Episode 5: Beyond Box Checking: How to Embed Sustainability in Your Company
Release Date: 04/16/2024
Sustainability In Motion
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Episode Overview: In this episode, Matt Orsagh and Nawar Alsaadi of ED4S sit down with Jon Lukomnik, a leading figure in sustainable finance and co-author of Moving Beyond Modern Portfolio Theory. Jon explores the limitations of Modern Portfolio Theory (MPT) in addressing long-term, systemic risks like climate change, highlighting the evolution toward "system-level investing." Key Takeaways: Limitations of MPT: MPT is designed for idiosyncratic risk (individual asset variance) but fails to account for systemic risks, which cannot be diversified away. Lukomnik notes that while MPT...
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Hosts: Matt Orsagh, Chief Content Officer at ED4S Nawar Alsaadi, CEO of Kanata Advisors, Chief Advisor at ED4S Guest: Natasha Chaudhary, Research Fellow at The Institute for Climate Economics (I4CE) Episode Focus: The concept of stranded assets and a shift toward "assets at risk" to better support financial institutions in navigating climate-related financial risks. Key Takeaways: Stranded Assets Explained: Traditionally associated with fossil fuels, stranded assets refer to devalued resources due to regulatory, market, or physical climate changes. Current definitions often focus on...
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Hosts: Matt Orsagh, Chief Content Officer at ED4S Maria Maisuradze, Founder and CEO of ED4S Nawar Alsaadi, CEO of Kanata Advisors, Senior Advisor to ED4S Episode Focus: A discussion on ED4S’s new paper, “Operationalizing Sustainability: Eight Key Roles in Finance,” which offers practical guidance for embedding sustainability in financial roles. Key Takeaways: Purpose of the Paper: This paper addresses how financial professionals can operationalize sustainability in their day-to-day roles. As organizations mature in ESG, there is a need to integrate sustainability practices within...
info_outlineSustainability in Motion Podcast – Episode 5: Embedding Sustainability with IBM’s “Beyond Checking the Box” Report
Hosts:
- Matt Orsagh, Chief Content Officer at ED4S
- Maria Maisuradze, CEO at ED4S
- Nawar Alsaadi, CEO and Founder of Kanata Advisors, Chief Adviser at ED4S
Episode Overview:
In this episode, the ED4S team dives into IBM’s “Beyond Checking the Box” report, which explores how companies that embed sustainability into their core business operations and culture see greater profitability and growth. They discuss the importance of operationalizing sustainability and the critical role of corporate culture, training, and data management in achieving sustainability goals.
Key Takeaways:
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Embedding Sustainability Yields Financial Benefits
- The IBM report reveals that companies integrating sustainability across all operations achieve 52% higher profitability and 16% higher revenue growth than peers. It’s clear that sustainability, when treated as a core business strategy, drives real value and competitive advantage.
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The Gap Between Strategy and Implementation
- While 76% of executives acknowledge sustainability’s importance, only 31% have embedded it into their data and operations. This gap highlights the need for sustainability training, goal alignment, and actionable objectives across departments, not just at the executive level.
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Data Management and Integration
- Effective sustainability requires robust data infrastructure. The report notes that only 4 in 10 companies have systems in place to gather sustainability data across enterprise systems, underscoring the need for better data tools and cross-functional alignment to make informed sustainability decisions.
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The Role of Training in Driving Cultural Change
- Upskilling employees at all levels helps build a sustainability-focused culture. Training enables teams—whether in marketing, finance, or HR—to understand their role in sustainability and align with the company’s broader goals, fostering a holistic approach to sustainability across departments.
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Sustainability as Good Business, Not a Compliance Exercise
- Companies that view sustainability as a compliance task miss out on real value. By fostering a sustainability-focused culture and embedding ESG considerations into daily practices, organizations can achieve long-term resilience, improved innovation, and operational efficiency.
Conclusion:
As IBM’s report illustrates, companies that fully embrace sustainability are more resilient, innovative, and profitable. The journey to embedding sustainability is challenging, but essential for long-term success. For businesses and investors alike, a sustainable strategy is becoming synonymous with good business strategy.
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