Deloitte Iceland’s, Gunnar S. Magnusson believes that the future of corporate environmental responsibility lies in optimizing the long game. He surmises, “Sustainability, climate, and biodiversity is like a marathon; you need the endurance to stay in this.”
When the problem of decarbonization and environmental impact seems to be one of eternal escalation, he advises: “ we need to run faster.”
Building on banking and financial management roles and collaborations with the International Monetary Fund in Washington make Deloitte's Head of Sustainability, the perfect leader to discuss the race ahead.
“Unfortunately, as things get worse with sustainability, things will just grow with Deloitte because there is so much to be done,” he says. The survival of corporations will rely on their readiness to reach net zero goals, which will no longer be optional but enforced by stakeholders, regulators, and government mandates.
He says in the long run, “companies will continue reaching out if they don’t know how to comply and their business strategies are obsolete. They need to rethink their models; they need to go circular, decarbonize and measure their environmental impact.”
Why should people care? The dividends of sustainability.
Magnusson believes that bringing a sea change to the corporate status quo will require a shift in perspective of short and long-term risks.
“I hear people on the conservative side say the company’s only loyalty should be to increase shareholder value,” and goes on to explain, “you have to bear in mind, to increase shareholder value, you need to take into consideration ESG risks.”
He explains that adopting the triple bottom line of people, profit, and the planet will pay off with long-term risk-taking increasing the investment value in the future. In addition, ESG reporting will shift from voluntary to mandated metrics required by the FCC, ISSB, and government regulatory boards.
Firms like Deloitte can audit and advise companies while still in a voluntary reporting stage, allowing them to build strategies and create boards dedicated to internal monitoring of climate and nature impact, readying themselves for future benchmarks.
The future lies in appointing expertise in leadership roles
With the key to making sustainability not just an afterthought but a driver of growth, teams will be crucial, and every team needs a coach. Magnusson believes that respect for the subject is crucial, and demonstrating that means appointing a dedicated Chief of Sustainability Officer to the executive board.
He says, “if you really want to have an impact, you need to have someone sitting at the highest desk, so to speak, with the right competencies to talk about sustainability, climate, and biodiversity.” And he believes this person should not just be installed at the behest of stakeholders but also supported by a bespoke board committee.
Executive leadership enables companies to dive deeper into their impact. He suggests that where most companies have a good grasp on direct impact metrics, few know about their impact in the broader value chain. These indirect emissions define Scope 3 ESG inventory reporting, which reveals potential strengths or vulnerabilities to investors.
It’s a purpose driven journey
Magnusson firmly believes that where a company focuses its intention, it’ll achieve crucial benchmarks. Conversely, signing up for initiatives with no action plan will lead to apathy in internal change. He goes on to press companies to create dialogue and engagement with governments to bridge the gap between promise and action.
For young people, Magnusson stresses that time is now to pursue a career change. “It’s a purpose-driven journey; you feel like you're doing some good in the world. It combines doing good business with having a real impact, ” says Magnusson referencing the need to bring a new generation into sustainability.
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