Key metrics and measuring principles need to be applied to ESG goals in order to turn them into commercially viable business goals. This means KPIs need to change. At every level.
Angela Hultberg, global director of sustainability, Kearney, during the ESG panel session at NextGen Nordics conference in Stockholm highlighted that: “Sustainability should be a business initiative. Costs [need to be] assigned to actions. Assign responsibility, and quickly get a handle on your supply chain. You can easily reduce scope 1 and 2 emissions, and find a way to commercialise. You will never get to net zero by doing projects."
Philip Haglund, founder and CEO, Gimi, agreed. “Set a target, and then define ‘What?’ and ‘How?’. Profitability is a natural aspiration. 80% of university graduates’ most important objective is to be very well off financially. But we have to find purpose in what we do,” he added.
Haglund is a firm proponent of education as being the seeds of change - school and college are where ambitions and values are forged. He explained even hugely successful start-ups that grow, often having started ‘with purpose’, get caught up in turning profit because most of them are borne from consumerism.
Defining a comprehensive approach to ESG, Asa Nilsson Billme, head of diversity and inclusion, Nordea, said: “Inclusion is the tool to leverage diversity”, utilising the different experiences to inform and effect change- in product teams, in customer feedback teams, in teams organisation-wide.
“We need the diversity to contribute to any change. If you don’t have a buy-in you will not be a part of change,” she added.
While interest is growing and these topics have gained huge momentum and exposure in the last few years, Hultberg says it is absolutely still a box ticking exercise.
“Many still do come at it from compliance point of view, which is purely hygiene factor, thinking they need it to attract investors. There's a vague sense of circularity that money can be made,” she said.
The panel agreed the current prevalent project-by-project approach will come back to bite in the future, when further regulation is ushered in. And regulation will help simplify the metrics to standardise sustainability reports.