Customers, collaboration and your team
Consumer expectations are changing much more quickly than government policy in respect to the transition to a low-carbon economy, says Alison Barrass CFInstD.
Barrass, whose governance roles span the primary sector, energy and insurance, says this has changed the tone of the conversations she heard around climate strategy on a recent visit to North America – in part due to the growing realisation that climate-influenced heatwaves and flooding show climate change is already upon us.
“Although governments are slow to move, although politics makes this very difficult, consumers want this shift. Consumers are living with the impacts of climate change daily now,” she said at the Chapter Zero New Zealand breakfast event “A kōrero on managing a climate strategy” in September.
“Consumers want companies to be accountable. They don’t want greenwashing. They don’t want token gestures. They actually want this to be at the heart of what organisations do. That’s the shift that I saw.”
Barrass was part of a panel discussion on climate strategy that drew on her real-world experience, and those of Genesis Energy CEO Malcolm Johns and sustainability consultant Lee Stewart MInstD.
From an executive team perspective, Johns advised boards to pay attention to the role of the CEO in establishing an effective sustainability culture within an organisation.
“If you are a chief executive, and you are not a sustainability practitioner, then that’s the starting point of issues when dealing with climate change,” Johns says.
He advises boards to consider three phases of climate discussion and work out which phase they are in:
- Climate change or sustainability is something you look at after other business is complete.
- Sustainability is one of the things you talk about as an item of business strategy.
- Sustainability is fully integrated into business strategy.
“What you are doing is ticking a box, if you are in those first two phases,” Johns says.
Stewart picked up on the point that boards need a good relationship with the executive team, particularly the CEO, because sustainability goals must be understood and acted on throughout an organisation – and added that Barrass’s observation about consumer expectations could provide a board with a winning way to influence the exec team.
“Your biggest driver is your client,” Stewart says, “and you are in business to make money. If you can advance your sustainability view and link it to a customer-centric proposition – that’s where I have overcome resistance.”
Lean into it
Asked to suggest one thing a board could do in order to get their sustainability conversations moving, Barrass noted the importance of collaborative discussion and reaching a shared position.
“You need to lean into the expertise you have around you but understand that, as a director, it is a core part your job to be across this and to formulate a response.”
Stewart suggested individual directors “go on a field trip, take a walk” and get a sense of the views held within their organisation.
“There will be people in your organisation who have been thinking about this for a decade,” he said.
Johns, who served as chair of the APEC Business Advisory Council leading the regional trade policy task force for climate change, stressed that although there are widely varying attitudes to climate action around the world, New Zealand directors “should sweep our front yard”.
The last word fell to the facilitator, director and consultant Ben Kepes CFInstD, who urged boards to create a legacy and “hand something over in a better state than we got” to incoming directors.
