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Sustainable business transformation

30th July 2021


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Globally, there has been an intensified focus on environmental, social and governance (ESG) issues, with public and private sectors facing increasing pressure to demonstrate climate and social stewardship by transparently disclosing ESG targets and strategies. This focus on ESG will continue to accelerate with climate change, workplace diversity, employee welfare, responsible supply chains and resilience remaining forefront topics. This is largely being driven by changes in customer, employee, community and government expectations as well as changes to the regulatory environment and the impact of innovation and digitisation. 

Another critical shift in motivating change in business behaviour is the redirection of financial flows as investors, lenders and insurers increasingly realise that sustainability risks translate into financial risk. The investment community is actively challenging industry to rethink their portfolios, thereby playing a central role in accelerating capital flows toward sustainable funds. 

According to a recent report released by World Economic Forum, the “trust deficit” is seen as the most important risk facing the mining industry. Addressing this challenge is causing leaders to redefine their strategic objectives, reconnect and recommit to their stakeholders, and reset their priorities.  Deloitte’s annual Tracking the Trends report, released earlier this year, explores what mining companies are required to do in order to rebuild trust. In addition to rebuilding trust with investors and employees, companies need to rebuild trust with the communities where they are located by improving their environmental, social and governance commitments. 

Three of this year’s trends focus on ESG:

Getting serious about decarbonisation Companies face mounting pressure to move beyond environmental risk identification and mitigation and instead execute on fully developed decarbonisation agendas. Many companies are making net-zero commitments in line with the 2015 Paris Agreement and are shifting to execution. With stakeholders suspicious of greenwashing, it is important that these climate pledges culminate in action plans to meet commitments without compromising shareholder value. 

Deloitte has developed a Decarbonisation Solutions package to support organisations on their decarbonisation journeys. The solution includes modules relating to abatement portfolio management, decarbonisation scenarios, pathways and abatement impact analysis. The modules leverage global scientific information and compare the forecast emissions reductions from selected abatement projects with short, medium- and longer-term aspirations and pathways.

Linking social investments to sustainable outcomes

Companies in the energy, resources and industrial sectors are working to overcome the social trust deficit by linking social investments to sustainable outcomes. Many companies are often called upon to play a greater role in remote regions, offering an opportunity to build trust and create value beyond regulatory compliance, collaborating more effectively with host governments and linking activities and long-term investments to sustainable outcomes. By doing so, these companies not only build trust, but strengthen their brand image and enhance their ability to attract both capital and talent.

In order to move from a Corporate Social Responsibility mindset and deliver value beyond compliance, organisations need to clearly articulate the long term and sustainable impact that they are committed to making, and then focus on measuring the actual social return on investment.

Corporate governance adding to competitive advantage 

Companies have often relegated governance to a backstage role, opening the door to potential missteps followed by reputation damage and loss of market value. More so than ever before, companies are strengthening governance processes and enhancing transparency in areas of human rights, ethical conduct, cyber security and social impacts. The role of the Social and Ethics Committee is becoming even more critical in challenging an organisation’s trajectory and overseeing the consistent achievement of targets and timelines.  

Guiding organisations to a more sustainable future

The world is changing rapidly, and every organisation has a role to play in this transformation. The transition to a sustainable and low-carbon future won’t be easy. It will require a paradigm shift in how we all conduct business, operate and invest. Organisations that can innovate and navigate from a carbon-intensive global economy will find new opportunities to grow and create value. 

Deloitte provides support and advice around the purposeful integration of sustainability into business strategy, whilst demonstrating how a transparent commitment to ESG can generate value beyond compliance. Deloitte has been turning challenges on climate change, circular economy and sustainable finance into competitive advantages for organisations for more than 20 years. Our multi-disciplinary team works closely with organisations to navigate the complexities of sustainability at every level, from envisioning a starting point to transforming business models. We define and build climate strategies, measure organisations’ environmental and social impacts and assist them to reduce energy intensity and decarbonise their operations, along with managing carbon tax liabilities. 
We also help plan for anticipated policy changes, manage regulatory reviews and enhance ethical supply chain traceability. Deloitte’s integrated sustainability offerings can identify the responsible practices and innovative digital solutions to help your organisation transform, grow and thrive.

Edited by Creamer Media Reporter



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