So today we're gonna talk about corporate sustainability and and why corporate sustainability matters.Um I'm very excited to talk about this topic with you because corporate sustainability is something that I'm very passionate as a finance individual, as somebody who uh spent her career in working in finance and transformation. I see efficiency and sustainability go very much hand in hand and, and that's what we're going to talk about sort of, you know today. So my name is Sylvia Gensch. I am the Chief executive officer uh of scripting A I. And as I mentioned, I spent my career in finance and digital transformation and I feel that sustainability and efficiency is that key ingredient um making organizations really drive the business value. What we're gonna talk about today? Why is corporate sustainability important?

How to prioritize and measure sustainability initiatives and how to optimize impact with relevant KPIS? So sustainability is quite complicated. And today, I'm gonna try to make an effort to keep it very simple, but you can even see on this illustration, it's, there is many different ingredients that go into sustainability. It's a sense of responsibility, it's not just environment mental things that very often we talk about um you know, cul cultural um as well where diversity has been sort of, you know, top of mind, but it's really about the society, it's about sort of the benefits, it's about collaboration and how we can leverage innovation to really drive sustainability forward.

So there is some key uh benefits to being sustainable. And one of the biggest sort of advantages of being uh a sustainable organization and having sustainable practices is the ability to find efficiencies and to um you know, look at sort of different new, innovative ways of doing things and that's whether it's creating efficient by looking at um effective energy consumption incentives or looking at how can I reduce my, my waste, how can I reduce uh maybe sort of, you know, recycle.

Those are just some, some common things but, you know, generally within the environment, it's um it's the energy, it's the water, it's uh it's the waste, but there is also other sort of, you know, benefits because sustainability creates brand awareness for other folks that you are working with and that brand recognition attracts sustainability oriented customers and this drives potential new revenues and it uh adds sort of, you know, different new uh opportunities sort of, you know, for you as an organization as well as some of the further benefits with having good sustainability practices, the risk of potentially having uh lawsuits or any penalties related to esg risks.

You are sort of minimizing those risks as you are sort of looking at uh ongoing basis, those good practices on, on regular basis and then as well, sort of why sustainability is good uh for business is the access to capital, whether you're raising money. Um and, and looking sort of for investors or have investors or if it's getting, um you know, getting loans and, and working with lenders, your sustainability practices and uh what, what that means that lenders and the, and the investors are more interested sort of in it now more than ever because of the mandatory requirements that they need to deal with and they need to comply.

So you having sort of good practices uh makes it easier and very often they do offer incentives for uh folks that do for organizations that have sort of good practices. According to Nelson report, 73% of global consumers were willing to pay more for sustainable products by integrating sustainability into their products and services. Companies can differentiate themselves from competitors and appeal to customers who value sustainability. And we all know uh even going to a grocery store or maybe sort of, you know, shopping for um for consumer products. Now there is more option and some of those options are becoming more affordable. So it's more about a choice and, and having those choices and if it is, you know, a few dollars more, maybe, yes, maybe no, depending sort of what your budget is. But the bigger percentages, uh and it is a growing trend are willing to pay for sustainable consumer goods. And if sustainability hasn't really been sort of top of mind for your organization, it's, it's the risk component. Can you really afford the li the risk? Um If you're doing nothing, if, if you're not sort of paying attention. So Walmart, we know it's a big brand. It's currently in the lawsuit for illegal dumping. More than 1 billion batteries are so cans of in secular and other hazardous waste into the California landfills.

And last November of 2022 Goldman Sachs, a global investment management firm agreed to pay 4 million to settle sex charges regarding their ESG investment practices. So this is real um if you know, maybe $4 million for some bigger organizations, they're willing to, to take the risk, but it is a good set of a practice and it is avoidable with good sustainability practices and it really all comes down to strategy. Um And before you can implement a robust sustainability strategy, the process of doing that, you need to look at your business strategy and work in an alignment and it really is um it's a digital transfer, same like any, any other uh initiatives and, and organizational goals that organizations are trying to move forward sustainability.

It's really has the same sort of basic principles. So where you start, you start sort of with defining the goals and the objectives and what that looks like. Um very often sort of for the first step in defining the most common goals within the sustainability is to reduce carbon emissions. And this would include sort of setting targets uh to reduce greenhouse gasses from whether it's from operations or from your supply chain, transitioning to renewable energy sources and investing in carbon offsetting programs. Another important relevant uh goal that could be uh a potential objective sort of for, for your organization if you are in construction, utilities, real estate or manufacturing its energy efficiency. And this involves implementing energy uh related efficient technologies, reducing energy waste and optimizing your production processes.

And a third example of specifically climate focus goal would be uh more relevant relevant to food and beverage industry. And this is waste reduction and this is where you're setting goals and targets to reduce waste generated by your operations or by your extended supply chain um promote recycling programs and implement circular economy initiatives uh within the business that you're in if you're more on the social side.

And you know, how, how is this sort of relevant to me, this is building goals relating to improving your diversity and inclusion. Um And as well sort of, you know, setting targets, it's to increase the diversity within the workforce, implementing inclusive hiring practices. Um You know, having a handbook that spells out what is your mission and, and what are you trying to accomplish within sort of those hiring processes and offering training and development programs that align sort of with your goals um as well within sort of the social is building up initiatives that support education and skill building by investing in education programs and offering internships and looking into partnerships with academia and educational institutions to support the skill building within the community.

And the final um goal that might fit within uh the, the social uh goals of your organization is promoting health and wellness. And this would be providing access to healthy food options um offering wellness program, maybe a gym membership and promoting physical activity within the community through events and initiatives. And once you have identified your goals and objectives, the next uh step in building your sustainability strategy is identifying your stakeholders and those stakeholders are your customers, they are your investors, your v uh your vendors, your regulators. And really, it's important to understand what the needs of the state holders are. So when you are building a strategy and Kpis and, and identifying goals that they will uh get what they need and their expectations will be met and you are able to communicate that very clearly to them. So when you are thinking of stakeholders like investment, um your investors or your regulators is ESG or sustainability, is it a mandate?

Um You know, if you are financial services, there will be specific, specific disclosures that be required or if you were in mining or utilities or energy if it isn't mandatory and, and you don't still looking at um common frameworks and, and looking at competitors, what are they doing?

How are they are man measuring and how are they communicating sort of to, to those investors? So it's not about reinventing the wheel, but, but you understand sort of what are those motivations and what are the needs of your stakeholders? And the next step is to determine the impact areas and, and what this means when you are looking at your sustainability, OK. You have, you know, you've identified the goals, you have the stakeholders and maybe your goal is to reduce greenhouse emissions. Um But when you're kind of digging in a little bit further, right? It's looking at your organization specifically and where can you have the most impact really the most impact on review greenhouse emissions and meeting a climate change. So that could be energy consumption and um reducing your carbon footprint by improving energy efficiency and maybe sort of reducing your energy waste, switching to led lights, installing energy efficient HVAC uh system or generating renewable energy on site through solar panels or wind turbines.

I if you can um again, the organization is different. So it's, it's really looking at what makes sense to you and maybe what makes sense to you, you know, no, I can sort of, you know, have those uh big type of projects, but maybe looking at a supply chain, right? And within the supply chain. If your supply chain is that major component of emissions, then that would be a priority and that's where you can make most impact um that can be quantified into rewards. The next step in your sustainability journey is once you have your goals, you understand your stakeholders, you have identified that biggest area of impact is selecting the right KPIS. Um And what this means is, is, you know, measuring progress towards your objectives. And when you are looking at selecting the appropriate Kpis, it's are those KPIS aligned with my goals? Are they relevant to my stakeholders? And how can I measure them and we'll go through um you know, building smart KPIS in, in a sec. The next step is setting targets and benchmarks and this is establishing realistic targets and benchmark um with using your KP I. So you can measure progress and, and divide areas of improvements and, and again, this is not reinventing the wheel. Look at what your competition is doing.

What are the industry benchmarks? What are the frameworks that would in your industry are being adopted? Is it un Sustainable Development goals? If is it disclosure, is it SAS B? Is it, you know, um something else so be very mindful that those targets and the benchmarks looking to uh what are those acceptable and best practices within your industry? And the last it's monitor and measure progress. And this is an important component because this whole strategy is built.

So you can measure, you can monitor and you can improve and you can participate in the savings that sustainability can deliver. Um But it's crucial thinking sort of, you know, back and planning ahead the the whole component of being able to measure and monitor every single time time.

And again, when, when we're chatting with our clients, it's really about the data collection. So i it's not a point in here because this is more about sustainability strategy. But the data collection and having a data transformation plan and and data for ehg sustainability is a crucial part that can enable uh the monitoring and measuring. Because sometimes what we've heard very often, these organizations big and small, some very mature, they wanna measure uh the things that they care about. However they data taxonomy, their processes, their systems have not been set up and then they need to go backwards to set that up.

So if you're in the early stages, this is a good time. Data should be a consideration. How are you going to collect the data for the things that you need to monitor and measure? Um So once you have identified some initiatives and uh you're on your way to OK. You know, I have a pretty good idea of what I'm gonna be doing on my sustainability journey. You know, maybe I wanna reduce by uh you know, greenhouse emission by 20%. But you're still, you know, like OK, Well, you, you really need to start with uh being able to prioritize and measure these initiatives and, and what this means, you need a baseline, right? Every single initiative it starts with a baseline. And the best way to the best approach is starting with the ESG Materiality Assessment because the assessment is going to look into your um environmental issues. It's going to look at your social issues and your governance and it will identify those gaps. And once you have identified the gaps, then you can, you know, decide, you know, does this make sense? Is this where I want to participate? How does this fit within the, within my business strategy? So it gives you, it's a, it's a fantastic tool um for, for organizations to just have a look and not even looking from the sustainability ESG component, but as a sustainable organization that is efficient, that is set up for the future, it is a good practice to go through this type of assessment.

And another important um fact, when you are selecting the things that you want to measure and the initiatives um that your organization might wanna partake. It's, you need to calculate the Roy, you need to consider how much is this going to cost for me? You know, I know I have these greenhouse emissions, I really want to tackle this problem and I might have an idea for initiative. So it's really looking at what is their ir I and, and before you sign up, you know, prioritizing based on again, going back to what is the biggest impact and you know, what is the ro I and the final it, if you don't measure um you know, chances are you're not gonna get there.

So set smart goals and measure your progress. So I wanna share with you um so calculating return on investment sometimes it's, it's tricky, it's, you know, how do you do that? So in here, in this example is I'm going to calculate cost savings of a carbon emission reduction program. So just imagine a a company has calculated its carbon footprint and there is variety of carbon calculators. So you can probably find some number of free tools online. So this company has calculated it has a carbon emission footprint and it emits 10,000 metric tons of CO2 per year. The company wants to improve a uh sorry, implement a carbon reduction program to reduce the emission by 20% over the next two years. So couple of things. So first, what are my current expenses? Let's assume a carbon price of $20 per metric tons of CO2. Um and you can get this information it's readily available um as well online. What what sort of the carbon price would be specifically for uh for your business and this time and day? So this this is historical information. Uh The company's annual cost is and sorry, the company's annual cost of carbon emission. The way it's calculated you take the 10,000 metric tons by the $20 per metric tons. So the cost, their annual cost is too 200,000. And now to implement a initiative that um is going to help to reduce this by 20%.

We came up with uh a calculation, there is going to be cost of capital expenditures. There is some operational expenses and there is a maintenance cost and the com of the cost of this program is going to be 10,000. So once we take the overall cost and the savings the the the savings that you get from the annual as a net, it's 30,000 per year. So this is just sort of a simple calculation, but you wanna make sure that when you are looking at your cost of the program, that it does make sense that the Roy is there before you sign up sort of, you know, for um for the next initiative and, and the next one is integrating smart KP I.

So again, you know, you, you decided, yes, you know, I know which initiatives are going to be uh making my organization more sustainable. Now, you need to measure them and the best way to measure is using smart KP I. So be specific, what do you want to achieve? Um those KPIS need to be measurable. How will you know when you have accomplished this goal achievable? Is this something that can really be accomplished or maybe this is too big. So really thinking through the the mechanism of how this is going to be possible. And then is this relevant? Right? Does this seem worthwhile? And the last it's very important time bound, when can you accomplish this goal? So here is an example of a smart sustainability goal um reduce a company's carbon footprint by 20% over the next two years by implementing a sustainability plan that includes energy efficiency measures, switching to renewables and other initiatives. It is specific, it is measurable the 20%.

Uh I'm going to make an assumption for this organization. It is achievable. It is relevant because that aligns with their strategy and the two years makes it time bound and now I will pause for some questions. So um one of the, I guess attendees, it's, do you have any suggestions for KPIS for collaboration? Um So that, that's a, that's a very good question. So collaboration is where, where I would sort of, you know, it's being able to measure cross rep um cross department initiatives, sustainable collaboration. Um Absolutely. So that's, that's a, that's sort of, you know, that's an interesting um that's an interesting metric. So I would, you know, I'm, I'm going to just think of it on a fly to me sort of sustainable collaboration would be really, you know, what is the workplace today? Right? We're, we're working in a digital workplace. Um Very often it's being able to collaborate remotely um that's, that's sort of sustainable and you want to be efficient, it's almost that sort of, you know, extension of the social where you're creating a sense of community within your organization. And you know, if wellness and if a sense community and collaboration is a priority for the organization as part of the s um within sort of the ESG, then it's coming up with the initiatives and specific metrics to measure that.

So is it, you know, how many, let's say you have weekly uh touch bases with the team and it's more on a, on a social, it's more like a wellness and um ability for people to, to kind of just more get together as a uh as a as a community within the workplace versus this is a meeting.

So, you know, how many people are attending, right? As that social collaboration, how many people are participating? Maybe it's, you know, coming up with uh a program where it's incentivized and they might have suggestions, you know, specifically related to collaboration. But I believe it's measuring the outputs and it's thinking about what is, what is the output of the collaboration? Is it idea generation? So can you can you measure sort of, you know those specific outputs of those collaboration activities? Is it, you know, if it is um if it is attending specific virtual events, you know, how many people have attended, right? How many people sort of participated is that hopefully I'm answering your question on, on the sustainable collaboration and going in the right direction. And I think I just sort of allowed you to speak if there is. Yeah, if there is a easier way to communicate. Well, thank you very much. I am going to share my screen one more time. So if you are interested um in learning a little bit more about sort of, you know, what we do, uh Please feel free to connect with me on linkedin. Here is my, here is my linkedin page as well. If you are interested in um doing an ESG sustainability materiality assessment to understand your organization's posture and you know what that means for environment, what that means for, for social and what that means for your organization's governance. I welcome you to do it.

It's a free tool that we've made available. It's a free assessment and it will give you sort of the baseline of your organization's postures and identify some of the gaps to guide you with what might be the right next steps. Um Thank you again. Thank you for joining me and uh