Louise Macdonald, Director, IoD Scotland, calls for boards to take sustainability very seriously at Edinburgh Napier University ‘Beyond COP26’ virtual summit.
Reflecting on her previous role leading Young Scot, Louise highlighted there wasn’t a day when she wasn’t reminded by young people of the need for adults to take the climate crisis more seriously - along with a sense of bewilderment as to why we weren’t.
Yet, reflecting on an IoD survey earlier this year, completed by nearly 700 Directors, it was clear that whilst everyone thinks sustainability is important, few have a complete understanding of how to get there and most still feel costs are prohibitive.
On a positive note, Louise highlighted that the ESG approach, which looks beyond traditional financial metrics by including Environmental, Social and Governance factors in assessing an organisation’s performance, has become mainstream. It’s no longer a niche proposition. She called for ESG measures to be reported as frequently as financial measures.
Throughout the summit it was acknowledged that sustainability must be authentic. Louise commented; “Greenwashing does not work. Companies cannot continue doing what they do, but just a bit greener. Stakeholders, even large institutional investors, see through the myths and are increasingly taking action. Radical change is needed, not pretend or half-hearted sustainability.“
“Many businesses do innovate and contribute hugely to their communities and society, and many have sustainable practices, yet often these can be too ad hoc or not systemic – done ‘because it feels like the right thing to do’. But this moment calls for a different order of greater commitment - with the whole business refocused around sustainable outcomes.”
Challenging the audience she asked what our businesses will look like in a truly circular economy? Are we considering adaptation and resilience in the face of the climate changes which will hit Scotland, regardless of whether we remain within 1.5 degrees or not? And, should ecocide be added to risk registers, given that in the future directors could be held criminally responsible for projects that knowingly cause real environmental harm?
As you might expect from someone who is an advocate for young people, she stressed the value of intergenerational voices in decision making. This was illustrated at IOD Scotland’s own conference where involving young leaders (members of 2050 Climate Group) transformed the conversation.
“Urgency, rigorous accountability and creativity is all part of the magic governance mix. Our business, public and third sector worlds are so interconnected it is increasingly clear that great boards need to be made up of diverse directors with a global citizen mindset, acting as a force for good and taking responsibility to collaborate for a healthier, fairer planet. A strong, sustainable economy goes hand in hand with a fair and equal society.”
But is it good enough to be a good company or organisation operating in a bad system? As Louise pointed out, the world-wide problems of poverty, hunger, war, are systemic ones and we cannot continue to only focus on relieving the symptoms. We have to raise our gaze. In seeking economic structural system change, we need to think about a Wellbeing Economy which is in service of higher goals, delivering social justice on a healthy planet for all.
“Extreme inequality, the impact of post-colonial systems and the fragility of the climate in the global south all need to be part of our thinking and our action - global justice has to be at the root of true sustainability. Power, politics and models of governance have driven the design of our current systems – we have to acknowledge that.”
Encouragingly, momentum around these ideas is growing – Scotland’s National Performance Framework, Wales now having a Future Generations Commissioner, Governments such as New Zealand are basing their budgets on Wellbeing goals and targets. Change is coming, but many are fearful that, for many spheres of our ecosystem, we are out of time. Systems thinking is important, but doesn’t happen by default. It takes deliberate design and committed, ethical leadership from those in power and who have agency.
In summing up, Louise claimed “The time for warm words and commitments is done – it’s now about rapid acceleration to implementation with a boldness and a unity we haven’t seen before. IoD Scotland believes we are all Sustainability Directors now, each one of us responsible for shifting our mindset for our organisations – from being the ‘best in the world’ to being the ‘best FOR the world’.”
To watch the full recording of Louise's presentation please click here.
IoD Sustainability Taskforce
Trustee, Wellbeing Economy Alliance (Scotland)
Delegate at the Edinburgh Napier University ‘Beyond COP26’ virtual summit, October 2021