1, 2, & 3 decarbonization strategies to reach SBTi-defined Net Zero through renewable energy-sourced grids. ZEROgrid initiatives call for and enable corporate strategy alignment on critical areas for improvement including procurement, electrification, demand flexibility, transmission, and technology innovation. Mike underscored that no company or organization is too small to contribute to the transition to accelerate the transition to a zero-emissions, reliable, and affordable electric grid.

The Q3 Symposium presentation and best practice Member Advisories from both portions of the event can be found in the SR Inc Digital Library, accessible exclusively to Member-Client executives. Please contact info@sustainround.com to learn more about gaining access to the full extent of the SR Inc Digital Library. 

SR Inc looks forward to reconvening next at our Q4 Symposium on December 7 in Washington, D.C.