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The fundamental question for your CEO: What is your transition plan to reach net zero?

It was no surprise that clarity of Mark Carney’s views and questions really impressed in his “Special Guest Remarks from Mark Carney, UN Special Envoy, Climate Action and Finance” (covered by Chatham House rules) or that he lives in a beautiful place in Canada, see below.

But it was a surprise that these remarks and the questions he raised dovetailed with and agreed with those expressed in the “What is the future of ESG and sustainability?” session which was that the COVID-19 pandemic is a short term horrendous problem to overcome, while climate change and our ESG behaviour are fundamental to mankind’s very survival.

What is the future of ESG and sustainability?

This session, ably chaired by Adrian Sargnet founder of ESG Treasury, brought together Jessica Fries, Executive Chairman Accounting for Sustainability (A4S), Aviva’s Head of ESG Research - Paul LaCoursiere, and Third Way’s Senior Resident Fellow, Climate and Energy Program - Ellen Hughes-Cromwick who discussed a range of topics in which the main points were:

  • ESG (Environmental, Social and Governance) is important right now because:
    • Aviva study found that ESG compliant project now produce higher returns than non-compliant projects
    • Tesla, an ESG compliant/carbon neutral company, now has a market cap higher than Daimler-Benz
    • Corporate treasurers need to think through how to respond to the new savings and opportunities
  • How to rebuild after CVD-19 pandemic:
    • Follow A4S’s Top Tips Framework
    • Increase focus on Social Bonds
    • Need to act collectively
  • Accurate labelling of ESG projects:
    • Is a problem and more standards are needed
    • Pension funds have a problem in identifying which is which
    • Description standards for investors are emerging
  • Overall comments on ESG:
    • One thing is for sure “Decarbonization adds value”
    • ESG is becoming a central topic for investors, but beware of “greenwashing”
    • Ignore ESG at your peril
    • In recovering from CVD-19 pandemic “We are not going back to where we were”, we need to change the way we operate
    • Top tips:
      • 1. Don’t ignore
      • 2. Get started
      • 3. Make a positive impact.

The questions and the need to start ASAP

These two sessions came up with two vital questions that corporate treasurers should ask themselves and their bosses about future business focus and direction for the ‘new normal’:

  1. Ask your CEO, “What is your transition plan to reach net-zero carbon emissions by 2050?
  2. Ask yourself on ESG, “How can I get started now and start to have an impact right now?”

Both sessions also concluded with comments (in various ways) that it was urgent to get started right now because the longer/later that governments and businesses left it, the higher the costs and dangers, and the lower the returns.

CTMfile take: These two sessions taken together were the most important in the conference/virtual event: they questioned the future of mankind, the way we do business and our values. They were both inspiring and depressing at the same time…....

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