June 2024 Updates: Sustainable Business Insights
Stay informed with the latest additions to the Master Slide Decks for sustainability subscribers. Dive into updated topics on Sustainability Context, Frameworks, Business Cases, Leading Change, Climate Crisis, and Sustainable Procurement. Explore key insights on Canadian CEO pay trends and popular reporting frameworks in sustainability disclosures.
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Whats New What s New June 2024 edition Exclusive to Master Slide Decks subscribers
Reminders / FAQs What is this deck? Bob continuously refines, enhances, and updates his slide decks with information from the latest surveys, articles, books, reports, and other research. New versions of the Master Slide Decks every three months are accompanied by this Master What s New list of additions and significant updates so that subscribers can quickly zero in on the latest news. This What s New deck helps you stay current and credible. Reminder: Potential uses of the Master Slide Decks As a quick and easy way to build your own slide decks for presentations on sustainability-related topics. That is their main purpose, and why the ready-to-use slides are provided in .pptx format. Plagiarize like crazy. As micro-courses / tutorials / refreshers on key aspects of sustainability. Use the slides footnotes to further explore source documents of interest. As learning resources. Subscribing teachers can use the slides in their presentations, upload the decks to the database of student materials, and require that students use the slides as resources in assignments. As Coles Notes / Cliffs Notes of the key points in Bob s six books and two whitepapers. As an overview of over a dozen free, open-source tools downloadable from sustainabilityadvantage.com/ As a way to stay current and credible on hot topics. The What s New deck in subscribers quarterly updates includes slide-summaries the latest articles and reports about a variety of sustainability-related topics. As conversation starters with senior management. Share a subset of the slides with them with a What do you think ? invitation, and follow up with a meeting to discuss the relevance to the organization.
Table of Contents Topics Slide #s Updates to Sustainability Context deck 4-5 Updates to Sustainability Frameworks deck 6-26 Updates to Sustainability Business Cases deck 27-35 Updates to Leading Change deck 36-36 Updates to Climate Crisis deck 37-46 Updates Sustainable Procurement deck 47-59
Canadian CEO Pay Rises in 2022 The 100 highest-paid Canadian CEOs made on average $14.9M vs. average worker income of $60.6K The highest paid CEO made $151.8M The richest Canadian CEOs made 246 times more than the average Canadian worker an all-time high Canada s new gilded age: CEO pay in 2022, Canadian Centre for Policy Alternatives (CCPA), January 2024. Based on a study of compensation paid to 100 highest-paid CEOs in Canada.
Popular Reporting Frameworks % of sustainability reports that used or referencedthe following frameworks: SDGs: 83% GRI: 77% TCFD: 71% SASB: 52% The State Of Play: Sustainability Disclosure And Assurance 2019-2022 Trends & Analysis, IFAC, AICPA and CIMA, Feb. 2024. Based on 2022 reporting of market practice by 1,400 companies across 22 jurisdictions.
Sustainability Assessment Frameworks Self-assessment Frameworks GRI SDGs <IR> B Corp BIA SASB TCFD/ISSB WEF Metrics EU CSRD/ESRS UNRISD SDPIs Other company Company- chosen goals FFBB BSAT & NAD Company performance today Necessary, science based goals Baseline year Other company 3rd-Party Ranking Frameworks CK Global 100 3BL 100 Best CDP EcoVadis
Corporate 2024 Sustainability Priorities 5 Charts to Educate Your Sustainability Strategy in 2024, Reuters, December 2023.
EU Reporting: CSDDD, CSRD, ESRS Corporate Sustainability Due Diligence Directive (CSDDD) Requires companies to take responsibility for their environmental and social impacts, as well as those of their suppliers. Effective 2023. Corporate Sustainability Reporting Directive (CSRD) Requires that companies disclose sustainability issues from a "double materiality" perspective. Replaces the Non-Financial Reporting Directive (NFRD) Effective 2024-2028, depending on company size. European Sustainability Reporting Standards (ESRS) Establishes guidelines on what companies should include in their sustainability reports, including on climate change, water and resource management, biodiversity, human rights, labor practices, diversity and anti-corruption measures. Introduces the concept of double materiality, and expands a company s reporting boundary to its entire value chain. Effective 2024-2026, depending on company size. CSRD, CSDDD, ESRS and more: A cheat sheet of EU sustainability regulations GreenBiz Two Steps Forward blog, June 2023.
EU Corporate Sustainability Reporting Directive (CSRD) Applies to companies with 40M in net revenue, 20M in assets, or 250+ employees, and some non-EU companies with substantial activity in the EU Companies required to use the European Sustainability Reporting Standards (ESRS) to report on their and their supply chain s Environmental protection Social responsibility and treatment of employees Respect for human rights Anti-corruption and bribery Diversity on company boards (age, gender, educational and professional background) Country by country reporting on taxes 1. Climate change mitigation 2. Climate change adaptation 3. Water 4. Circular economy 5. Pollution 6. Ecosystems Non-Financial Reporting webpage, European Union. Replaces the 2014 Non-financial Reporting Directive (NFRD)
EU Corporate Sustainability Due Diligence Directive (CSDDD) Companies must integrate due diligence into policies and strategies, identify actual or potential adverse human rights and environmental impacts, and end or minimize actual impacts in company operations, subsidiaries and supply chains. Companies must implement climate transition plans aligned with the Paris Agreement Sanctions if fail to produce a CSRD report: Fines as high as 5% of the company s global revenues, or bans from public procurement in the EU. In France, fine of up to $81,400 (75,000 euros) and jail time of up to 5 years for directors. Applies to companies with >500 employees, and > 150 M in annual revenues Later, applies to companies with >250 employees, and > 40 M annual revenues. Applies to non-EU companies with annual revenues earned in the EU above these thresholds. EU Parliament Votes to Require Companies to Introduce Climate Transition Plans, ESG Today, June 2023.
CSRD / ESRS Coverage of Core Issues Impacts on Society Impacts on Environment Community impacts Purpose & Governance Procured Goods & Services Taxes & Donations Business ethics Energy Lobbying Water Investments Impacts on Employees Impacts on Environment Wages GHG emissions Health /wellbeing Non-GHG emissions Employment terms Waste Concerns process Encroachment Diversity & Inclusion
Proposed B Corp Certification Requirements B Corps must meet all core requirements on 10 core topics Second consultation draft of the B Corp Certification standards, January 2024.
Proposed New Performance Requirements Second consultation draft of the B Corp Certification standards, January 2024.
Proposed B Corp Performance Impact Topics Purpose & Stakeholder Governance (PSG): B Corps act in accordance with a defined purpose, contributing to an inclusive, equitable, and regenerative economic system for all people and the planet. Workplace Culture (WC): B Corps have positive workplace cultures with meaningful worker dialogue. Fair Wages (FW): Workers can afford a decent standard of living for themselves and their families, and there is wage equality among the workforce. Justice Equity Diversity & Inclusion (JEDI): B Corps have inclusive and diverse work environments and contribute meaningfully to just and equitable communities. Human Rights (HR): B Corps treat people with dignity and respect their human rights. Climate Action (CA): B Corps take science-based action to combat climate change and its impacts. Environmental Stewardship and Circularity (ESC): B Corps demonstrate environmental stewardship and contribute to the circular economy in their operations and value chain, minimizing any negative impact and pursuing positive impact. Government Affairs and Collective Action (GACA): B Corps play a leadership role in fostering shared understanding, solutions, and implementation towards an equitable, inclusive, and regenerative economy, including contribution to the public infrastructure they utilize and rely upon for their success. Complementary Impact Topics (CIT): B Corps comprehensively identify and measure a wider set of impacts of their business, in addition to the core Impact Topics, and improve upon them over time. Second consultation draft of the B Corp Certification standards, January 2024.
B Corp Performance Sub-Requirements Sub-requirements: For some Impact Topics there are a set of sub- requirement options a company can choose from Initial or Recertification: Some sub-requirements are at initial certification only, at subsequent recertifications only. or at all certification cycles Context-based Performance Requirements: Size:7 sizes, based on # of workers and revenue XX Large X Large Large Medium Small Micro Sole Proprietor Location: 3 classifications, allowing of operational barriers Based on 5 country / territory classification indices used by others Sector / Industry: The usual classifications Second consultation draft of the B Corp Certification standards, January 2024.
Proposed 3-Level Performance Evaluation The minimum expectation from companies will be to Meet all applicable sub- requirements Second consultation draft of the B Corp Certification standards, January 2024.
UNRISD SDPI Sustainable Development Performance Indicators (SDPI) Produced by UNRISD (United Nations Research Institute for Social Development), with help from Mark McElroy, Bill Baue, Ralph Thurm, and others. Online tool Allows users to assess impacts or performance in relation to historical precedent, international agreements, and scientific thresholds (i.e., context-based) Includes significant economic analysis Produces an automatically generated report, with trend analyses https://sdpi.unrisd.org/
SDPI Coverage of Core Issues Impacts on Society Impacts on Environment Community impacts Purpose & Governance Procured Goods & Services Taxes & Donations Business ethics Energy Lobbying Water Investments Impacts on Employees Impacts on Environment Wages GHG emissions Health /wellbeing Non-GHG emissions Employment terms Waste Concerns process Encroachment Diversity & Inclusion
Global 100 Publicly-listed companies Revenue > $1B The Global 100, Corporate Knights, January 2024.
CDP A Lists Three A Lists 1. 2. 3. Climate change (346) Water security (101) Forests (30) The A List 2023, CDP, February 2024.
Triple Layered Business Model Canvas Alexandre Joyce and Raymond L. Paquin , The triple layered business model canvas: A tool to design more sustainable business models, Elsevier Journal of Cleaner Production 135, June 2016.
Stage 4 Embedders See More Business Value It s time to move from doing sustainability to embedding sustainability as a core part of the business. It s good for the world and for business value. Beyond checking the box: How to create business value with embedded sustainability, IBM Institute for Business Value, Feb 2024.
Sustainability Benefits Master list Purpose fulfillment Contribute to SDGs Reputation Loyal customers Revenue growth Savings: energy, water, materials, waste, carbon, maintenance, insurance, etc. Proud, energized and engaged employees higher productivity, hiring and attrition savings New funding sources; easier access to capital Increased asset values Increased brand and market value Social licence to operate Avoid risks of inaction flip side of all the above + https://sustainabilityadvantage.com/businesscases/project-level-business-case/
Project Appraisal Tool Project A Project B Project C % Appraisal Criteria Score (1-5) Weighted Score Score (1-5) Weighted Score Score (1-5) Weighted Score Weight Project Description / Purpose fulfillment Weighted Score Weighted Score Weighted Score + Helps fulfill Purpose + Aligns with long-term strategic plans + Improves environmental and social impacts % Score Score Score Weight Opportunities arising from the project + Savings on operational and HR expenses + Increased revenue + Lower cost of capital + Higher asset values and market value Weighted Score Weighted Score Weighted Score % Score Score Score Weight Risks avoided % Weighted Score Weighted Score Weighted Score Score Score Score Weight + Monetized risks of not doing the project Capital Required (CAPEX) and Sources + New sources of capital % Weighted Score Weighted Score Weighted Score Score Score Score Weight Financial Analysis / ROI Payback Period, IRR, NPV Total Total Total 100% Project with the highest total weighted score is funded
Drivers of Sustainability Strategies 5 Charts to Educate Your Sustainability Strategy in 2024, Reuters, December 2023.
WEF Most Severe Risks to Economies The Global Risks Report 2024, World Economic Forum (WEF), January 2024.
Global Risks: Interconnections The Global Risks Report 2024, World Economic Forum (WEF), January 2024.
10 Takeaways From Davos 2024 Sustainability is a business imperative. Companies that take courageous net-zero action can accelerate value creation. Performance and diversity are not mutually exclusive. Better women s health is correlated with economic prosperity. A comprehensive approach to transformation is most effective. Four essential elements for success will, skill, rigor, and scope The generative AI revolution is only just beginning. Speed is crucial to outperformance. Cooperation is multifaceted and can coexist with competition. Business leaders need to focus on matching top talent to the highest-value roles. The best CEOs leave organizations in a better place than they found them. Don t overlook India s potential. 10 Takeaways From Davos 2024, McKinsey, January 2024. the 54th Based on themes at the annual meeting of the World Economic Forum (WEF), where delegates from global business, government, civil society, media, and academia convened.
Resources Sustainability Assessment Tools Sustainability Business Case Tools Sustainable Procurement Toolkits sustainabilityadvantage.com
Global Temperature Above Pre-Industrial Levels 1.48 C average in 2023 The 2023 Annual Climate Summary: Global Climate Highlights 2023, Copernicus Climate Change Service (C3S) , January 2024.
2023 Was The Warmest in 125,000 Years Decarbonization: Stocks and flows, abundance and scarcity, net zero, Nat Bullard, January 2024.
The High Cost of Climate Disasters Decarbonization: Stocks and flows, abundance and scarcity, net zero, Nat Bullard, January 2024.
Battery Technology Is Improving Decarbonization: Stocks and flows, abundance and scarcity, net zero, Nat Bullard, January 2024.
Solar Efficiency Up, Prices Down Decarbonization: Stocks and flows, abundance and scarcity, net zero, Nat Bullard, January 2024.
How to Fix the Climate Crisis Decarbonization: Stocks and flows, abundance and scarcity, net zero, Nat Bullard, January 2024.
How Fossils Spend Their Profits Visualized: How the Oil and Gas Industry Spends Its Profits, Elements.VisualCapitalist.com, Dec. 2023. Based on data from the International Energy Agency (IEA).
Sustainable Procurement: Definition Obtaining best value for money by purchasing themost sustainable goods and services from the most sustainable suppliers in support of the buyer s purpose, policies, and strategic goals. Sustainable Procurement makes sustainability matter to suppliers, because the scores on sustainability attributes of suppliers are significantly weighted (10%-30% of the points) in their customers bid appraisal. sustainabilityadvantage.com/sp/overview/
Net-Zero Procurement (NZP): Definition Obtaining best value for money by purchasing the most low-carbon goods & services from suppliers who are most committed to science-based net-zero GHG reduction targets, in support of the buyer s purpose, policies, and strategic goals. Net-Zero Procurement makes GHG reductions matter to suppliers, because the scores on supplier commitment to science-based net-zero targets are significantly weighted (10%-30% of the points) in their customers bid appraisal. sustainabilityadvantage.com/sp/overview/
Top Drivers of Sustainable Procurement Sustainable Procurement Barometer 2024, EcoVadis and Accenture, February 2024. Based on data collected from nearly 600 buyers and more than 1,000 suppliers, worldwide.
Most Significant SP Issues Sustainable Procurement Barometer 2024, EcoVadis and Accenture, February 2024. Based on data collected from nearly 600 buyers and more than 1,000 suppliers, worldwide.
