Daniel Klier, CEO of ESG Book, Talks with WEC President & CEO Glenn Prickett About the New ESG Book Platform

Daniel Klier, ESG Book CEO, joined WEC President & CEO Glenn Prickett to talk ESG Book – a new open-source platform that promises to make sustainability data available and comparable for all stakeholders. Watch or read the transcript to hear what ESG Book is and how it creates an impact.  

Note: Daniel Klier’s title has been changed since the recording of this interview.

Prickett: Hello members and friends of World Environment Center; this is Glenn Prickett, WEC’s President and CEO, and I am very pleased to be here today with Daniel Klier, the Chief Executive Officer of Arabesque S-Ray. Arabesque is one of WEC’s member companies—very interesting company with an exciting new product they have launched that’s very relevant to some of the challenges that our members and other companies are facing in sustainability. So Daniel, thank you for taking some time to tell us about ESG Book, the new product that you’re launching now; and before we dive into that, maybe tell us a little bit about the company, about Arabesque, the role you play in the sustainability arena, and also tell us  a bit about yourself, your career before this and how you came to be CEO at Arabesque S-Ray.

Klier: Glenn, thank you for having me on this program today. So, Arabesque S-Ray is a company that is trying to fix one very fundamental problem. We know capital markets need good ESG data to allocate capital efficiently to more sustainable outcomes, but we also know that what we have at the moment is not good enough. We don’t have enough transparency; we don’t have enough data, and many investors don’t have the tools to really assess how sustainable a company is—how much of it is true versus story, how much is good on the top level, but when you look into the details, you may find a different story. And that’s really what our Arabesque S-Ray does; we provide ESG data and tools to investors to make the right capital allocation choices. We use people and technology to get that through our data, and I think that’s what, also for, probably for this group or the members, is interesting. We’re doing it in an incredibly transparent way, because we believe sustainability would only be successful if we all sort of trust the data and the underlying metrics.

I came to this because I spent the last ten years at one of the largest banks in the world, at HSBC I’ve built HSBC sustainable finance offerings—I wrote my own job profile many, many years ago when this was a very, very young topic. Now it’s everywhere, and frankly, I found myself on too many panel discussions, complaining about the lack of data. You would always say, “We could do so much more if we had better data.” And it was just very, very clear to me, there is space to improve; there is space to make a contribution. And so I joined Arabesque, as the CEO, middle of last year to help the company grow. We are a three and a half year old company, have a hundred and fifty people around the world, dedicated to, to do this topic.

Prickett: Great, thanks Daniel. And Arabesque last year, and WEC together put on a roundtable on the rise of ESG investing, what it means for companies, and it’s certainly, then, one of the big stories of business, in general, and finance, in general, of the last several years. And as you just described, ESG Book may solve or help to solve two big problems we identified in that round table. One, the companies themselves are overwhelmed with a lot of competing requests for information, from investors and analysts. And number two, that a lot of the analysis that comes out of that is maybe not so useful to investors, because it’s not very transparent, the underlying methods aren’t very clear, and in many cases there are still data gaps. So I think, from what I understand, ESG Book is trying to deal with both of those problems. So, let’s make it a little more practical. Let’s first think from the perspective of the companies; so I’m a sustainability executive at a company that is trying to provide data on my company’s performance to the markets. How will ESG Book help me in that role?

Klier: Yeah, so I think that both observations are absolutely right. We have quite opaque ESG metrics that tell you, frankly, not enough. And second, if you’re the chief sustainability officer, and increasingly, the CFO, Head of Investor Relations of a company, you get bombarded with forty, fifty different Excel questionnaires. You also get bombarded with a new acronym everyday, right, because the moment, the solution to a problem is to create a new coalition to create the new standard. The good news in all of this is, everybody is asking you for the same information, maybe slightly different terminology, maybe slightly different way of presenting, but we’re all interested in the carbon footprint. We’re all interested in the measures companies are taking to achievement zero. We’re all interested in how diverse management teams are and how diverse boards are. We’re all interested in how companies deal with human rights issues—whether the chairman is an independent chairman or not because it’s a good sign of good governance.

And so what we do, we collect a fairly large number of ESG raw data points, and we also enable companies to disclose relevant ESG, we call it raw data, so the real underlying drivers of environmental, social, and governance performance. And then we allow companies to express it in different standards. There’s obviously SASB, there’s GRI, and then the WEF metrics, and the, the UN Global Compact assessments, but all they are asking you is a slightly different type of the same questions. And so the way to think about ESG Book for a company is: it replaces forty different Excel questionnaires; it puts in place a central data architecture for ESG information, where you host essentially your ESG data; and then it allows you to present your data in all the different frameworks. We’ve integrated something called the reporting exchange; it was developed by the World Business Council for Sustainable Development, and essentially, it’s a unique piece of IP because it has mapped all the different KPIs. So, when you’ve filled SASB, you’ve answered ninety percent of the WEF metrics, and if you’ve filled GRI, you have most of what you need for TCFD. It’s just not presented in that way, and that’s what ESG Book allows you to do.

The other thing that ESG Book then allows you to do is you can share it. You can share it with the stakeholders that need it, those are sometimes investors, that are increasingly banks that are often now your customers because if you are in a supply chain, you’ll become part of a bigger net zero commitment of somebody that you work with. And so, instead of answering forty different Excel questionnaires, it’s like, let’s call it the LinkedIn profile of a company, and you can share it with the relevant stakeholders that you deal with.

Prickett: Terrific, and now let’s go to the other side of the table. I’m an investor. How will ESG Book help me as an investor?

Klier: Yeah, so investors at the moment have been through a journey of, let’s call it ESG integration, ESG commitments. And in the first instance, it’s very often meant using a single ESG metric, an ESG score, and ESG rating to integrate it into your investment process. And while there was a really nice logic following sort of the idea of a credit rating, it has quite a few downfalls. The biggest downfall is that a credit rating essentially has a single purpose. A credit rating wants to tell you how likely is it that you will ever get your money back. An ESG rating doesn’t have that single purpose because people use ESG date for very different use cases.

Some people want to use ESG information to identify the next up-performer, the next company that’s just really good in managing non-financial metrics, and that’s actually, that actually is a good manager. Other people want to use ESG data to identify risks. Where’s the next corruption problem? Where’s the next human rights scandal? Where’s the next environmental damage that I would want to avoid? Other people will want to use ESG data to deliver outcomes—net zero is an example, right? “How do I construct a portfolio that aligns with the Glasgow commitments, with COP26, the Paris goals?” And very other people want to use ESG information to measure impact. “What’s the carbon reduction I’ve achieved?” “How many jobs have I created?” And so you see the four very, very different use cases that want to use the same data but in very different ways, and trying to put that all into a single score that you can’t untangle is really not very useful.

And so, what ESG Book allows you to do, is you get to see your score, but you can double-click and double-click and you get to your actual raw data items. So, you go from ESG to environmental social governance, you go to what we call twenty-six drivers of ESG performance, and then you get to four hundred and fifty ESG raw data points. And that’s, I think, what most investors really appreciate. You’re not stuck with something that is hard to explain, hard to understand, and you always get into discussions: “Is this now greenwashing?” or “Is it real?” You actually see the carbon emissions, the number of women on the board, the human rights profile of your portfolio, and you can double-click in the underlying drivers. And that’s the beauty of ESG Book, and modern technology makes it possible. Because you can put it on the cloud; you make it available for everyone. It’s a resource that is free and everybody can sign up to it.

Prickett: Great, so you’re opening up the black box that many have complained about in terms of ESG ratings. You know, Daniel, one thing that struck me when I saw the announcement of ESG Book was that you were partnering not only with private financial institutions but with some public agencies, like the World Bank’s International Finance Corporation. At WEC, our mission is to advance sustainable development through corporate business practices. So, we’re very mindful of the global development picture. Tell us why you partnered with public agencies, in what would seem to be of, kind of a strictly commercial undertaking. What’s going on there?

Klier: Yeah, brilliant. I have to give a lot of the credit of ESG Book to the World Bank and the IFC. They were really sort of the core, founding fathers of the platform. And, why? Because if you’re the World Bank or the IFC, your main exposure sits in emerging markets. You give money to companies in the emerging markets. And frankly, if you look at ESG information and even the awareness for these topics in emerging markets, it is quite limited. You also see a very significant correlation between ESG ratings and the state of development of a nation. And sometimes that is driven by companies in more developed markets just pay more attention to this, but frankly, often though, it’s just companies in more developed markets do better disclosure, provide more information. And so, if you’re the World Bank, your main worry actually is that with ESG integration, if we don’t do it well, capital moves away from emerging markets. Because capital over-indices companies that disclose really good stuff.

And so the idea of ESG Book was initially, “How do I create a platform when companies that currently don’t provide enough information, companies that don’t understand what all the acronyms mean—How do I encourage them, and help them to be part of the international financial system? And therefore, attract money probably in the geographies that need it most.” So that whole history that was the original spirit of ESG Book, we then meet as a much broader initiative with about twenty-five very large institutions, the United Nations, Swiss Re, HSBC, Bridgewater. They all came together to create this, but all the credit goes really to the World Bank.

Prickett: I love that. Democratizing ESG investing and making it more accessible to companies in emerging markets which is where a lot of the effort is going to be needed in the future. So, let’s talk a little about where this sits within Arabesque’s business. As I understand Arabesque’s business model, you both provide data, freely and publicly, but you also do your own proprietary analysis for paying customers. If I’m a user of ESG Book, how can I be confident that this isn’t skewed to benefit your own advisory business? And vice versa. If I’m a customer of your advisory business, why are you better than others in terms of having ESG Book at your disposal?

Klier: So, the reason why we’re pushing ESG Book as a free resource of ESG data, is because we have the very strong belief that at the moment everybody argues that there isn’t enough ESG data, very soon, we’ll be in a world where people have too much data. ESG data essentially is any non-financial data. It’s what’s in the news, in social media, in NGO datas, in satellite information, and what companies disclose themselves. And so the challenge that we see, is that most investors, but also companies that want to understand their supply chains actually face the problem, there’s way too much information. You can drown yourself in data, and you’ll still have no idea of what you’re looking at. And so our philosophy is, you make the data available for free, but commercialize the analytics that you put on top of data. So, in sort of our technology analogy mindset, we wanted to create a Spotify of ESG data. Why? The music is free, but if you want to create your own playlist, then we would like to have a contribution. But the idea is that the data should be free, because that’s the only way to create transparency, to create trust in this whole ESG topic, and we will help people that make the right investment choices.

Prickett: Very good, very good. So, Daniel, I have one more question for you, and that’s to, you know, put on your futurist glasses and tell us, this ESG investing movement came very quickly to the mainstream; it’s very dynamic. Where do you see it heading? And what does the world of ESG investing look like five years from now?

Klier: Yeah, for me there are two very important trends. The first one is we’re moving from what I would call ESG 1.0 to ESG 2.0. We spent the last five to ten years in building awareness for the importance of environmental, social and governance issues, but we put it in as sort of one umbrella of ESG, alright. So, a lot of people have launched products, have launched commitments, that essentially brand everything ESG. As we mentioned a little bit before, I think that next phase is a lot more nuanced because what investors really want is understand this: “Is my portfolio actually aligned with net zero? How is the diversity and inclusion policy across my portfolios? What’s my exposure to human rights? And so, I think we see a lot more themetatic fragmentation of the topic, which makes it a lot more relevant to actual investment choices because you can actually relate to each of these topics. I think that’s one big trend.

A second big trend, and that’s true for companies and financial markets is that regulation plays a much bigger role. The increase in regulatory intervention on this topic is very, very significant, both on the side of companies and what kind of information they need to provide. And in terms of financial markets, what is required to integrate ESG information into risk management, into investment choices, into the advisory processes. So, in Europe you now need to evidence that you actually ask your customers how sustainable their portfolio is supposed to be, rather than just ask them for their risk appetite. So, I think it clearly, this is becoming a license to operate. This is no longer a, just positive differentiator; it is also a minimum hurdle you need to jump over.

So, I think the next two to three years will be quite exciting, because it is moving from the few that believed in this early to a topic that everybody has to comply with. And it also moves into an area where I think investments become a lot more emotional, suddenly. Because you can actually put your own values and your own beliefs into a portfolio construction, something that we haven’t seen for a very long time. And I think that’s actually a quite exciting development for the next few years. Companies will need to answer, suddenly, very different questions, right. Because people go beyond traditional financial analysis, there’s an element of climate, and many other non-financial metrics. Your members notice, but this is becoming our global, a global license to operate.

Prickett: Fascinating. It’ll be interesting to see how it plays out in the role technology, and your technology in particular will play. So, Daniel, I’m gonna let you get back to your business at Arabesque S-Ray. Let me add for WEC members, you’ve been invited to a webinar coming up on March 23rd, so that you can dig in a little deeper into ESG Book with Daniel and his colleagues. Later in the year, Arabesque will sponsor a roundtable on ESG investing more generally, where it is today and where it is going. You’ll hear more on that soon. Thank you so much, Daniel, for your time today and for bringing us all ESG Book. We wish you very well.

Klier: Thank you very much.

Prickett: Okay, take care.

World Environment Center Elects 2022 Board Officers

The World Environment Center (WEC) Board of Directors has elected new Officers to lead the organization in 2022. The Board thanks its outgoing Chair, Scott Tew, VP Sustainability and Managing Director CEES, Trane Technologies, for his many years of dedicated service to WEC as Chair, Vice Chair, and Board Member.

WEC’s Officers for 2022 are:

  • Chair: Emilio Tenuta, Senior Vice President & Chief Sustainability Officer – Ecolab, Inc.
  • Vice-Chair: Eunice Heath, Corporate Director of Sustainability – Dow
  • Treasurer: Donna Venable, Executive Vice President, Human Resources and Deputy General Manager, Shared Services – Ricoh USA, Inc.
  • Secretary: Lauren Hopkins, Principal – Beveridge & Diamond PC

Emilio Tenuta served previously as Vice-Chair. Eunice Heath served previously as a Board Member. Donna Venable and Lauren Hopkins are returning for a second term in their respective roles.

They join current WEC Board Members: Kevin Butt, Director, Environmental Sustainability, Toyota North America; Cristina Gil White, Chief Sustainability Officer, Suzano; Zoe Haseman, Vice President, Global Sustainability, Jacobs; Kris Morico, Vice President, EHS & Sustainability, Baxter; Lars Murawski, Vice President, EHS & Sustainability, Boehringer Ingelheim; Glenn Prickett, President & CEO, WEC; Exequiel Rolan Michel, Sustainability & Community Relations Manager, Fresnillo plc.; Isabel Studer, Director, Allianza University of California-Mexico; Sheryl Telford, Chief Sustainability Officer, The Chemours Company; and Karen Westley, Vice President for Carbon, Environment & Downstream Safety, Environment & Asset Management, Shell.

“We are fortunate to have such accomplished global leaders in sustainability as the officers of the World Environment Center. I am thrilled with the experience, guidance, and oversight that they bring to our work,” said Glenn Prickett, WEC President & CEO.

About the World Environment Center
The World Environment Center advances sustainable development through corporate business practices. Headquartered in Washington, D.C. with offices in Europe and Latin America, WEC creates business solutions through executive roundtables on key sustainability challenges, builds capacity of small enterprises in emerging markets; and honors industry excellence through its annual Gold Medal Award. WEC is an independent, non-profit, non-governmental organization. For more information, please visit www.wec.org.

WEC President & CEO Glenn Prickett Interview with Peter Schnurrenberger, Chief SHE Officer at Roche

WEC President & CEO Glenn Prickett spoke with Peter Schnurrenberger, Chief SHE Officer at Roche, on the eve of his retirement to discuss his work at Roche and his vision for the future. In the interview, Peter shares insights on how sustainability became a priority for Roche, how businesses can create impact, and the value WEC has for members.

Note: Daniel Klier’s title has been changed since the recording of this interview.

Prickett: Hello members and friends of World Environment Center; this is Glenn Prickett, WEC’s President and CEO, and I am very pleased to be here today with Daniel Klier, the Chief Executive Officer of Arabesque S-Ray. Arabesque is one of WEC’s member companies—very interesting company with an exciting new product they have launched that’s very relevant to some of the challenges that our members and other companies are facing in sustainability. So Daniel, thank you for taking some time to tell us about ESG Book, the new product that you’re launching now; and before we dive into that, maybe tell us a little bit about the company, about Arabesque, the role you play in the sustainability arena, and also tell us  a bit about yourself, your career before this and how you came to be CEO at Arabesque S-Ray.

Klier: Glenn, thank you for having me on this program today. So, Arabesque S-Ray is a company that is trying to fix one very fundamental problem. We know capital markets need good ESG data to allocate capital efficiently to more sustainable outcomes, but we also know that what we have at the moment is not good enough. We don’t have enough transparency; we don’t have enough data, and many investors don’t have the tools to really assess how sustainable a company is—how much of it is true versus story, how much is good on the top level, but when you look into the details, you may find a different story. And that’s really what our Arabesque S-Ray does; we provide ESG data and tools to investors to make the right capital allocation choices. We use people and technology to get that through our data, and I think that’s what, also for, probably for this group or the members, is interesting. We’re doing it in an incredibly transparent way, because we believe sustainability would only be successful if we all sort of trust the data and the underlying metrics.

I came to this because I spent the last ten years at one of the largest banks in the world, at HSBC I’ve built HSBC sustainable finance offerings—I wrote my own job profile many, many years ago when this was a very, very young topic. Now it’s everywhere, and frankly, I found myself on too many panel discussions, complaining about the lack of data. You would always say, “We could do so much more if we had better data.” And it was just very, very clear to me, there is space to improve; there is space to make a contribution. And so I joined Arabesque, as the CEO, middle of last year to help the company grow. We are a three and a half year old company, have a hundred and fifty people around the world, dedicated to, to do this topic.

Prickett: Great, thanks Daniel. And Arabesque last year, and WEC together put on a roundtable on the rise of ESG investing, what it means for companies, and it’s certainly, then, one of the big stories of business, in general, and finance, in general, of the last several years. And as you just described, ESG Book may solve or help to solve two big problems we identified in that round table. One, the companies themselves are overwhelmed with a lot of competing requests for information, from investors and analysts. And number two, that a lot of the analysis that comes out of that is maybe not so useful to investors, because it’s not very transparent, the underlying methods aren’t very clear, and in many cases there are still data gaps. So I think, from what I understand, ESG Book is trying to deal with both of those problems. So, let’s make it a little more practical. Let’s first think from the perspective of the companies; so I’m a sustainability executive at a company that is trying to provide data on my company’s performance to the markets. How will ESG Book help me in that role?

Klier: Yeah, so I think that both observations are absolutely right. We have quite opaque ESG metrics that tell you, frankly, not enough. And second, if you’re the chief sustainability officer, and increasingly, the CFO, Head of Investor Relations of a company, you get bombarded with forty, fifty different Excel questionnaires. You also get bombarded with a new acronym everyday, right, because the moment, the solution to a problem is to create a new coalition to create the new standard. The good news in all of this is, everybody is asking you for the same information, maybe slightly different terminology, maybe slightly different way of presenting, but we’re all interested in the carbon footprint. We’re all interested in the measures companies are taking to achievement zero. We’re all interested in how diverse management teams are and how diverse boards are. We’re all interested in how companies deal with human rights issues—whether the chairman is an independent chairman or not because it’s a good sign of good governance.

And so what we do, we collect a fairly large number of ESG raw data points, and we also enable companies to disclose relevant ESG, we call it raw data, so the real underlying drivers of environmental, social, and governance performance. And then we allow companies to express it in different standards. There’s obviously SASB, there’s GRI, and then the WEF metrics, and the, the UN Global Compact assessments, but all they are asking you is a slightly different type of the same questions. And so the way to think about ESG Book for a company is: it replaces forty different Excel questionnaires; it puts in place a central data architecture for ESG information, where you host essentially your ESG data; and then it allows you to present your data in all the different frameworks. We’ve integrated something called the reporting exchange; it was developed by the World Business Council for Sustainable Development, and essentially, it’s a unique piece of IP because it has mapped all the different KPIs. So, when you’ve filled SASB, you’ve answered ninety percent of the WEF metrics, and if you’ve filled GRI, you have most of what you need for TCFD. It’s just not presented in that way, and that’s what ESG Book allows you to do.

The other thing that ESG Book then allows you to do is you can share it. You can share it with the stakeholders that need it, those are sometimes investors, that are increasingly banks that are often now your customers because if you are in a supply chain, you’ll become part of a bigger net zero commitment of somebody that you work with. And so, instead of answering forty different Excel questionnaires, it’s like, let’s call it the LinkedIn profile of a company, and you can share it with the relevant stakeholders that you deal with.

Prickett: Terrific, and now let’s go to the other side of the table. I’m an investor. How will ESG Book help me as an investor?

Klier: Yeah, so investors at the moment have been through a journey of, let’s call it ESG integration, ESG commitments. And in the first instance, it’s very often meant using a single ESG metric, an ESG score, and ESG rating to integrate it into your investment process. And while there was a really nice logic following sort of the idea of a credit rating, it has quite a few downfalls. The biggest downfall is that a credit rating essentially has a single purpose. A credit rating wants to tell you how likely is it that you will ever get your money back. An ESG rating doesn’t have that single purpose because people use ESG date for very different use cases.

Some people want to use ESG information to identify the next up-performer, the next company that’s just really good in managing non-financial metrics, and that’s actually, that actually is a good manager. Other people want to use ESG data to identify risks. Where’s the next corruption problem? Where’s the next human rights scandal? Where’s the next environmental damage that I would want to avoid? Other people will want to use ESG data to deliver outcomes—net zero is an example, right? “How do I construct a portfolio that aligns with the Glasgow commitments, with COP26, the Paris goals?” And very other people want to use ESG information to measure impact. “What’s the carbon reduction I’ve achieved?” “How many jobs have I created?” And so you see the four very, very different use cases that want to use the same data but in very different ways, and trying to put that all into a single score that you can’t untangle is really not very useful.

And so, what ESG Book allows you to do, is you get to see your score, but you can double-click and double-click and you get to your actual raw data items. So, you go from ESG to environmental social governance, you go to what we call twenty-six drivers of ESG performance, and then you get to four hundred and fifty ESG raw data points. And that’s, I think, what most investors really appreciate. You’re not stuck with something that is hard to explain, hard to understand, and you always get into discussions: “Is this now greenwashing?” or “Is it real?” You actually see the carbon emissions, the number of women on the board, the human rights profile of your portfolio, and you can double-click in the underlying drivers. And that’s the beauty of ESG Book, and modern technology makes it possible. Because you can put it on the cloud; you make it available for everyone. It’s a resource that is free and everybody can sign up to it.

Prickett: Great, so you’re opening up the black box that many have complained about in terms of ESG ratings. You know, Daniel, one thing that struck me when I saw the announcement of ESG Book was that you were partnering not only with private financial institutions but with some public agencies, like the World Bank’s International Finance Corporation. At WEC, our mission is to advance sustainable development through corporate business practices. So, we’re very mindful of the global development picture. Tell us why you partnered with public agencies, in what would seem to be of, kind of a strictly commercial undertaking. What’s going on there?

Klier: Yeah, brilliant. I have to give a lot of the credit of ESG Book to the World Bank and the IFC. They were really sort of the core, founding fathers of the platform. And, why? Because if you’re the World Bank or the IFC, your main exposure sits in emerging markets. You give money to companies in the emerging markets. And frankly, if you look at ESG information and even the awareness for these topics in emerging markets, it is quite limited. You also see a very significant correlation between ESG ratings and the state of development of a nation. And sometimes that is driven by companies in more developed markets just pay more attention to this, but frankly, often though, it’s just companies in more developed markets do better disclosure, provide more information. And so, if you’re the World Bank, your main worry actually is that with ESG integration, if we don’t do it well, capital moves away from emerging markets. Because capital over-indices companies that disclose really good stuff.

And so the idea of ESG Book was initially, “How do I create a platform when companies that currently don’t provide enough information, companies that don’t understand what all the acronyms mean—How do I encourage them, and help them to be part of the international financial system? And therefore, attract money probably in the geographies that need it most.” So that whole history that was the original spirit of ESG Book, we then meet as a much broader initiative with about twenty-five very large institutions, the United Nations, Swiss Re, HSBC, Bridgewater. They all came together to create this, but all the credit goes really to the World Bank.

Prickett: I love that. Democratizing ESG investing and making it more accessible to companies in emerging markets which is where a lot of the effort is going to be needed in the future. So, let’s talk a little about where this sits within Arabesque’s business. As I understand Arabesque’s business model, you both provide data, freely and publicly, but you also do your own proprietary analysis for paying customers. If I’m a user of ESG Book, how can I be confident that this isn’t skewed to benefit your own advisory business? And vice versa. If I’m a customer of your advisory business, why are you better than others in terms of having ESG Book at your disposal?

Klier: So, the reason why we’re pushing ESG Book as a free resource of ESG data, is because we have the very strong belief that at the moment everybody argues that there isn’t enough ESG data, very soon, we’ll be in a world where people have too much data. ESG data essentially is any non-financial data. It’s what’s in the news, in social media, in NGO datas, in satellite information, and what companies disclose themselves. And so the challenge that we see, is that most investors, but also companies that want to understand their supply chains actually face the problem, there’s way too much information. You can drown yourself in data, and you’ll still have no idea of what you’re looking at. And so our philosophy is, you make the data available for free, but commercialize the analytics that you put on top of data. So, in sort of our technology analogy mindset, we wanted to create a Spotify of ESG data. Why? The music is free, but if you want to create your own playlist, then we would like to have a contribution. But the idea is that the data should be free, because that’s the only way to create transparency, to create trust in this whole ESG topic, and we will help people that make the right investment choices.

Prickett: Very good, very good. So, Daniel, I have one more question for you, and that’s to, you know, put on your futurist glasses and tell us, this ESG investing movement came very quickly to the mainstream; it’s very dynamic. Where do you see it heading? And what does the world of ESG investing look like five years from now?

Klier: Yeah, for me there are two very important trends. The first one is we’re moving from what I would call ESG 1.0 to ESG 2.0. We spent the last five to ten years in building awareness for the importance of environmental, social and governance issues, but we put it in as sort of one umbrella of ESG, alright. So, a lot of people have launched products, have launched commitments, that essentially brand everything ESG. As we mentioned a little bit before, I think that next phase is a lot more nuanced because what investors really want is understand this: “Is my portfolio actually aligned with net zero? How is the diversity and inclusion policy across my portfolios? What’s my exposure to human rights? And so, I think we see a lot more themetatic fragmentation of the topic, which makes it a lot more relevant to actual investment choices because you can actually relate to each of these topics. I think that’s one big trend.

A second big trend, and that’s true for companies and financial markets is that regulation plays a much bigger role. The increase in regulatory intervention on this topic is very, very significant, both on the side of companies and what kind of information they need to provide. And in terms of financial markets, what is required to integrate ESG information into risk management, into investment choices, into the advisory processes. So, in Europe you now need to evidence that you actually ask your customers how sustainable their portfolio is supposed to be, rather than just ask them for their risk appetite. So, I think it clearly, this is becoming a license to operate. This is no longer a, just positive differentiator; it is also a minimum hurdle you need to jump over.

So, I think the next two to three years will be quite exciting, because it is moving from the few that believed in this early to a topic that everybody has to comply with. And it also moves into an area where I think investments become a lot more emotional, suddenly. Because you can actually put your own values and your own beliefs into a portfolio construction, something that we haven’t seen for a very long time. And I think that’s actually a quite exciting development for the next few years. Companies will need to answer, suddenly, very different questions, right. Because people go beyond traditional financial analysis, there’s an element of climate, and many other non-financial metrics. Your members notice, but this is becoming our global, a global license to operate.

Prickett: Fascinating. It’ll be interesting to see how it plays out in the role technology, and your technology in particular will play. So, Daniel, I’m gonna let you get back to your business at Arabesque S-Ray. Let me add for WEC members, you’ve been invited to a webinar coming up on March 23rd, so that you can dig in a little deeper into ESG Book with Daniel and his colleagues. Later in the year, Arabesque will sponsor a roundtable on ESG investing more generally, where it is today and where it is going. You’ll hear more on that soon. Thank you so much, Daniel, for your time today and for bringing us all ESG Book. We wish you very well.

Klier: Thank you very much.

Prickett: Okay, take care.

Call for Nominations for the WEC 2021 Gold Medal Award are now OPEN!

As the world moves to rebuild our economies and to tackle climate change and systemic injustices, corporate leadership on sustainable development is more important than ever.  The Gold Medal Award recognizes excellence and provides inspiration to other companies worldwide.

Nominations are now being accepted for the World Environment Center’s (WEC) 2021 Gold Medal for International Corporate Achievement in Sustainable Development. The Gold Medal Award is presented annually to a global company that demonstrates deep, organization-wide commitment to sustainability in its business practice and beyond. The winner of the 37th Gold Medal for International Achievement in Sustainable Development will be honored at WEC’s Gold Medal Presentation virtually on June 9, 2021.

Submissions of the 2021 WEC Gold Medal Award Nomination Form must be received by Tuesday, January 26, 2020. Self-nominations are welcome. WEC membership is not required as a criterion for submitting a nomination nor for receiving the award.

Now in its 37th year, the WEC Gold Medal Award is the most prestigious recognition of a global company’s contributions to sustainability, as embodied by the winning company’s global engagement and ongoing commitment to sustainable development. An independent jury of international experts in business and sustainability selects the Gold Medal awardee.

The Ford Motor Company was the recipient of the 2020 Gold Medal Award, recognized for their commitment to transforming its culture and innovating across the business, from the production line to the design studio; for their commitment to reduce the CO2 emissions from their facilities and their vehicles, in line with the climate targets outlined in the Paris Climate Accord; and for a global carbon reduction strategy focused on powering facilities with renewable energy.

Previous recent recipients of the WEC Gold Medal Award include: Ingersoll Rand (now Trane Technologies, 2019) Ecolab (2018), HP (2017), CH2M (now Jacobs, 2016), SC Johnson (2015), Unilever (2013), IBM (2012), Nestlé (2011), Walmart (2010), The Coca-Cola Company (2009), and Marks & Spencer (2008).

About the World Environment Center

WEC is an independent, global non-profit, non-advocacy organization that advances sustainable development through the business practices and operations of its member companies and in partnership with governments, multi-lateral organizations, non-governmental organizations, universities and other stakeholders. WEC’s mission is to promote business and societal value by advancing solutions to sustainable development-related problems. It manages projects for companies across their global operations, builds executive level learning and competency in incorporating sustainable development principles across a number of business sectors, and recognizes performance excellence through an annual awards program. WEC is headquartered in Washington, D.C., with regional offices in China, El Salvador and Germany.

Ford Motor Company Receives World Environment Center’s 2020 Gold Medal Award for Corporate Sustainability

The World Environment Center (WEC) honored the Ford Motor Company by awarding it the 36th annual Gold Medal for International Corporate Achievement in Sustainable Development. Due to the global pandemic, WEC held a virtual presentation on December 15, 2020. Bob Holycross, Ford’s Chief Sustainability, Environment and Safety Officer, joined the event  to accept the award.

WEC and all those in attendance were honored to have Congresswoman Debbie Dingell, representing Michigan’s 12th Congressional District, present the award through a pre-recorded message and Ford’s President and Chief Executive Officer, Jim Farley, accept on behalf of the company, celebrating its  outstanding work in sustainability through a recorded message.

Through a global competition, the independent Gold Medal Jury selected Ford’s application for their commitment to transforming its culture and innovating across the business, from the production line to the design studio; for its commitment to reduce its CO2 emissions from its facilities and vehicles, in line with the climate targets outlined in the Paris Climate Accord; and for a global carbon reduction strategy focused on powering facilities with renewable energy.

The Honorable Debbie Dingell said, “to my dear friend, Bill Ford, Jim Farley, and the entire Ford Motor Company and its employees, congratulations on this well-earned award and recognition.  When it comes to existential threats like climate change, we need companies like Ford who aren’t afraid to lead and do what’s right. We need corporations that see sustainability not just as a moral imperative but an economic opportunity to shape our future. I am so honored to present the Gold Medal Award, from the World Environment Center to Bill Ford, Jim Farley, and the Ford Motor Company today.” Link to the full message from Congressoman Dingell can be found here.

In acknowledging receipt of the prestigious global sustainability award, Ford’s CEO Jim Farley said, “When you look at Ford’s sustainability story over the last 20 years, we have come a long way under Bill Ford’s leadership. He has truly been a pioneer in our industry on this issue, pushing us to do more to reduce our impact on the planet. As the only U.S. automaker to stand with the Paris Climate Agreement, and with California to adopt more meaningful greenhouse gas emissions reductions, we are proud to lead the way in reducing our impact on the planet while still delivering great products for our customers. On behalf of the Ford team, thank you for honoring us with this year’s Gold Medal Award.” Link to the full message from CEO Jim Farley can be found here.

Ford’s Holycross said, “It’s a great honor to be here on behalf of the entire Ford Team. It’s such an important time in the company’s history. Earlier this year, we announced our ambition to become carbon neutral by 2050. It is important to have ambition, but it’s also important to advocate for the right policies and to have the courage to take stand when necessary. We know what’s good for the planet is good for our business. This award  is an acknowledgement of our progress and an encouragement for us to do more.”

Glenn Prickett, WEC President & CEO, said, “At a time of unprecedented global challenges we need determined leadership from the private sector.  It is especially gratifying to end this year with a celebration of the Ford Motor Company’s achievements and the example they provide to others in the private sector. WEC congratulates Ford on its Gold Medal Award and looks forward to its continuing leadership to strengthen business performance and create a better society.”

The World Environment Center’s Gold Medal for International Corporate Achievement in Sustainable Development was established in 1985 to recognize significant industry initiatives in global environmental excellence and sustainable development. Recent recipients of the WEC Gold Medal Award are: Ingersoll Rand (now Trane Technologies; 2019), Ecolab (2018), HP Inc. (2017), CH2M (2016), SC Johnson (2015), Unilever (2013), IBM (2012), Nestlé (2011), Wal-Mart Stores (2010), The Coca-Cola Company (2009), and Marks & Spencer (2008).

The Gold Medal Jury is independent of WEC and its programs, and is composed of international leaders from academia, government, non-governmental organizations, and retired industry professionals. 

About Ford Motor Company

Ford Motor Company (NYSE: F) is a global company based in Dearborn, Michigan. The company designs, manufactures, markets and services a full line of Ford cars, trucks, SUVs, electrified vehicles and Lincoln luxury vehicles, provides financial services through Ford Motor Credit Company and is pursuing leadership positions in electrification; mobility solutions, including self-driving services; and connected services.  Ford employs approximately 187,000 people worldwide. For more information regarding Ford, its products and Ford Motor Credit Company, please visit corporate.ford.com.

About the World Environment Center

The World Environment Center, headquartered in Washington, D.C., with offices and operations in emerging and developed markets, is unique in its direct application of sustainable development strategies and practices to the business operations of global companies. WEC creates sustainable business solutions through individual projects in emerging markets; convenes leadership roundtables to shape strategic thinking across a range of sustainability topics with a specific focus on the preparation of business leaders to implement sustainability; and honors industry excellence through its annual Gold Medal Award. An independent non-profit organization, WEC conducts no advocacy activities. For more information, please visit www.wec.org.

An In-Depth Interview with Georg Kell

Recently, Glenn Prickett, WEC’s President & CEO sat down to speak with the Chairman of one of its members, Arabesque Partners, Georg Kell. Georg has a new book that he has co-edited with others on the topic of sustainable investing. Glenn & Georg had an in-depth discussion about the book that provides a framework on ESG investing and about the need for leadership and collaboration for change to happen.  

Georg Kell is the Chair of the board of Arabesque, a tech company that uses AI and big data to assess sustainability performance for investment analysis and decision making. He is also the co-chair of the DWS ESG Advisory Board and Spokesperson of the VW Sustainability Council. He is the founding director of the UN Global Compact and oversaw the launch and build up of a number of global initiatives, including PRI and the PRME on responsible management Education. 

INTERVIEW TRANSCRIPT

Prickett: I’m thrilled to be speaking today with Georg Kell, Chairman of Arabesque, longtime friend and member of the World Environment Center. Georg has a new book that he has co-edited with others on the topic of sustainable investing. Georg, welcome and thank you for joining us.

Kell: Thank you, Glenn.

Prickett: Tell us about the book. What is it about, and why should we read it?

Kell: The book tries to take stock of where ESG investing is today and what the prospects for the future are. We discovered two, three years ago that existing textbooks on finance are kind of outdated, not taking into consideration the changes that have actually happened already in the cooperate world, in regards to sustainability, and the many changes (incremental changes) that corporations  have introduced over the past two decades or more. And at the same time, taking stock of the rapidly changing landscape in the world of finance, which has now started (probably in 2014, 2015) to take ESG Investing seriously. So the book really tells the story of a convergence between cooperate responsibility (and its drivers) and sustainable investing. We are convinced that this will open up new opportunities for market-led changes enabled by technology. It’s a big evolutionary step, so to speak, because in the past we looked at cooperate sustainability in isolation. We looked at impact investing, sustainable investing in isolation. We are bringing this together. We brought together leading voices, practitioners, executives from the cooperate world and from the world of finance, and of  young thought leaders to tell that story with the attempt to also look a little bit ahead of where does this lead us to.

I think we have three big insights that ring through most of the chapters. One is that the pace of change in the framework conditions within which markets operate is accelerating.  This is largely because of technology, but also because of planetary boundaries and the feedback loops we increasingly have to deal with as well as social changes, social movements, and governance changes. This insight should be helpful for executives and for students of finance.

The second big insight is that we have to look at finance in a systemic way now, from the technology angle, from the social angle, from the environmental angle, and even from the political angle. In today’s world, we need a horizontal, systemic understanding of change, in order to make sense out of it, and to adapt strategies and operations for a “future-fit” model.

And the third deep conclusion of the book, that is probably a bit more daring, is that much more work needs to be done, including on the theoretical foundations of finance, because some of the old assumptions just no longer hold. We are not in an equilibrium state of well-being; we are in a state of constant disruption. We are moving into uncharted waters. So, we need a new understanding of the forces That are disrupting the economy.  This means sustainability has to become a part of leadership, no longer relegated to some communications department, or reporting department. It’s about strategy; it’s about the future; and that message is very clear. For finance, we also have very concrete contributions—how to bring this change about. Many financial institutions have started the journey, but they haven’t really embraced the sustainability agenda yet. They ask the question, “How do I change my institution to become future-fit?” The book gives some answers.

Prickett: Your point that the theoretical basis of markets and investing needs to be updated, I think 2020 shows how true that is. This is such a disruptive year in every way. To look at markets the way we have in the past is out of date. What kind of reaction do you get to that message? Do you get agreement? Do you get disagreement? Blank stares? How are people reacting to that more fundamental message in the book?

Kell: Well I’m just back from a trip, and I met a couple of top executives, and I’m actually quite confident that this message resonates very well. All executives now face the challenge of re-inventing themselves. Many are discovering only now that these slow moving changes add up to a huge momentum, and you better be prepared. COVID-19, as you hinted at, has clearly brought home the message that being prepared is essential for survival, and these slow moving risks and opportunities add up to enormous new landscapes. Our subtitle of the book is “A Path to a New Horizon,” and we are playing on Mark Carney’s famous quote “the tragedy of the horizon,” which speaks to the dilemma of the short-term versus the long-term. Basically, what it also means, is that as an executive, you have to survive in the day-to-day battle, yes, but you no longer can afford ignoring the long-term trends. Someone has to basically build up the ability to think in multi-time scales simultaneously, and prepare the ground for the future today already.

Prickett: Let’s talk a little bit about the underlying phenomenon—sustainable investing, or ESG Investing as it’s come to be known. You’ve been in this field of sustainability for a long time., How did this phenomenon arise so fast, ESG Investing? And for the cynics out there, is it real? Or is it just window-dressing? Is this a real change in investors’ attitudes or is it just green-washing?

Kell: Let me give a brief historical review of this issue. In 2005, I had the privilege of convincing Kofi Annan and convening a working group with asset owners, called “Who Cares Wins” and they coined the term ESG. We then launched PRI the next year at the New York Stock Exchange, and the issue didn’t really take off, frankly. Yes, some big asset owners, pension funds understood intuitively that negative externalities anywhere affect their portfolios. But it wasn’t really translated into strategies for new investment. Then came the financial crisis; the big story was overregulation, survival, easy money . . . not much happened either. It wasn’t until 2014 that the issue really started to take off with the first meta-studies confirming there is a correlation between good ESG integration at the cooperate level and long-term valuation. At Oxford University one of the meta-studies, was called “From the stockholder to the stakeholder.” Now many more studies have come out now, from Harvard, Singapore, and all over the world, hinting at the relationship. And the debate is still ongoing—Is ESG Investing just a fig leaf or not? I’m convinced now with one-third of global available investment, over thirty trillion dollars, using some kind of ESG filter or selection criteria already—it’s unstoppable.

And what’s behind it is something very basic  our current price signals do not reflect the full extent of both risks and opportunities, because they’re short-term in design, and they behave in a herd movement. ESG, basically, is looking a little bit around the corner,  trying to put valuation on non-traditional financial issues, which we know have relevance financially, over time, but are not yet fully reflected in the price signal. So, it’s like a bridge into the future, not a guarantee, but a bridge, a soft bridge. We do not argue that you should do away with the efficient market hypothesis. No, the price-signaling system is the most effective resource allocator ever invented by humanity. What’s needed is that the price signals more fully reflect the real threats and opportunities around the corner. And that’s what ESG delivers, and that’s what financial institutions increasingly understand. And all over the world now, from Asia to the U.S., from Finland to South Africa, financial institutions are  developing capabilities to better integrate ESG into decision-making and allocations. Yes, the landscape is still very fuzzy out there; there’s a data challenge, there’s an alphabet soup of standards and protocols, but they’re important building blocks: the materiality notion, the SASB definitions in the U.S., integrated reporting in Europe as it’s called, the TCFD framework for financial institutions, the science-based target initiative for the cooperate world (with almost one thousand companies already in it).

We are talking here of big systemic movements, both in the world of finance and in the world of business, which are now taking shape. We also expect that the European taxonomy will be a major boost for this movement, because it will probably bring about a bit more coherence in that field. And yes, there is still a lot of inconsistency, incoherence, benchmarks can be really unclear. . . MIT talks about the aggregate confusion in one of their beautiful review articles, but the whole field is moving in the same direction. And with big data analytics and smart analytics, in particular A.I., increasingly it is possible to identify materially relevant information. Both, from what companies themselves disclose but also from unstructured data reliable elsewhere. And that’s clearly here to stay, because the world will increasingly be dependent on the natural environment and social changes. The pace of change is not slowing down, technological change is irreversible, the planetary boundary feedback loops will increasingly manifest themselves, and force a reaction—ready or not. Also the big social changes that are happening, social movements will not stop, if anything, they will accelerate. So, the drivers behind this agenda are not standing still; therefore, ESG Investing will become the new normal, until price signals better or more fully reflect externalities, opportunities, and cost. And then at some point, you can argue, it is just part of the pricing system. But in this transition period, where we are moving towards more sustainable, decarbonized, cleaner environment, ESG plays an important role.

Prickett: So I think a lot of us are believers in the underlying theory. One of the challenges, as you say, is if you’re looking around the corner, you’re looking ahead of where traditional financial accounting allows us to make objective decisions. And you touched in your previous answer on the thicket of different standards, and the fuzziness that’s out there now in terms of analytics. How should we be thinking about that? How long will it takefor there to be generally accepted accounting metrics for this? How will that turn out if I’m an executive at a public company, riding this wave, given that we don’t know exactly where it’s going to break?

Kell: It’s very hard to predict. It took financial accounting a hundred years to get established, right? A friend of mine always says ESG measurement is currently where financial accounting was in 1925, a few years before the big crash. But maybe the world is turning faster, so the evolution will most likely be faster. A lot depends obviously on the regulatory context, and currently we are on a pathway of fragmentation, but that may change. So, once politics aims at more coherence again and comparability, it may fast track almost overnight. It’s very hard to predict now. We are in a very unique space in human history, where Europe seems go its own way, the U.S. seems to go its own way, China goes its own way, and many other countries are forced to align themselves somewhere in between. We are no longer in a multilateral world where global standard by definition is to decide an outcome politically; on the contrary, political power now is driving fragmentation rather than  harmonization. But the market forces won’t stop . . . they are a-political. The market itself will drive the issue forward. If regulators then come together and give it a boost, it will happen much faster. But even in the absence of regulatory pushes, I’m quite optimistic that market forces themselves will bring about practical coherence pretty soon.

Prickett: Let’s shift gears to your journey. Let’s talk about Georg Kell. You’re sort of voting with your feet on that theory that if governments can’t come together and set the course then markets will. You’ve moved from a role at the U.N., a very important role, founding and leading the Global Compact, and now you’re the chairman of a very interesting company called Arabesque. Tell us about Arabesque, what it’s trying to do, and how did Georg Kell end up chairing this really innovative company.

Kell: Well, I used to be very skeptical about finance, as an engineer, I must confess. For me, finance was always the necessary evil as Keynes put it. But when I retired from the U.N., I came across Arabesque, and I was totally impressed. It’s run by investment bankers, former senior bankers from Barclays, who’s brought it out from there. The idea of jumpstarting finance as a cutlass to me was very attractive. I also had a weak spot for technology itself as the fundamental driver of human progress. So it wasn’t a difficult choice for me. And I like the startup business too, you know, building something is fun. And that’s how I ended up with Arabesque, and I have no regrets whatsoever, because Arabesque has three complimentary business models, all of them related to each other.

One is classic ESG Investing, deep integration of ESG data into investment strategies. The second one is big data, we call it S-Ray, the equivalent to the X-Ray on the human is the S-Ray for the corporate. Big data for sustainability assessment of public listed companies. And the third one, which until recently, I didn’t really believe so much into, but now I’m totally convinced of, is A.I. We have one of Europe’s leading A.I. teams, and the machine they have been building just blows your mind. With my engineering background, I couldn’t quite wrap my mind around it anymore quite frankly. But I understand the power of the signals that it can produce and the enormous capacities for signal strength. It’s foreseeable that A.I. will disrupt finance very quickly in the area of portfolio construction management, for example. It will happen very soon, major disruption. To me, it’s a proof point that progress based on technology, together with the new valuation of ESG, is extremely powerful. And that’s what I like about Arabesque, is that this is their exclusive focus, technology and ESG data. It’s a wonderful playground, very exciting, very demanding. We feel confident for the future . . . but the race is on. It’s a good race.

Prickett: Like you, as an aging Gen Xer, I’m a little skeptical about all the claims of A.I. and how it’s going to change the world.  But you’ve become convinced that it will revolutionize investing?

Kell: I actually started at the Fraunhofer Institute in Germany, and in those days  I actually worked in A.I., in 1983. We had the old systems, the best you could produce was expert systems, and you know, diagnostic systems, with very long and complicated algorithms. I just spent two days, not so long ago, with Google, and I understood, for the first time in my life, the power of big data, and what it brings in additional insights, and the ease with which these insights can be generated. I also realized that the cloud business is revolutionary in so many classic business service functions. So, we are already in the new world, we just haven’t realized it yet.  A lot of companies are already plowing ahead, full force; they’re doing it quietly. They don’t want to be too loud about it, because it could create regulatory reactions, and all sorts of political, social debates. But it’s unstoppable. The challenge now is to ensure that technological progress is used for good purposes, like any new invention we have. We also have the choice, how we apply it. We can use a hammer to build a house; we can use a hammer to kill somebody. The more powerful the technology, the greater the potential on both sides. So, I think A.I., for good, for ESG Investing is a wonderful purpose. I feel very good about that, but that battle is still ahead—the purpose of technology. And the various debates that are playing out already are just a precursor of that.

Prickett: H I like your image of “We’re in the future, we’re just realizing it now.” The tremendous shocks we’re feeling this year, a global pandemic and its associated recession, the almost spontaneous global movement for racial and social justice and the frustration of how long that’s been denied, and of course, the climate crisis that’s upon us. All three of these things have been predicted for a long time. Now the world is waking up to them. How does this affect your thesis about where sustainable investing is headed? What do the shocks of 2020 mean for the ESG Investing movement?

Kell: A crisis always brings out both the good and the bad sides of human beings, of organizations, of collective responses. So we have seen the best and the worst at the same time, and the challenge now is to learn all of this, and to translate it into the good lessons learned. I’m a strong believer in human abilities to reinvent themselves under crisis and stress. I’ve seen it many times at the corporate level—when they hit the wall, when a crisis sets in, and the wakeup call is understood. Then when a new innovation from the inside is fairly easy to make in crisis situations; the barriers of resistance are much lower. So that’s why so many more companies, since COVID broke out, now have embraced climate road maps, for example, and are much more serious. It’s really impressive how the Science Based Target Initiative has welcomed record numbers of new companies, for example. To me, that is a signal that during crisis situations you can implement changes much easier. You can prepare for the future. Now, will the world learn the right lessons? The debate is on-going, how the recovery funds are used . . . Will they be invested for future-fit infrastructure? Or will they just be burned in the moment to continue business as usual? That’s one of the big open questions. Will the world come together again, recognize that there are probable threats which only can be tackled through cooperation? No country will be safe, so long as the virus is hiding out somewhere. We all should have, in our national interest, the willingness to collaborate. Climate changedoesn’t respect national boundaries. Even if we do our share, and the neighbors don’t, it doesn’t assure survival. So, we have every reason to rediscover collaboration. That’s the big bottom line, and I hope the world will ultimately arrive at the same conclusion.

Prickett: Collaboration is the modus operandi of the World Environment Center, which I have the privilege to lead, and you’re one of our valued members. What can WEC do to advance the cause of collaboration for sustainability,particularly in this arena of ESG Investing? How can we be most helpful to Arabesque and to others in your field who are trying to advance this mission?

Kell: Your great work is very important because sharing the best practices and stimulating learnings across sectors and industries is the key now. I’m convinced that old lines of divisions are breaking down. Innovation creates new business models across and between established industries. That’s exactly where you are active. So you play a critical role as a cutlass for best practices to spread wide and fast. And the more you can evolve the better, because the faster the learning, the faster the acceleration of change, the better our chance for having a soft landing in the future.

Prickett: For the W.E.C. members out there, you’ll be glad to know that Georg’s colleagues at Arabesque are working with us on a two-day roundtable on this topic of ESG Investing scheduled for January 27-28. We’ll dig deeper into all of these questions. So stay tuned for more on that. Georg, Is there anything else you’d like to share with our members and other viewers?

Kell: Well, the notion of leadership is always important, you know. It never goes away, at the corporate level, everywhere. The questionis how can you generate momentum for change in the absence of a crisis?  A lot of executives now recognize that they have to move faster on these issues, but they have internal resistance. How can we support them in creating the momentum? That’s one area I suggest for your consideration, because you’re basically helping executives to be successful, and they want to create an internal momentum to advance the change faster.  At a macro level, I’m concerned that strategically, we are falling into a trap, that we are abandoning international collaboration. So anything we can do to demonstrate that through working together we can accomplish more, is extremely precious and valuable. I believe that the Transatlantic Relationship will become stronger again. I think what we’ve just seen in the last two or three years will not reflect the future. So investing in that, I think, is also a good thing to do. Building a transatlantic understanding and making sure that the good historical lessons we’ll have learned won’t get lost but carry us into a safe future together.

Prickett: Well, let’s close on those points, and in particular the one about leadership, and what we all can do to generate momentum for change. At the World Environment Center, we can empower our members and partners to take these ideas forward. You’ve done your share with your new book. The book is Sustainable Investing: A Path to a New Horizon, edited by Georg Kell together with Herman Bril and Andrea Rasche. I commend it to everyone as important reading and hopefully it will encourage us all to push harder for more momentum on sustainability and collaboration. Georg, with that, we’ll draw this interview to a close. Thank you for being with us today.

Kell: Thank you, Glenn. All the best.

WEC & Partners host first Panel session of its Virtual Training & Study Tour

Under WEC’s State Dept funded Environgmental Governance project, in partnership with Jordan Engineers Association, Royal Scientific Society of Jordan, WEC kicks off its Virtual Training & Study Tour Panel 1 on November 9th, with Frank Werner, Director of WEC Europe & Associate Professor Weslynne Ashton making a business case of circular economy and environmental management systems to increase performance by Jordanian companies.

Increasing the adoption of improved environmental practices, technologies, and services, particularly in addressing air pollution, and water and waste management challenges is the objective of WEC’s environmental governance program in both the private and public sectors through a combination of building local experts and business capacity and developing industry self-assessments for data creation and awareness raising for solutions to address environmental challenges.  These efforts will incentivize continued improvement and acquisition of advanced environmental technologies and services

Environmental self-audits allow a company to identify present and potential compliance problems and tackle them before they mushroom and lead to liability or penalties. Increased awareness about environmental management performance can help the company devise strategies to improve manufacturing processes and achieve cost-savings. 

With a clear business case to increase environmental performance of Jordan companies, this Training & Virtual Study Tour is designed to strengthen capacity building in companies that join the project, by training their staff – split into 4 virtual sessions and in a practical part by making an environmental self-audit in their companies with the support of WEC/RSS – providing access to international experts and interacting with relevant stakeholders of the Industrial Sector that provide technological solutions.

Agenda for the event can be found here (PDF opens in a new window). To find more information about WEC’s Capacity Building Programs you can visit here.

Ford Motor Company to Receive World Environment Center’s 2020 Gold Medal Award for Corporate Sustainability

The World Environment Center (WEC) is pleased to announce that its 36th annual Gold Medal for International Corporate Achievement in Sustainable Development will be awarded to Ford Motor Company.  President and Chief Executive Officer of Ford Motor Company, Jim Farley, accepts the Gold Medal Award presented for their outstanding work in Sustainability.

Through a global competition, the independent Gold Medal Jury selected Ford’s application for their commitment to transforming its culture and innovating across the business, from the production line to the design studio; for their commitment to reduce the CO2 emissions from their facilities and their vehicles, in line with the climate targets outlined in the Paris Climate Accord; and for a global carbon reduction strategy focused on powering facilities with renewable energy.

In summarizing the decision of the Gold Medal Jury, Jury Chair Katherine Sierra Former VP for Sustainable Development, the World Bank stated, “On behalf of the independent Jury members, I extend my sincere congratulations to Ford Motor Company for its thoughtful approach to sustainability and social impact. Ford demonstrates its strong commitment to sustainability across its organization, to its customers through innovative products, technologies, and solutions.”

In acknowledging receipt of the prestigious global sustainability award, Ford’s CEO Jim Farley said, “we are honored to accept this year’s Gold Medal award. Under Bill Ford’s leadership for more than 20 years, we are proud of our progress to make sustainability a core part of our business, including supporting and incentivizing the production of electrified products, and creating regulatory certainty that benefits the environment, reduces costs to customers and aims to help us reach our goal of being carbon neutral globally by 2050.”

Glenn Prickett, WEC President & CEO, said, “the World Environment Center congratulates Ford on its Gold Medal Award and looks forward to its continuing leadership to strengthen business performance and create a better society.”

Due to the global pandemic, WEC has decided to forego the annual dinner & award presentation and will hold a virtual presentation in December 2020.

The World Environment Center’s Gold Medal for International Corporate Achievement in Sustainable Development was established in 1985 to recognize significant industry initiatives in global environmental excellence and sustainable development. Recent recipients of the WEC Gold Medal Award are: Ingersoll Rand (now Trane Technologies; 2019), Ecolab (2018), HP Inc. (2017), CH2M (2016), SC Johnson (2015), Unilever (2013), IBM (2012), Nestlé (2011), Wal-Mart Stores (2010), The Coca-Cola Company (2009), and Marks & Spencer (2008).

The Gold Medal Jury is independent of WEC and its programs, and is composed of international leaders from academia, government, non-governmental organizations, and retired industry professionals. You can read the full Jury Citation here.

About Ford Motor Company

Ford Motor Company is a global company based in Dearborn, Michigan. The company designs, manufactures, markets and services a full line of Ford cars, trucks, SUVs, electrified vehicles and Lincoln luxury vehicles, provides financial services through Ford Motor Credit Company and is pursuing leadership positions in electrification; mobility solutions, including self-driving services; and connected services.  Ford employs approximately 187,000 people worldwide. For more information regarding Ford, its products and Ford Motor Credit Company, please visit www.corporate.ford.com.

About the World Environment Center

The World Environment Center, headquartered in Washington, D.C., with offices and operations in emerging and developed markets, is unique in its direct application of sustainable development strategies and practices to the business operations of global companies. WEC creates sustainable business solutions through individual projects in emerging markets; convenes leadership roundtables to shape strategic thinking across a range of sustainability topics with a specific focus on the preparation of business leaders to implement sustainability; and honors industry excellence through its annual Gold Medal Award. An independent non-profit organization, WEC conducts no advocacy activities. For more information, please visit www.wec.org.

Former WEC Board Chair Francisco Suárez Hernández Recognized as one of the 100 Latinos Most Committed to Climate Action

Strengthening the voice of Latinos in the environmental movement

The World Environment Center (WEC) is pleased to announce that Francisco Suárez Hernández, Director Emeritus of WEC, has been recognized as one of the 100 most influential Latinos.

Los 100 Latinos’ list, highlights individuals for their commitment in areas such as climate activism, communications, environmental rights, sustainable policies, and corporate impact.

Throughout his career, Francisco has been committed to addressing the challenges of sustainable development, leading the way towards effective solutions.

He was the first Latino to be Chair of WEC’s Board of Directors (2015-2018) and has been part of organizations like Fondo Mexicano para la Conservación de la Naturaleza, A.C and member of the Global Agenda Council on the Future of Consumer Industries for the World Economic Forum (WEF).

As global board chair of WEC, Francisco personally led outreach to leading Mexican businesses and engaged them as new members of the organization, helping to advance climate action and sustainable development through business practices.

“I’ve known Francisco for over a decade, he is one of the most dedicated and energetic executives that I’ve worked with in the global business community on climate, water, and sustainability.” “Congratulations Francisco, on this well-deserved recognition.” Glenn Prickett, President & CEO of the World Environment Center.

World Environment Center Launches New Website

New website provides easier access to WEC’s work & its impact

The World Environment Center is pleased to announce the launch of its new redesigned website, www.wec.org. The site, designed by Elevation Web Group, has a fresher look that is informative and easier to navigate. It better communicates the tremendous impact WEC has in its thought leadership & capacity building programs.

Visit the new website today and learn what WEC has to offer at www.wec.org.

About the World Environment Center
WEC is an independent, global non-profit, non-advocacy organization that advances sustainable development through the business practices and operations of its member companies and in partnership with governments, multi-lateral organizations, non-governmental organizations, universities and other stakeholders. WEC’s mission is to accelerate sustainability solutions through innovation, thought leadership and public-private collaboration. It manages projects for companies across their global operations, builds executive-level learning and competency in applying sustainable development across a number of business sectors, and recognizes performance excellence through an annual awards program. WEC is headquartered in Washington, D.C., with regional offices in China, El Salvador and Germany.

Follow us on Twitter @WorldEnvCenter, Facebook (@WorldEnvironmentCenter) and LinkedIn

Webinar: Company Practice on Communicating Carbon Neutrality Goals and Achievements: How to Avoid Misunderstandings

We were overwhelmed by the huge interest in the topic of our webinar and cordially thank you all for joining the webinar titled: “Company Practice on Communicating Carbon Neutrality Goals and Achievements: How to Avoid Misunderstandings”

We hope you enjoyed Liz Willmot (Microsoft), Ralf Pfitzner (Volkswagen), Cynthia Cummis (WRI/SBTi) and Wolfgang Berger (DFGE – Institute for Energy, Ecology and Economy) exploring how leading companies are communicating their response to the Paris climate agreement. Glenn Prickett of the World Environment Center moderated the session.

Details of the event can be found here. If you would like the presentation slides & recordings of the webinar please email skonduri@wec.org

The Challenge & the Opportunity

Imagine a vast array of ecosystems comprising a diverse and beautiful countryside with millions of hard-working people committed to the environment. Central America is a region that faces enormous challenges conserving healthy areas that represent their biological and natural resources heritage. Also, challenging is that the population growth and lack of economic vitality that can contribute to stress in this region.

Ernesto Samayoa, Director of Latin American Operations for the World Environment Center, for more than a decade has been working with micro, small and medium enterprises (MSMEs) to build capacity, build competitiveness, and educate about sustainable growth.

“Our network throughout the region into Europe or even Northern Africa can be the real difference for many of these micro, small and medium sized businesses,” Samayoa said. “With the support from the agro-business company Vista Volcanes, WEC helped many smallholder farmers work in partnership with a cooperative to supply green beans with organic practices, which now can be found in grocery stores and restaurants throughout the United States. This has made a real difference to hundreds of farmers with a better and fair price at the end of the day.” 

Or another great example of working with smallholder farmers in terms of helping them work together to build capacity is that of cocoa producers in Honduras, El Salvador and Nicaragua. “They were small farmers and just didn’t have the capacity to do it on their own, but by coming together and then with our help in building the connections and linkages, we helped them fill two shipping containers and that cocoa was sold in Belgium to make fine chocolate,” Samayoa said. “They earned a much better price as well as learned from each other on different methodologies of their agro-businesses.

With up to 95% of companies in Central America as MSMEs, which creates 61% of all jobs in Latin America and the Caribbean, the prosperity of these companies is vital for the stability of the region. WEC has supported a Red de Innovación e Impacto  since 2014. La Red is a collection of 37 innovative organizations from 11 countries in the region. The U.S. State Department has funded WEC and its partners, Le Groupe-conseil baastel Itée (Baastel), and RioSlum Studio, to select organizations that are accelerating business development and promoting sustainable economic growth in Latin America.

Samayoa said, “it has been amazing to see the passion of small farmers and micro-entrepreneurs for the environment with these businesses on things like improving soil conditions through organic agricultural practices, which allows the healthier supply of products to the final consumer. As a fourth-generation coffee grower and an industrial engineer, there is nothing more fulfilling than to see my five children grow up in a region that is perhaps better because of my work contribution.” 

With the financial support from the Walmart Foundation, WEC is starting “Creating Sustainable Value Chains: from subsistence farming to successful agribusinesses in Central America” Program. 

Through this innovative initiative, WEC and local partners will provide integral technical assistance to more than 1100 small farmers in Central America. Training on business, financial and agricultural skills will be shared, helping farmers on competitiveness increasement through higher productivity and cost savings based on technical skills. WEC will also help them on the development of business connections to access markets, national and internationally, as well as sharing digital technology and connectivity toolkits. 

Building on Walmart Foundation’s involvement, Ernesto and the WEC team see a promising opportunity for WEC members and other companies to provide similar support for small producers in their supply chains–in Latin America and other developing regions.  “The Walmart Foundation’s support is a great example of enlightened philanthropy–doing good for people and nature in a region of strategic importance to the company,” said Glenn Prickett, WEC’s President & CEO.  “We can provide WEC members with similar opportunities through our capacity building programs.”

Published here in English. Ver en español