Since the release of its climate disclosure rule in March, the US Securities and Exchange Commission has faced a series of legal challenges, ultimately leading it to put the rule on hold. Last week, the Commission filed a brief defending its rule, highlighting the importance of companies sharing comparable, relevant information to support investment decisions.
While the rule’s status is still up in the air, ESG topics remain top of mind for investors. In fact, a few weeks ago, these topics came up throughout the day at the Forbes Iconoclast Summit, a high-profile gathering to discuss the most pressing issues facing the economy, companies and investors. Here are a few nuggets that rose to the top:
AI – ay, ay, ay
Just about every session mentioned AI, and many reiterated how technology has surprised us—and will surprise us again. AI carries great potential for advancing sustainability programs and efforts, from energy optimization to workforce development, yet we also need to consider the massive amount of energy it requires. A recent Salesforce survey found 65% of sustainability professionals feel their company must balance AI benefits with environmental costs, and 81% said reducing AI’s emissions footprint is a priority. Still, 55% of sustainability professionals believe its impact on global sustainability progress will be net positive.
When it comes to energy, investors have power
One panelist pointed out three main themes creating winds for investing today—deglobalization, decarbonization and digitization. While some investors may divest from energy-intensive companies, several speakers encouraged the opposite: help them decarbonize. On a global scale, though, the energy transition depends on having enough capital for clean energy projects—and ensuring capital flows backing up the transition make money. This is a major challenge, requiring collaboration across countries and stakeholders, yet it also presents opportunities for responsible investments and innovation.
Just because you care doesn’t mean you have to be the expert
When looking for philanthropic opportunities in areas relevant to their business, companies should identify organizations with strong subject matter expertise already doing work on the ground. By creating long-term collaborations with those organizations, companies can have a much greater impact than starting from scratch. Equally important is knowing when to let go, giving those organizations the freedom to execute on their vision and strategy without imposing the company’s own priorities or KPIs.
Grow—but make it efficient and fair
A common theme throughout the day was that ESG works better when it’s true to a company, embedded in its DNA and strategy versus using cookie-cutter terminology or canned KPIs. The world has become much more complicated, and companies have an obligation to their stakeholders—including investors—to operate with long-term sustainability in mind. To have the greatest impact and achieve operational excellence, differentiation, growth and profitability, companies must operate in a sustainable, scalable way.
It was clear from these conversations—and the fact that they were front and center on a Forbes stage—that these topics matter to investors. And we know many other audiences, from employees to suppliers, also have them top of mind, each with a different stake in the game. There is so much for companies to consider when shaping genuine, embedded sustainability strategies and sharing their impact. The Syneos Health® Social Impact practice is here to help. Reach out to [email protected] to learn more.
