Stories Evolved Interview published in DAC Beachcroft Publication ‘People, Planet, Profit: How to Marry Purpose and Value in the Pursuit of Sustainabilty’
“The G is the glue that binds the E and the S together. It is the byword for strategy and process, the crucial mechanisms that must be harnessed to deliver what would otherwise stay as top-level statements of intent, rather that programmes of action and impact."
Stories Evolved was pleased to contribute to this publication by DAC Beachcroft on what real commitment to an integrated ESG strategy looks like. Below is an excerpt of our interview:
“It is not that we doubt the sincerity of the ambition, but the challenge of turning that ambition into tangible action is what defeats so many firms. A recent IBM survey of 3,000 CEOs of major businesses from over 40 countries found that although ESG was at the top of their agendas, turning their ambitions and commitments into measurable results was a consistent theme.”
Bartholomew acknowledges that facing all the issues that have now gathered under the ESG umbrella is daunting: “The project is such a profoundly big one that it requires a complete rewiring of business. It is about disruption and it is about transition, but this transition must be a just one.”
A failure to place justice and fairness alongside the business objectives will be dislocating for society: “Just look at what has happened in the United States. You get people who feel disenfranchised, which paves the way for populist leaders to emerge.
“I think that this challenge can lead to paralysis. If we do the transition badly, we will create a new set of problems.”
Bartholomew talks about taking a long-term view and working alongside the communities likely to be most severely impacted by unstoppable disruptive change, such as those dependent on the huge fossil fuel industries and those experiencing insurance protection gaps.
“It is essential to look at this through a long-term lens. Let’s start talking early about the opportunities to revitalise these communities with investment in a product that people really want – clean energy.
“No-one is pretending this is easy. It is a massive task. You win in one area but you may lose in another. The key is developing solutions to mitigate those losses.”
The insurance industry will be central to this process, says Bartholomew, and if it fails to accept that role its own future will be threatened.
“The insurance industry is deeply embedded in everything that goes on in the economy so it can be a powerful enabler and supporter of the just transition. If it isn’t then its future does not look good. The impacts of climate change mean that it is already paying out record sums globally. It is an unsustainable business model.”
There is no time to delay
There is no time to delay, she warns, as the expectations placed on the insurance sector will continue to mount up – and they will come from many directions.
She agrees that key ESG issues beyond climate change litigation coming to the fore in the months ahead include biodiversity, geopolitical risks and the digital revolution.
“The Task Force on Climate-related Financial Disclosures was the blueprint for the implementation of ESG-related disclosures. These took six years to become mandatory in the UK. The Taskforce on Nature-related Financial Disclosures will likely go from voluntary to mandatory in half that time”, placing major client sectors such as construction on the front line in the battle to save one million species from extinction: “Insurance underwriters’ response will be absolutely crucial”.
Across the entire ESG spectrum, gauntlets are being thrown down. Only an integrated response will deliver that crucial marriage between profit and sustainability - and with it, survival for the insurance industry.