Sustainability Leadership - Finans Norge€¦ · Sustainability leadership is where organisationsproactively engage with external forces such as climate change, forest destruction,

Sustainability Leadership

Paul Begley, Director, Customised ProgrammesOslo, 17 October 2019

“Companies that don’t adapt [to climate change] – including companies in the financial system – will go bankrupt without question.

But there will be great fortunes made along this path aligned with what society wants”

Mark Carney,

Governor of the Bank of England, July 2019

Climate change will shape the future of capitalism

Subtitle here can go quite a long way but not past the white line

Title of your slide here can go over two lines

What is sustainability leadership?

Sustainability leadership is where organisations proactively engage with external forces such as climate change, forest destruction, public policy, changing consumer preferences and poverty alleviation.

The key question is not ‘how do you succeed in spite of rapidly changing social, environmental and economic issues?’ but rather ‘how can these changes fuel your success?’

My guide to sustainability leadership

1. Calibrate your worldview

2. Set a ‘North Star’ for progress

3. Understand your business

4. Engage key decision-makers

5. Find things that make a difference

6. Communicate clearly

7. Whatever you do, don’t lose









A. 50 years

B. 60 years

C. 70 years

Question 1:

What is the life expectancy

of the average human in

the world today?

A. 20 percent

B. 50 percent

C. 80 percent

Question 2:

Globally, how many one

year old children have been

vaccinated against some

disease?

A. 20 percent

B. 40 percent

C. 60 percent

Question 3:

In all low-income countries

across the world today,

how many girls finish

primary school?

Answers

A. 50 years

B. 60 years

C. 70 years

Answer 1:

What is the life expectancy

of the average human in

the world today?

If you answered “B. 60 years”, you would have been

right in 1973!

A. 20 percent

B. 50 percent

C. 80 percent

Answer 2:

Globally, how many one

year old children have been

vaccinated against some

disease?

People generally get this wrong. In fact, of 108 audiences

surveyed, a group of donors from Swiss Aid scored the worst

results, with most people answering 20 percent.

A. 20 percent

B. 40 percent

C. 60 percent

Answer 3:

In all low-income countries

across the world today,

how many girls finish

primary school?

There are now only a few countries in the world where

fewer than 20 percent of girls finish primary school

• We are often wrong about the world

• In many instances, not only are we incorrect

but we think the exact opposite to what is

happening

• Often our decisions are informed by the

wrong world view









We know where we want to go…

But we are not mobilising finance, innovation, energy and effort quickly enough

Nedbank’s FairShare 2030 tilts the loan book to sustainability outcomes:

✓ Recognises that Nedbank should not do everything but needs a proactive response

✓ Lending informed by the social and environmental needs of South Africa

✓ Robust analysis of the investable opportunities –and work with partners to create new vehicles

✓ Absolute targets, not relative ones

Finding the North Star is critical

https://www.youtube.com/watch?v=FWei2jjBnNE

Future we’d get

Future we want

TIME 2050

Su

sta

ina

bilit

y

2019

Exam question: What is your unique contribution

to a world of 9 billion people?









The nature of value in the 21st Century is changing quickly: what risks do you have?

There is a major transformation underway in the world

Direct impacts:

The coastal power

station:

How will changing sea-

levels affect the

company’s ability to

repay its loan?

Future liabilities:

Companies are

increasingly being

called up for historic

activities. Should oil

and gas companies pay

the cost of flood

defences?

Ethical judgements:

Can pharmaceutical

companies be allowed

to benefit from sick

societies indefinitely?

Are banks fit to provide different forms of (climate) finance?

Our analysis shows that many organisations in the finance sector lack the culture,

procedures and behaviours to deliver.

• Many processes and risk models neglect/under estimate the risks of climate change.

Understanding the value at risk of today’s approach is as important as identifying

tomorrow’s opportunities.

• Individuals are incentivised for the status quo: often they lack knowledge and investment

opportunities, with inappropriate KPIs and bonuses.

• Availability of products: many organisations don’t have the necessary confidence to offer

products and services which can support the transition to a low-carbon economy.

• Alignment to career development: Culturally, climate finance often feels like it is career-

limiting or that investment decisions are driven by reputational benefits.

A bad investment into sustainability is still a bad investment









Education, education, education

• The average, male chief executive is now 57 years old. In many cases, members of the Board are much older.

• CISL’s analysis indicates that most leadership development programmes do not effectively consider the external context

• We believe that effective change can happen anywhere within an organisation

• Grant space, time and resource to continuous education.

https://www.cisl.cam.ac.uk/resources/sustainability-leadership/building-leaders-for-long-term-business-performance

Leaders in the 21st Century need to receive continuous education to change their world view. Our analysis shows that it should:

• Nurture purpose that is relevant to society, authentic and shapes strategy and action to align business success with the delivery of positive social and environmental outcomes;

• Build values, thinking and practice that are required to deliver on this purpose, and;

• Support reflection and adaptability, ensuring consistency, integrity and a meaningful level of ambition, holding itself accountable to deliver results.

We need to find a new form of leadership

development

https://www.cisl.cam.ac.uk/about/leadership-hub









Climate change in perspective

Copenhagen, 2009:

developed countries

pledged to mobilise

$100 billion a year by

2020.

MDB Finance: Of

the $100bn

distributed by

MDBs in 2014,

25% was

considered to be

‘climate finance’

Annual investment, globally,

c. £18 trillion

Annual green

infrastructure

investment needs

by 2020: $5-7

trillion

Data from the World Resources Institute

Ship goods more

efficiently

Drive an electric

car

Invest in high-

speed trains

Fly less … and on

fuel-saving planes

Ship goods more

efficiently

Drive an electric

car

Invest in high-

speed trains

Fly less … and on

fuel-saving planes

75.7 million cars off the road




The impact

is 7.5 times

greater!

What we prioritise makes a difference

Manage

refrigeration

chemicals

Install onshore

wind turbines

Cut down on food

waste

Eat more plants

and less meat

629 million cars off the road




Managing

refrigeration

chemicals is

nearly 10x

more

important

than electric

cars

What we prioritise makes a difference

Restore our

tropical forests

Manage

refrigeration

chemicals

Install onshore

wind turbines

Cut down on food

waste

Eat more plants

and less meat

Restore our

tropical forests429 million cars off the road









Frame communications clearly

“It is impossible”

is not the same as

“we cannot do it”

• Corporate activities are being scrutinised in new ways

• In the connected world, nearly everyone can express an opinion

• Bad news travels fast, civil campaigns mobilise quickly

• Are you aware of the ‘heroes’ and ‘villains’ in your business?

The social contract is being quickly redrawn









Thank you!

Paul Begley,

Director, Customised Programmes

University of Cambridge Institute for Sustainability Leadership

E: [email protected]

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Sustainability Leadership - Finans Norge€¦ · Sustainability leadership is where organisationsproactively engage with external forces such as climate change, forest destruction,