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Sustainability now: Transition plans meet business strategy · PwC's accounting podcast

0:00
SPEAKER_00: Thought leadership from PWC's National Office.
0:09
SPEAKER_01: Hello, and welcome back to PWC's Accounting Podcast.
0:12
SPEAKER_01: I'm Heather Horn, PWC's U.S.
0:15
SPEAKER_01: Sustainability Technical Leader, and this is Sustainability Now.
0:19
SPEAKER_01: Today we're focusing on the evolving landscape of sustainability reporting and standard setting.
0:24
SPEAKER_01: We'll explore how companies are managing the complexity of multiple frameworks, the progress towards simplification, the growing role of transition plans, and what the future may look like with technology-driven solutions.
0:36
SPEAKER_01: And since we're recording here at New York Climate Week, we'll also touch on some of the key themes and takeaways we're hearing from the events this week.
0:43
SPEAKER_01: For this discussion, I'm so excited to be joined by Marty McBrien, a senior director at the World Business Council for Sustainable Development, or probably better known to you as WBCSD.
0:53
SPEAKER_01: Before we get started, just a quick note.
0:55
SPEAKER_01: If you'd like to watch the video version of this conversation, you'll find a link in the show notes.
1:00
SPEAKER_01: So with that, welcome Marty.
1:01
SPEAKER_01: Hi Heather, how are you?
1:03
SPEAKER_01: So nice to have you back.
1:04
SPEAKER_01: And Marty, so exciting that a year ago you were here with us, and things have changed a lot for you over the past year.
1:11
SPEAKER_01: So can you tell our listeners what you're doing now?
1:14
SPEAKER_01: I certainly can.
1:16
SPEAKER_02: So I've gone from, I'm calling myself a reform standard setter, Heather.
1:19
SPEAKER_02: So I've recently joined WBCSD, as you said, as a senior director, and now I'm looking at corporate performance and accountability.
1:25
SPEAKER_02: How do we drive transition?
1:27
SPEAKER_02: How do we think about building sustainability into BAU across all systems, breaking down the silos, and then what that looks like for disclosure, evaluation, accountability.
1:36
SPEAKER_01: And Marty, I think for many of our listeners, they'll know the acronym WBCSD, particularly probably in the context of the GHG protocol, if nothing else.
1:45
SPEAKER_01: But I think for many of them, it's one of those acronyms they know, but maybe don't fully understand the breadth of what WBCSD is doing.
1:52
SPEAKER_01: So before we get into specifics, can you just give a little more background?
1:55
SPEAKER_01: Sure, Heather.
1:56
SPEAKER_02: Well, I'll start with it.
1:56
SPEAKER_02: PWC is one of our members.
1:58
SPEAKER_02: We have over 250 members at WBCSD, all large corporates from right around the world working together to move forward this agenda on climate, on sustainability to a much better world, if you like.
2:11
SPEAKER_02: And so we were 30 yesterday, we celebrated our 30th birthday.
2:14
SPEAKER_02: Oh, congratulations.
2:14
SPEAKER_02: We were set up at the Rio as part of the Rio conventions.
2:17
SPEAKER_02: We were an outcome of that.
2:18
SPEAKER_02: And so for 30 years, we've been working for solutions, like you said, the GHG protocol and how we bring business together and work with business to raise up the floor, if you like, and drive meaningful action right across the world.
2:29
SPEAKER_01: Wow, it's exciting and ambitious.
2:32
SPEAKER_02: It is, but working with such great companies and firms like yourself, I mean, that really gives us the superpower, if you like, to be able to do that and really, you know, accelerate the change that we need.
2:44
SPEAKER_01: Yeah, very exciting.
2:45
SPEAKER_01: So if, you know, when if I take a step back and if we think about your background, you've been involved in sustainability reporting standard settings for years, many years.
2:57
SPEAKER_01: After being a lumberjack, which maybe you can briefly talk to our audience about.
3:01
SPEAKER_01: People are always interested in that.
3:03
SPEAKER_01: Um, so as you engage with companies, what are you hearing from them?
3:09
SPEAKER_01: So as a stand as a reform standard setter, okay.
3:11
SPEAKER_02: So I set standards and I realize this, which is something now I think about just ages me really badly.
3:16
SPEAKER_02: But I've been, I was a standard setter for 15 years.
3:19
SPEAKER_02: So I was the first person in the world to be talking about climate as a material risk, as a full-time job.
3:24
SPEAKER_02: Uh, and now sort of we come out the other side, right?
3:26
SPEAKER_02: We've set the standards, we've developed the frameworks, we've put the organizations, we've put sort of some of the infrastructure in place, if you like, to do that.
3:33
SPEAKER_02: And for me, it was time to go and I guess bring them to life because you could have perfect standards that absolutely work perfect standards.
3:39
SPEAKER_02: But if they're not implemented and doing what you need those standards to do on any topic, then actually you've kind of not quite one, have you, on what you're trying to adjust.
3:49
SPEAKER_01: No, and especially if companies aren't ready, the data's not ready, the systems aren't ready.
3:54
SPEAKER_01: I mean, there's a lot of challenges.
3:55
SPEAKER_01: Perfect standards are just.
3:57
SPEAKER_02: So now I'm apologizing to everyone and crossing to the other side to now help bring those to life and really build, I guess what I've always loved, but build those capabilities, you know, see where the challenges are with implementing the standards and frameworks, you know, there's there's lots of things out there really supporting business now in raising the floor.
4:12
SPEAKER_02: How do we work with those, build that capability to continue, sorry, to raise us up and move forward?
4:19
SPEAKER_02: But also, you know, work with the standard setters and frameworks right across the world to help drive that much-needed, you know, interoperability, if not the same, and you know, just make it easier because we need these frameworks and standards to be as efficient for companies as they can and effective for the users of that information, regardless of whether they're an investor for financial reporting or a stakeholder that's interested in the business.
4:41
SPEAKER_01: Yeah, I mean, at PwC, we've definitely gotten very focused on simplification, but still high quality standards.
4:48
SPEAKER_01: Now, Marty, though, before we go on, I definitely cannot leave that lumber comment.
4:52
SPEAKER_01: So can you fill our listeners in?
4:55
SPEAKER_02: Absolutely.
4:56
SPEAKER_02: So I did start my career as a forester.
4:58
SPEAKER_02: I studied forestry at university and I started my career in the forest industry.
5:01
SPEAKER_02: And I did get my chainsaw license, Heather, and I did, I remember my first year, second year at university, we actually had to learn to use axes and sharpen our axe and actually go out and logs.
5:12
SPEAKER_02: We, you know, we did all sorts of great stuff.
5:14
SPEAKER_02: I remember studying forest machinery, and actually we had to go and walk out through forestry coops, they call them, but forest-harvested areas and actually look at different bulldozers and DA or a D10 and actually look at them in the trucks.
5:25
SPEAKER_02: And I used to get quite excited about like a machine lifting across logs and the idea of a still the noise of a chainsaw does turn my head and make me look where it is.
5:34
SPEAKER_02: But um, it's a great foundation actually for standard setting and coming into this environmental space because if you think of having standard setting for 15 years, I'm quite old now.
5:42
SPEAKER_02: So back in the day, you know, measuring gas emissions, we actually climbed the stack of the particle board factory and had to put something in and go, right, these are the gases, that's the smoke, right?
5:51
SPEAKER_02: What do we need to the board going in to do it?
5:54
SPEAKER_02: Or I had to walk the walk those big areas of Australia and actually put down quadrants and look at biodiversity on the ground and see what was there, right?
6:00
SPEAKER_02: So I actually had to get heads up into my nails, right?
6:03
SPEAKER_02: So I and technology's changed a lot since then, right?
6:06
SPEAKER_02: So you don't have to get quite so dirty.
6:08
SPEAKER_02: But it does give you a good understanding that when you are setting standards, what is possible for business and what information we kind of need to actually make it decision useful, if you like.
6:16
SPEAKER_02: And that's a real, I think, important part of standard setting now is actually making sure you've got the right, most important information for decisions in this sort of sea of data that you can potentially collect on some of these things.
6:27
SPEAKER_02: So yeah, it was a good, good foundation, but gosh, yeah.
6:31
SPEAKER_02: A long time ago now, but something I'm still, you know, if if there was a job in forestry now that was the right one for me, I would not hesitate to go.
6:38
SPEAKER_01: Forestry conservation, given where we are today.
6:41
SPEAKER_01: So yes.
6:42
SPEAKER_01: And I also I always bring this up because I find it so interesting because I, as our regular listeners know, came from a power and utilities background, auditing power and utilities companies.
6:50
SPEAKER_01: So again, it's coming at it from a different direction, but definitely different types of backgrounds, I think, all coming together to improve the quality of data and sustainability reporting.
7:01
SPEAKER_02: I mean, without those backgrounds, I think that's what makes sustainability just such a brilliant place to work, actually.
7:06
SPEAKER_02: Because it is like this big melting pot.
7:08
SPEAKER_02: And we need it to be this big melting pot of backgrounds and ideas and different, you know, different even thought, you know, thinking.
7:14
SPEAKER_02: It's got the bigger it is, that pot, the better the solutions to the transition are going to be, right?
7:20
SPEAKER_02: Because we need all the brains.
7:20
SPEAKER_02: If we're all just groupthink, then we're not gonna get there, are we?
7:23
SPEAKER_01: No, and I guess, Marty, so I asked you about companies, and we started to talk about simplification and high-quality standards.
7:30
SPEAKER_01: And so when you're talking to companies and working with companies, you know, what how are they feeling about the current state of standard setting and sort of the feasibility of some of what they're being asked to do?
7:42
SPEAKER_02: Yeah, I think this is a really tricky time, I think, for companies in reporting because we've had more than 20 years of voluntary reporting, whether that being through CDP or GRI in the early days, to just somewhat regulated, you know, GSG emissions and annual report.
7:55
SPEAKER_02: You know, we've gone from sort of very voluntary to what now is a very sort of compliant, feeling like a very compliance landscape for reporting of sustainability information.
8:04
SPEAKER_02: And so with that, everyone's going, what do I do?
8:06
SPEAKER_02: You know, there's still lots of framework, you know, we're still worked on harmonization, but there's still a lot more to be done, right?
8:12
SPEAKER_02: So for companies that are like, what do I need to do?
8:14
SPEAKER_02: How do I do it?
8:14
SPEAKER_02: Compliance says this, focus like down on compliance like this, maybe putting too many blinkers on, but down on compliance like this.
8:20
SPEAKER_02: What do I do?
8:21
SPEAKER_02: How do I make sense?
8:22
SPEAKER_02: It's cost me a lot of money.
8:23
SPEAKER_02: And and really thinking about, and you know, this is where I, you know, hope I can add value to this space as of once the standards that I'm now on the other side, is sort of taking that step back and going, okay, what's my story?
8:35
SPEAKER_02: What story am I trying to tell as a company?
8:37
SPEAKER_02: You own your story, right?
8:39
SPEAKER_02: And then what frameworks and standards are out there to help me tell that to the stakeholder I needed to tell them to in a way that is most meaningful for them.
8:46
SPEAKER_02: And actually, some of the other stuff might be noise that can be stopped, and really thinking about the right way to be telling that story, because not everything has to be thrown in a big annual report account or the 10, not everything has to be there, right?
8:59
SPEAKER_02: We're hiding the I heard a I actually had a regulator the other day called Annual Reports Becoming a bit like the Hobbit.
9:05
SPEAKER_02: And I wasn't sure if that was the length of them or the content of it.
9:08
SPEAKER_02: But yeah, basically maybe both, it's depending on what your literature tastes are like, it could be either.
9:13
SPEAKER_02: But they are becoming, you know, quite hard to find the really important stuff.
9:17
SPEAKER_02: So, you know, I think this is a really important moment in time, actually, for preparers of reports to actually stop and have a think about what they're doing and why they're doing it and where the value is, and making sure that what they are doing is getting them value from their stakeholders or their investors or the key audience they're writing them for.
9:35
SPEAKER_01: But so, Marty, it's so interesting to me because I've been recording a number of podcasts this week during Climate Week and focusing on standard setting developments with GHG protocol, which we mentioned, ESRS developments, you know, and just the broader landscape of reporting.
9:50
SPEAKER_01: And I think for so many companies, they're so focused on I have to do this, I have to do that, I have to do this over here.
9:58
SPEAKER_01: And I have so many requirements that this concept of taking a step back and seeing what is my true message, I feel like comes up at the end of every podcast, but it's not maybe front and center for companies.
10:10
SPEAKER_01: So, how are you finding when you're interacting with companies and trying to think about how to help them that their ability to focus on that in this compliance-oriented environment?
10:22
SPEAKER_02: This is really hard right now because I think everyone sort of lent very hard into the ESRSs, right?
10:28
SPEAKER_02: If you were a European company or globally and thought you were going to be affected before the omnibus announcement, then you lent in really, really hard and now you've come back.
10:36
SPEAKER_02: And it's just created that bit of uncertainty, if you like, in the market.
10:40
SPEAKER_02: And not quite answering your question yet, but we are seeing that people are still leaning in.
10:48
SPEAKER_02: They are reporting, money is moving, this is still all going in the right direction, right?
10:52
SPEAKER_02: Despite all that craziness out there.
10:53
SPEAKER_02: But the sort of advice I am giving is what's most material to your business.
10:56
SPEAKER_02: Start with what's most material.
10:58
SPEAKER_02: You know, sometimes just don't, you know, you need to ignore some of this noise out there.
11:02
SPEAKER_02: You are required to report what's most material.
11:04
SPEAKER_02: So do that as a starting point, right?
11:05
SPEAKER_02: Because that's where you, that's where your fiduciary duty is, that's where the legal challenges are going to come, right?
11:11
SPEAKER_02: And then build it out from there.
11:13
SPEAKER_02: But again, we're hearing all sorts of challenges, change challenges around what is material.
11:17
SPEAKER_02: We're hearing challenges around um, you know, everything from, I mean, I think this is a this has been a real challenge for companies, Heather, and it won't be a surprise to you at PWC or probably your listeners, but the silos in companies.
11:27
SPEAKER_02: Yes.
11:28
SPEAKER_02: You know, how do we get the information across all of a sudden with compliance?
11:31
SPEAKER_02: It's in, you know, all of a sudden it's featuring in a different department than it once did.
11:35
SPEAKER_02: And how do we take sustainability from maybe a comms marketing team, maybe from a broom cupboard, you know, down the end of the hall that's completely under resourced and being, you know, just people that love this agenda, right?
11:46
SPEAKER_02: Trying to move it forward as they could incrementing the business to something that's now in boardrooms and risk committees, you know, in you know, in everyday conversations.
11:56
SPEAKER_02: We haven't seen this information before.
11:58
SPEAKER_02: How do you build it into internal control?
11:59
SPEAKER_02: You know, we're really going to, you know, kind of up the game on really on some of the sustainability information as well.
12:04
SPEAKER_02: And, you know, so I think it's it's trying to help people work through, you know, bridging that silo, is understanding that this, you know, the transition plans actually should be just business as usual.
12:14
SPEAKER_02: It should just be part of your strategy.
12:16
SPEAKER_02: You know, it's how are we, we're trying to, we can't be creating more silos, right?
12:20
SPEAKER_02: This is the time where we have to be bringing it all together and integrating it into business as usual, like every other issue that a company deals with.
12:28
SPEAKER_01: Yeah, it's interesting though.
12:29
SPEAKER_01: So if I just take a step back and I think about a US company maybe to start, that's required to report in California, so is going to be reporting GHG emissions, and then they're going to be doing some type of reporting of climate-related risks.
12:43
SPEAKER_01: And so focus really on climate there.
12:46
SPEAKER_01: And then maybe in a year or two, they're going to have to do ESRS for some subsidiaries or you know, the ESRS for non-EU headquartered companies.
12:54
SPEAKER_01: So then going to go more broadly.
12:56
SPEAKER_01: How do you talk to a company that is maybe focused on climate, but that they really do need to think more broadly?
13:05
SPEAKER_01: So you have silos within the companies, but you almost have silos in these topics as well.
13:09
SPEAKER_02: 100% do.
13:10
SPEAKER_02: And this is probably, you know, our fault with standard set is as well, because we went out and I wrote a climate standard.
13:15
SPEAKER_02: I know why.
13:15
SPEAKER_02: Whatever.
13:15
SPEAKER_02: Why don't you point that out?
13:16
SPEAKER_02: But we wrote a climate standard, and then we incrementally add it on nature, and then we're going to water on social.
13:20
SPEAKER_02: Yeah.
13:21
SPEAKER_02: Yeah, yeah.
13:21
SPEAKER_02: And we tend to do this all incrementally.
13:24
SPEAKER_02: And I said the other day, actually, something I was talking about transition plans on.
13:27
SPEAKER_02: I said we need to be thinking about transition plans as all these issues together because we won't transition if we just make one.
13:33
SPEAKER_02: Pick one bit.
13:34
SPEAKER_02: And even if you pick climate, immediately you bring up issues around skills, relocation, you know, all these things will come up, right?
13:42
SPEAKER_02: And so by taking a much more holistic look at where you want to be as a business, what your strategy is and where you want to get to, right?
13:48
SPEAKER_02: Having that much more holistic view will be much more cost-effective and efficient in the long run for you as a business.
13:54
SPEAKER_02: And with that, you know, you can start to think about where you intervene with your policies, what the dependencies are, what levers you need to pull in business.
14:00
SPEAKER_02: You know how to do this.
14:01
SPEAKER_02: You know how to create value in the short, medium, and long term.
14:03
SPEAKER_02: You know what that looks like.
14:04
SPEAKER_02: So starting to pull on some of these, and the earlier on, I mean, first mover advantage on these things, you know, this, I mean, I can't don't have a start on my head, but I just know we can tell you here first movers are the ones that are making the money in this space, right?
14:15
SPEAKER_02: Yes.
14:15
SPEAKER_02: So thinking about these issues from the beginning aren't going to be a bad thing for you.
14:20
SPEAKER_02: And I think we've seen over time, once you do start to have these conversations, you start thinking about climate immediately.
14:25
unknown: Yes.
14:25
SPEAKER_02: Someone says, Oh, what about water?
14:27
SPEAKER_02: It's a drought.
14:27
SPEAKER_02: You know, we're thinking about California, it'll be, well, you say you'll say climate, and everyone'll be like water, drought.
14:32
SPEAKER_02: Yes.
14:32
SPEAKER_02: You know, you know, that's gonna come through very, very fast.
14:35
SPEAKER_02: So I think being more integrated as you're thinking about it from the beginning will help in the long run.
14:40
SPEAKER_01: Yes, although, okay, I'm gonna add one more that we already talked about, but silo in a company, silo on the topics, then we have also the fragmentation of the standards, which we've we've touched on.
14:52
SPEAKER_01: But now, how do you put all these pieces together?
14:54
SPEAKER_01: And do you see at some point maybe it will become simpler?
14:59
SPEAKER_01: I really hope it does become simpler, Helen.
15:02
SPEAKER_02: Um, and I think that's why I've come away from standard setting and out to the world of business, because what I can bring is that insight into how all these standards have sort of come together and why, and think about how we start to help companies navigate their way around these standards.
15:16
SPEAKER_02: And it's not quite equivalent, so I don't think we've got a way to go, but I think we need to be getting smart around the tools we use on how we think about it and what information can we use for multiple purposes and how that maps across between different jurisdictions because large businesses are going to be in California, in Australia, in Hong Kong, in Europe, and in the you know, and in the wider part of the US.
15:39
SPEAKER_02: And it's gonna be absolutely crazy for them.
15:42
SPEAKER_02: But if we can make sure that those basic pieces, if you like, are the same, or or you know, we can as much as they can be.
15:50
SPEAKER_02: Same as much as we can be, then that's gonna be a really good start.
15:53
SPEAKER_02: But you and I both know that every time you change one of these things, there is a cost for business.
15:58
SPEAKER_02: And we need to really start looking at what that cost is, and then working with policymakers, with regulators, with standard setters, with the ecosystem, and even the voluntary ecosystem, because that's also a real challenge.
16:10
SPEAKER_02: We've got the sort of the ISSB and the SRS, the regulated space, but we've also still got the voluntary space, which is just really well-meaning groups of people who should and are rightly trying to move, you know, create the enabling conditions for this work to become, you know, more integrated and mainstream.
16:24
SPEAKER_02: You know, it's all good stuff, don't get me wrong.
16:27
SPEAKER_02: But, you know, an incremental word change in a voluntary standard has a financial cost elsewhere as you're collecting a different piece of information that might just be the same word, slightly different, or it's you know, still in a silo over here because it's still seen as a niche thing, and actually something else that's very slim is going on over here already.
16:44
SPEAKER_02: And so we've got between the issues across businesses, and and that's sort of again why I'm so excited actually about my new job at WCSG, is because it's about how we bring this all together.
16:54
SPEAKER_02: So it's taking the work of all of the other great teams at WBCSD, which focus on some of these niche areas, and building it into that corporate performance and accountability system where we can really start to think about those silos, but also BAU and driving change.
17:09
SPEAKER_01: Yeah, so I have a question for you though, because one of the things we've been talking about recently, and this is partly in the context of we've been thinking about standard setting because we're responding to FREG on their ESRS letter or their sorry, amended ESRS says, but if you look at financial reporting, and we think of sort of modern era financial reporting in the US as starting with the 1930s when the SEC was formed.
17:32
SPEAKER_01: Okay, it's almost a hundred years ago.
17:34
SPEAKER_01: And so now it's like, I know you've been working on standards for some time, but for many, many companies, it's like you've compressed 100 years into three years or five years.
17:46
SPEAKER_01: And I think sometimes standard setters have a challenge of thinking that it is as robust uh infrastructure and that you do have the knowledge and capacity that you have in this 100-year-developed financial reporting world, also in sustainability reporting.
18:02
SPEAKER_01: So, how do you build the skills of the companies?
18:07
SPEAKER_01: Have standard setters recognize that we're not going to accomplish 100 years of progress in two years.
18:13
SPEAKER_01: I mean, it's a lot of challenge there to think about.
18:16
SPEAKER_01: And again, I feel like if you are focusing on helping companies navigate this, this is a real challenge.
18:24
SPEAKER_02: It is about building those enabling conditions.
18:26
SPEAKER_02: It really is, I think, because we the challenge is with sustainability reporting.
18:29
SPEAKER_02: We don't have 100 years.
18:31
SPEAKER_02: Yes.
18:31
SPEAKER_02: And I think that's a really fair point.
18:33
SPEAKER_02: We don't have 100 years.
18:34
SPEAKER_02: Yes, but but in all in saying that, it does take a while to build skills and capabilities on all of these things.
18:39
SPEAKER_02: Build in the resources, have the resources, because we're almost asking you to put sustainability, you put it with treat it with the same rigor.
18:47
SPEAKER_02: Yeah.
18:47
SPEAKER_02: We are asking you to treat it with the same rigor, the same sort of internal processes, the same sort of sign-off as we are your current financial information, but with one probably zillionth of the spend to do it with, right?
18:59
SPEAKER_02: Well, hopefully that's changed.
19:00
SPEAKER_02: That will start that, I mean, that is starting to change.
19:02
SPEAKER_02: Yes.
19:02
SPEAKER_02: But it doesn't quite have all of that backing.
19:04
SPEAKER_02: But we also don't have the skills across all these disciplines yet, because this isn't a sustainability, traditional sustainable, traditional sustainability person coming in and doing this.
19:13
SPEAKER_02: This has to be your job, Heather, it has to be my job, it has to be everyone's job in the business, regardless of the role you play.
19:20
SPEAKER_02: You could be in risk, you could be in legal, you could be in procurement, you could be the CFR, you know, it doesn't matter where you lie, these just have to be skills that are taught into you through your education, through your professional qualifications, through, you know, just through your development, right?
19:33
SPEAKER_02: And we haven't got that built into all these even career pathways, even into job descriptions for these roles, right?
19:41
SPEAKER_02: And so we're all sort of running, building, flying, learning as we're going.
19:45
SPEAKER_02: And, you know, that's hard.
19:46
SPEAKER_02: And in some ways, maybe we just need to get comfortable with being a bit uncomfortable about this and and learning as we're going.
19:52
SPEAKER_02: But also, you know, we need these sort of professions that might not have these experiences yet to know what they know, but also know that actually that's when you call your expert on X, or that's when you call your climate scientist, or that's when you call your, you know, you have you have a group of specialists, if you like, that are the ones that are, you know, feeding in and bringing through them the data, the decision useful data with its controls around it, with its management around it, and feeding it in.
20:15
SPEAKER_02: So, but it also will drive more cons, you know, an approach like that where we've got this built in, is going to drive more consistent comparable data, which is what the standards are all after in the first place, right?
20:24
SPEAKER_02: That decision useful, I keep saying it, but information for the markets.
20:27
SPEAKER_01: And it's critically important.
20:28
SPEAKER_01: And I do think it's interesting.
20:30
SPEAKER_01: So if we specifically focus on transition plans, because you've brought that up a few times, and if I think of bringing all these pieces together, so you have you know the need for management and controls, and a transition plan can't be a marketing plan.
20:45
SPEAKER_01: And you know, you have a business aspect to it, not just the reporting aspect to it.
20:50
SPEAKER_01: So if you think of now, we've come full circle back to the silos.
20:55
SPEAKER_01: How do you break down those silos?
20:57
SPEAKER_01: And again, using transition plans as an example because it's such an important concept right now.
21:02
SPEAKER_02: I mean, we what we really do say, and we have some members that are, you know, transition done their transition plan, moving forward, all that, but we also go to some parts of the world where we talk about transition plans.
21:12
SPEAKER_02: It's just part of our strategy.
21:14
SPEAKER_02: So it's nothing special.
21:16
SPEAKER_02: It's nothing special.
21:16
SPEAKER_02: It should just be part of our strategy.
21:18
SPEAKER_02: Why is this different to my strategy?
21:20
SPEAKER_02: And so I think it's companies do know how to assess their value drivers, how to how to plan for the long term.
21:27
SPEAKER_02: And so, you know, I think those that are thinking about it now as just part of strategy are going to be the ones that get the biggest advantage out of it because it's already connected to all those business decisions functions.
21:38
SPEAKER_02: And, you know, and the money to actually help make those investments, the RD and things to move it forward where they are standalone.
21:44
SPEAKER_02: It does make it more difficult.
21:46
SPEAKER_02: You know, you still have to break, as you said, break down those barriers.
21:48
SPEAKER_02: Who's actually seen it, who signed it off, you know, who's been involved in it?
21:52
SPEAKER_02: You know, often, as you said, you can read them.
21:54
SPEAKER_02: You know, we're obviously advocating for credible transition plans and supporting our members with that, but then you know, there are Of transition plans out there which I pick up and I start flicking through and they talk lots of great numbers and things, but actually, where's the money?
22:07
SPEAKER_02: Yeah, and the substance.
22:08
SPEAKER_02: Where, you know, if I flick through and there's no money, you know, I'm like, well, where's what's going on here?
22:12
SPEAKER_02: Yeah.
22:12
SPEAKER_02: Because these two things don't come for free.
22:16
SPEAKER_02: So, you know, how are we how are we managing that?
22:18
SPEAKER_02: So it is it, but it does require actually having conversations, like you know, crossing to people that you might never have spoken before.
22:24
SPEAKER_02: And it's going to require people to learn new languages.
22:27
SPEAKER_02: Because a bit like the skills piece, I'm a sustainability person, and you know, I'm a bit of a fraud accountant.
22:32
SPEAKER_02: I don't really know what I'm doing.
22:33
SPEAKER_02: You're you've gone a long way, I would say.
22:35
SPEAKER_02: I'm learning, I'm learning, and I'm learning from people like you.
22:37
SPEAKER_02: But you know, I don't, you know, I can talk language maybe of risk and return at a push, but can others, you know, can you cross the CFO and have a really credible conversation about what this means?
22:47
SPEAKER_02: And so I think, but then again, you might look at me head and go, Marty, I've got literally no idea what you're talking about.
22:52
SPEAKER_02: And so it's a part of that giving.
22:54
SPEAKER_02: We've got to we've got to learn each other's languages as well.
22:56
SPEAKER_02: And I I also think back to the days, and this is a bit bit, I'm again aging myself, but in the early days of the work at the Climate Disclosure Standards Board, where I was years ago, where we sat down to do these frameworks for the first time.
23:07
SPEAKER_02: And I wasn't in the room, but I always heard the stories.
23:09
SPEAKER_02: We had climate scientists and accountants in the room, and they sort of walked around each other sniffing each other a bit.
23:13
SPEAKER_02: Because you think this was like 2008, seven, eight, and nine, and everyone's like, what do you do?
23:19
SPEAKER_02: How do you go?
23:19
SPEAKER_02: And sort of smelling and looking.
23:21
SPEAKER_02: It's like dogs in a park where they all meet for the first time.
23:23
SPEAKER_02: So we really need to know each other.
23:26
SPEAKER_02: It was a lot of that, right?
23:27
SPEAKER_02: Yeah, because we didn't quite yet know how to bring all of these pieces to and actually have a conversation.
23:32
SPEAKER_02: And as the conversations went on, like, oh yeah, I get you.
23:36
SPEAKER_02: Oh, I get it.
23:36
SPEAKER_02: Oh, yeah, I see.
23:38
SPEAKER_02: But you know, we're still almost doing that again.
23:41
SPEAKER_02: A bit, a bit.
23:42
SPEAKER_02: So we need, you know, and you know, you and I talk to generally probably more advanced people in this space, generally.
23:48
SPEAKER_02: So, but that's still happening in lots of parts of the world, right?
23:52
SPEAKER_02: How we get to know each other and each other's languages to be able to communicate.
23:58
SPEAKER_02: And then sometimes we just make it a bit too hard.
23:59
SPEAKER_02: Sometimes we use just use too many big words, and actually we need to keep it simple and concise and you know, and and be direct with each other.
24:08
SPEAKER_02: And I think that's gonna help with the silo piece is sitting down, trying to understand it from the other person's perspective, and then how can we move forward?
24:16
SPEAKER_01: So, Marty, it's again, I'm in the position of I'm responsible for sustainability reporting, maybe came from an accounting background, maybe not, but now I have to work across the aisle.
24:26
SPEAKER_01: And I'm looking at my transition plan, I'm listening to these things we're talking about, and I'm thinking about you know, do I have to have a solid transition plan to have credibility with investors or other users of my sustainability statements?
24:40
SPEAKER_01: Or do you think we still have a step to go before it's really, I'll say, de facto required?
24:45
SPEAKER_02: I think, well, actually, this is really interesting.
24:47
SPEAKER_02: Three weeks ago, WBCSD ran a round table with the Principals for Responsible Investment, the London Stock Exchange Group, and we brought in large companies, large investors, the UK regulators.
24:58
SPEAKER_02: Oh.
24:58
SPEAKER_02: And we had a bit of an open-onest conversation about there was a summary published on the internet, so it's all very transparent.
25:03
SPEAKER_02: All right, we'll try to link to that in the show notes.
25:05
SPEAKER_02: But we did have this conversation about what we wanted, you know, what investors wanted from transition plans and what companies sort of were doing and you know, what they were thinking, as the UK regulator was consulting on their regulation, right?
25:17
SPEAKER_02: Because they wanted to make sure that they get the right balance, not too burdensome, but actually providing the market with what's required.
25:23
SPEAKER_02: And it was quite actually quite a good conversation at the end because it's, you know, even investors were saying, you know, well, you we want you to have a transition plan.
25:30
SPEAKER_02: It helps credibility, it's great.
25:33
SPEAKER_02: But we don't, you know, it can be a separate document as long as the key bits are in the main report, you know, don't go overboard.
25:38
SPEAKER_02: This just has to make sense and tell the story.
25:41
SPEAKER_02: So it was a really, you know, it's I think they they want it by the market.
25:45
SPEAKER_02: I think it does add credibility, but it doesn't have to be a standalone document.
25:48
SPEAKER_02: It can be incorporated and it can be done your way, is what we heard, as long as those key pieces of information that are decision useful for them are in the right place.
25:56
SPEAKER_01: Well, and it sounds like if I loop back to what you said before, actually integrating it better in your business strategy is ultimately what the goal is, anyway.
26:03
SPEAKER_02: That's what they're looking for.
26:04
SPEAKER_01: They're looking for this to be integrated.
26:05
SPEAKER_02: And I think at the moment, and it's again just the way these things have evolved, right?
26:09
SPEAKER_02: It transition plans were set up as a you know, a voluntary sort of approach to help start to create those market dynamics and have those regulatory conversations.
26:18
SPEAKER_02: And they're sort of going up in, you know, the market practice is there, the regulators are sort of going, actually, this is quite, you know, this is a good way for us to move forward, help us, you know, set against, and we're here in Climate Week, as you said, there everyone's talking about their nationally determined contributions from the countries as they're coming forward, leading up to COP 30.
26:34
SPEAKER_02: Are we going to get them?
26:35
SPEAKER_02: Are they going to be credible?
26:36
SPEAKER_02: Are they going to continue to move us forward or not?
26:39
SPEAKER_02: And I think when we're thinking about those, you will need good, credible corporate transition plans in place to deliver those government commitments that they're making to the world on how they're going to transition.
26:50
SPEAKER_02: So you you can maybe you may see more regulation or at least directional towards regulation going forward.
26:59
SPEAKER_01: So let me ask a question I have to ask because we're sitting here in New York and so in the United States.
27:04
SPEAKER_01: And so if I'm a company coming from a US perspective, and I can see the importance of this broadly, but also we have the current environment in the US.
27:16
SPEAKER_01: How are, you know, is this something people are even talking about as sort of bridging someone's own transition plan with what might be going on more broadly in the um political or otherwise environment?
27:29
SPEAKER_02: In some ways, this is just your scenario analysis, isn't it?
27:31
SPEAKER_02: Like what you do every day in your business anyway.
27:34
SPEAKER_02: You're looking at you're looking at different scenarios for the future of your business.
27:37
SPEAKER_02: And you can look at them with or without climate and sustainability in your scenarios, or you can take them out, but you'd also have the political context in your scenarios, and you'll work out the best way for you to continue to create value for your shareholders, and they will reward you for that or not, and they will have a conversation with you about it if they don't think you're doing enough or the right thing.
27:58
SPEAKER_02: But you can also ask them if they want one.
28:00
SPEAKER_01: Yeah, and actually that's an excellent answer, Marty, especially because you had to answer that on the fly, because I did not say I was going to ask you that question, but completely agree.
28:08
SPEAKER_01: I think it is something for all companies, no matter where you're located, it is scenarios.
28:14
SPEAKER_01: What is going to happen?
28:15
SPEAKER_01: What is the rate of warming going to be?
28:17
SPEAKER_01: You know, what's going to happen with water and biodiversity and everything else?
28:21
SPEAKER_01: And you may not even agree that climate change is a thing, right?
28:24
SPEAKER_02: You might not even think, I mean, there are people that think that you know, you and I exist in a bubble, but there are people out there that you know don't believe some of these issues are actually important.
28:32
SPEAKER_02: But when you start to model different scenarios, where you're gonna get your workforce for, what are the main inputs on your value chains, things like that, supply chains, then it does, you know, you then start the modeling around that, and you know, this these issues will eventually drive to the surface.
28:45
SPEAKER_01: Yes, yes.
28:46
SPEAKER_01: All right, well, very interesting and definitely a lot from a business perspective.
28:49
SPEAKER_01: And I know you're quite focused on that, but I need to take us back to the world of standard setting and maybe spend a bit more time because of this idea.
28:58
SPEAKER_01: You know, I think we're at a very interesting point.
29:01
SPEAKER_01: I mentioned the fact that FREG has the proposed amended ESRS out there.
29:06
SPEAKER_01: We know the ISSB is continuing to support its standards, it continues to issue educational materials, that you have research projects going on and otherwise.
29:15
SPEAKER_01: We see the California regulations focus on the GHG protocol standard setting there.
29:20
SPEAKER_01: So it's a lot for companies.
29:22
SPEAKER_01: And if I rewind probably to one of the first times you and I met each other, the all the discussion was global baseline and the importance of the global baseline.
29:31
SPEAKER_01: Obviously, you came from the ISSB.
29:33
SPEAKER_01: That is a very large focus of the ISSB.
29:36
SPEAKER_01: But given all these different environments, the different information needs, the different speeds that people are moving, where are we with the global baseline?
29:45
SPEAKER_01: And how do you think this is going to come together?
29:49
SPEAKER_02: So, latest numbers that I saw presented yesterday, where they're now at is 40 countries in the world working in one way to bring the standard ISSB's global baseline, if you like, into play.
30:00
SPEAKER_02: Now, I think 11 are already sort of further along.
30:03
SPEAKER_02: Further along, and the rest are sort of going through the process.
30:06
SPEAKER_02: And I'm I'm I'm paraphrasing but working through that process.
30:10
SPEAKER_02: So there is, you know, there is significant movement and interest in bringing the ISSB standards in in large jurisdictions around the world.
30:17
SPEAKER_02: I think the challenge is with this, is we have the SRSs on top that are moving.
30:21
SPEAKER_02: And so I think any form of mapping or driving more alignment is actually really challenging for business.
30:27
SPEAKER_02: We are very much for, you know, we very much support a global, one global set of standards that can serve and be built on and tailored for jurisdictions at WBCSD.
30:37
SPEAKER_02: And obviously, we're working closely with FRAG and our companies to kind of, you know, work through their challenges and try and bring these things as close as we can together.
30:45
SPEAKER_02: We're pushing out companies now to respond to the SASB standards as well and really put their thoughts through on what sector standards could look like and should look like in the future, as well as very closely following the ISSB's developments to see what work we need to do as WBCSD to support companies in navigating the ISSB, the ESRSs, and the other developments globally.
31:06
SPEAKER_02: Because now I can say, oh, you could just map it.
31:08
SPEAKER_02: You and I both know it's not as simple as just mapping it out, but it's how we can almost put together a I hate the word building blocks, but a building block, you know, a incremental approach that we can actually support and be able to at least know when it deviates, why it deviates, and how it fits together.
31:23
SPEAKER_02: Because we are going to continue to see this mess for a while.
31:28
SPEAKER_02: It is going to be messy for a while because we, you know, the ISSB will make incremental updates, I assume.
31:34
SPEAKER_02: Assume, I don't know.
31:35
SPEAKER_02: But there'll be a post-implementation review at some time, and then there's probably a chance for a bit more of a radic, you know, radical, but you know, update.
31:42
SPEAKER_02: But at the same, you know, FRACs had one year, they've tested it.
31:45
SPEAKER_02: They're kind of like, well, actually, it was maybe it was a bit much.
31:47
SPEAKER_02: Yeah.
31:47
SPEAKER_02: There was a maybe there was a bit much in here, maybe didn't get quite get these things right.
31:50
SPEAKER_02: So they'd done their review after one year before many more companies came into scope.
31:54
SPEAKER_02: You know, I think not everyone in wave one wanted to be quite as exposed to that test.
31:58
SPEAKER_02: But, you know, it has at least sort of put a marker in the sand, and they've now doing their work, sort of bringing it back to something which maybe does what they wanted in the beginning, but maybe just slightly differently.
32:11
SPEAKER_02: So it's not easy, but we are, you know, still want a global set of standards.
32:16
SPEAKER_02: Our companies are global.
32:17
SPEAKER_02: And so the greater we can drive that consistency, again, it comes back to efficiency, access to markets, lower, you know, it's just so much easier for everyone if we back a GHD protocol that everyone can use, have a global baseline of, you know, global baseline of standards for financial materiality, and then impact is a build that's, again, globally harmonized.
32:40
SPEAKER_01: Yeah.
32:41
SPEAKER_01: It's very interesting because uh, you know, you and I have talked about this before, where we see differences in the standard where we think they're trying to say the same thing, but they're different.
32:51
SPEAKER_01: I think those differences are especially frustrating for companies that are trying to implement both.
32:57
SPEAKER_01: They're the ones we have to fix, Heather.
32:58
SPEAKER_01: Yes.
32:58
SPEAKER_02: They're the low-hanging fruit that actually we all just need to get together.
33:02
SPEAKER_01: And both parties need to say what is the best language?
33:04
SPEAKER_01: And I think that needs to be, you know, any that needs to be two parties talking to each other.
33:09
SPEAKER_01: What changes can be.
33:11
SPEAKER_01: Well, I hope I assume they are talking to each other, Heather.
33:13
SPEAKER_02: Um, I mean, they used to when I work there, so I'm sure they still do it now.
33:16
SPEAKER_02: Um, but I think sometimes they do need the corporate voice or the outside voices, not just the standard, you know, standard setters have to hear it from the market.
33:23
SPEAKER_02: Right.
33:23
SPEAKER_02: Right?
33:23
SPEAKER_02: Right.
33:24
SPEAKER_02: You know, they don't just sit there in isolation and go, we want to do this.
33:27
SPEAKER_02: It's they're all both market-led, right?
33:29
SPEAKER_02: Or maybe in African size slightly with policy.
33:31
SPEAKER_02: Right.
33:31
SPEAKER_01: You know, policy behind it, but you know, still very interested in what the users, this broader group of display.
33:38
SPEAKER_02: But it's market-led, right?
33:39
SPEAKER_02: So they need to hear from the market where these changes are.
33:42
SPEAKER_02: So it actually may it may fall down to you and I, Heather, and others, to actually, you know, be leading that charge on where we see them as the same same-ish and why and why they differ, and making that really clear in basis of the conclusion document.
33:56
SPEAKER_02: So people are really clear why that decision was made to differ from the others, but they're very aware of the financial implications of that as well.
34:05
SPEAKER_01: Yeah, but then the other question that we've been talking about, I'm just interested in your perspective, is that we've talked a bit, it's relative infancy of sustainability reporting recognizing.
34:15
SPEAKER_01: I know there's people like you who have been focused for quite some time, that in some ways, having more parties focus on how we can make this reporting better, whether that's I was talking to someone at our firm who's on one of the GHG protocol, one of the work technical working groups, 90 members or so.
34:33
SPEAKER_01: And so, you know, it's good to have all that many people, you know, ISSB, FREC, like there's a lot of people trying to solve the problems, but then it does seem like it's parties like you, the corporates, users, and others that then need to say, okay, it's great you all thought, but now let's try to see the the best of all of these to come to a reporting environment.
34:56
SPEAKER_02: So that's what I love about this, because when you've got PwC, WBCD, all our big brains on this, right?
35:01
SPEAKER_02: We need to grow it up really quickly.
35:02
SPEAKER_02: We need to mature it.
35:03
SPEAKER_02: We need to bring it together.
35:04
SPEAKER_02: Yes.
35:05
SPEAKER_02: And we need to do it much, much faster, unfortunately.
35:09
SPEAKER_02: So we need to go in that direction.
35:11
SPEAKER_02: But with these big thinkers, like we said earlier, that big melting pot, you get those market enabling conditions.
35:16
SPEAKER_02: You should know what works.
35:18
SPEAKER_02: I did hear the other day, um, it was either the IASB or the IESSB, I can't remember which one.
35:23
SPEAKER_02: They say, Oh, it's a bit too early.
35:24
SPEAKER_02: We don't have the market practice yet to be able to move on that.
35:27
SPEAKER_02: But actually, that's what we can do at WBCSD or with all these big brains, is we can actually develop that market practice that allows standard setters to actually set really high quality standards because we know what works and what doesn't.
35:40
SPEAKER_02: And I think that's the benefit of having the 90 people on the GHG protocol.
35:44
SPEAKER_02: You've got 90 people that have tried to do this, right?
35:48
SPEAKER_02: With what they're doing, but yeah.
35:50
SPEAKER_02: Just insane.
35:50
SPEAKER_02: Having loads of great brains, almost crowdsourcing and thinking about solutions, whether it be solving the greenhouse gas protocol or decarbonisation of a country, you know, we need as many brains on this stuff as we can.
36:01
SPEAKER_02: And so that marketing-enabling conditions allow us in those test, you know, sandpits, if you like, yes, on various different approaches will allow us to hopefully when we get to the point where people can set formal standards, they could be much, much high quality and feed straight in without that hundred years of development.
36:18
SPEAKER_01: Of development.
36:19
SPEAKER_01: We have switched to your point earlier, we don't have time for.
36:22
SPEAKER_01: All right.
36:23
SPEAKER_01: So one more sort of philosophical question, and then maybe we'll look ahead.
36:27
SPEAKER_01: So you mentioned the global baseline, and then, you know, from a financial perspective, and then we can bring impact on top.
36:34
SPEAKER_01: Impact and financial are uh risks are quite interrelated.
36:40
SPEAKER_01: And so, how does WBCSD think about this?
36:44
SPEAKER_01: That you do have some standards that are focused only on financial risks and the needs of the users of the general purpose financial statements.
36:50
SPEAKER_01: And then obviously, you we've talked about ESRS, but you have still GRI as well.
36:56
SPEAKER_01: And you know, companies that are focused on impact.
36:58
SPEAKER_01: So, do you see those being married?
37:00
SPEAKER_01: Do you think there's a role for both?
37:02
SPEAKER_01: It's fine if this is something you need to think about some more.
37:05
SPEAKER_02: Absolutely.
37:06
SPEAKER_02: No, I mean, this is something I always think about because I think both sets of information are important to different stakeholders, right?
37:12
SPEAKER_02: And that comes back to who you're telling the story to and what tools to use, right?
37:15
SPEAKER_02: So if you're a regulator in Europe and they say do both, you follow the regulation, right?
37:20
SPEAKER_02: Right.
37:21
SPEAKER_02: You do both.
37:21
SPEAKER_02: But you might still follow the regulation and find out there's still information over here that might be wider impact or dependence, if you want to call it that, wider, wider information that you need to tell to somebody else.
37:33
SPEAKER_02: It might not be the most important information to the business, but it might be important information to stakeholders of the business.
37:38
SPEAKER_02: And so I think about how you want to tell that and and the most appropriate way to tell it.
37:43
SPEAKER_02: And this is where I think people need to get the balance right, because a bit like that Hobbit piece.
37:48
SPEAKER_02: Not everything needs to be in one place, right?
37:51
SPEAKER_02: And this, you know, I there is a there is a space for all of this, right?
37:54
SPEAKER_02: Because we are, you know, it's about almost social license to operate for a large corporate.
37:58
SPEAKER_02: This information needs to be out there in the right way, but not just all, you know, like not all put mixed in together, right?
38:04
SPEAKER_02: Because that is going to hide the most important information for the key stakeholder, regardless of who they are.
38:08
SPEAKER_01: Right.
38:08
SPEAKER_01: Yeah, I think this concept of obscuring information material information, we don't really talk about as much in financial reporting.
38:15
SPEAKER_01: It's I I'm not, I don't think people are reporting a lot of non-material information, maybe, but obviously for sustainability reporting, this is actually a key thing for companies to think about.
38:24
SPEAKER_02: It's been something that I think everyone didn't do it deliberately.
38:27
SPEAKER_02: Everyone just wanted to try and do the right thing.
38:29
SPEAKER_02: Yeah, we're doing all this stuff and it's all great and and providing lots and lots of information.
38:34
SPEAKER_02: We don't have lots of great actual number data points yet in sustainability either.
38:37
SPEAKER_02: So a lot of it is great.
38:39
SPEAKER_01: You don't have a balance sheet, and so it's not all in one place.
38:42
SPEAKER_02: So everyone's kind of just working out how this all works.
38:45
SPEAKER_02: So we are going to see, you know, I think it is going to be challenging, but I think it comes back to the whole materiality point.
38:50
SPEAKER_02: Um, you know, Europe uses a language double materiality.
38:52
SPEAKER_02: I think I've always thought of it more as dynamic materiality and something that is an impact may one day, may one day actually find itself on your balance sheet.
39:01
SPEAKER_02: So it's about knowing that it's in that sphere.
39:03
SPEAKER_02: And, you know, I'm doing some work at the moment because as I've come in, everyone's like materiality mindset.
39:08
SPEAKER_02: And I always think about it, and I know we're on a podcast, so I need to talk about it, not use my hands.
39:12
SPEAKER_02: But think about it like a cone that a dog puts over that.
39:14
SPEAKER_02: You know, when they have an operation, they come in with a cone over their head.
39:17
SPEAKER_02: I feel like we've done a bit like that with materiality.
39:19
SPEAKER_02: We've gone, cone on, what's compliant, do that, rather than going, what is going on in the big wide world at the moment that might affect my business.
39:27
SPEAKER_02: And so actually, I'm doing some work on this at the moment.
39:29
SPEAKER_02: So watch this space, make a little animation.
39:31
SPEAKER_02: Or a drawing of a dog with the well, I'm not quite the dog, I don't think I'd get away with that.
39:35
SPEAKER_02: But I'm doing an animation on this just to help bring it to life for boards and others that don't actually have a lot of time to think about it.
39:40
SPEAKER_02: Yeah.
39:40
SPEAKER_02: But just to encourage people to just think a bit more broadly when they're thinking about what is material and just have it on your radar.
39:47
SPEAKER_02: You know, it doesn't have to get reported, but it then shows up.
39:50
SPEAKER_02: And if it shows up, then at least you're aware and you can think about does it feed food controls?
39:54
SPEAKER_02: It might not be material after that.
39:56
SPEAKER_02: Can you manage for it?
39:56
SPEAKER_02: Or is it something you're just gonna watch over here or might be really important to the stakeholder down the road from your big factory?
40:02
SPEAKER_02: So how are you, you know?
40:03
SPEAKER_01: Yeah, and I mean, I think then this goes back full circle to integration into your business.
40:07
SPEAKER_01: So it all comes back to that, that that's sort of the um, I don't know, the holding key.
40:13
SPEAKER_01: Yeah, the holy grail.
40:14
SPEAKER_01: That's the term of security.
40:15
SPEAKER_02: The holy grail is all of this.
40:17
SPEAKER_02: It's almost like, and I'm only 10 weeks into my job, so I might get sacked.
40:20
SPEAKER_02: But it is almost like the World Business Council of Stable Development doesn't need to exist because the work is done, this is integrated into business, and you know, the challenges have evolved enough and we can move on.
40:29
SPEAKER_02: We are nowhere near that, even after 30 years, I'm sorry to say.
40:32
SPEAKER_02: Maybe we need it even more than we were 30 years ago right now.
40:35
SPEAKER_02: But, you know, I think this is this is where we need to go.
40:38
SPEAKER_02: It's you know, the corporate performance and accountability system at its best fully integrated.
40:44
SPEAKER_01: So on that note, when you're talking to companies and your own organization and standard setters, what's some of the key messaging that you would want them to take away?
40:54
SPEAKER_01: And obviously there's different parties there, but kind of bringing that together.
40:59
SPEAKER_01: Tell your story.
41:00
SPEAKER_02: Don't be led by the frameworks and standards in the market.
41:03
SPEAKER_02: Use those as the tools to help you tell that in the most efficient way to the right audience.
41:08
SPEAKER_01: All right.
41:08
SPEAKER_01: Well, that's a great message.
41:09
SPEAKER_01: I don't think I can ask a question to follow that, but I will take a step back and ask a different question.
41:14
SPEAKER_01: Oh, well, no, I warned at the beginning that I was going to be asking, but I'm sure you picked up on it.
41:19
SPEAKER_01: But I know you're attending a number of events and we're relatively early in uh climate week, but just curious from your perspective, key themes or differences that you've seen compared to the past few years.
41:33
SPEAKER_01: Anything that you'd highlight for people who can't be here?
41:36
SPEAKER_02: There's a hundred thousand people here, Heather, this week.
41:38
SPEAKER_02: A hundred thousand people that have come to New York to talk about climate change.
41:42
SPEAKER_02: That's a lot of people pulling in the right direction.
41:44
SPEAKER_02: I mean, that is fantastic.
41:45
SPEAKER_02: That's a first sort of observation from me.
41:48
SPEAKER_02: When I hear what our companies are doing, it's business as usual.
41:52
SPEAKER_02: They see this as a competitiveness angle, and everyone's just moving on, everyone's sort of putting their head down, ignoring the noise, if you like.
42:00
SPEAKER_02: Can I say that here in the US?
42:01
SPEAKER_02: Ignoring New York, ignoring the noise.
42:03
SPEAKER_02: Ignoring the noise.
42:05
SPEAKER_02: And, you know, even with all these reporting challenges we've talked about, everyone's just head down.
42:08
SPEAKER_02: What do I need to do?
42:10
SPEAKER_02: It makes sense to us, and we're going to continue to move forward on that.
42:13
SPEAKER_02: And I think that's been really refreshing because I wasn't sure how that was going to play out, whether it can continue, but it's going in that direction.
42:20
SPEAKER_02: But also the money's moving.
42:22
SPEAKER_02: And I think that's the other piece that we really got out of our council meeting, yes, was investors in the room where money is still moving in this direction, and it's more than ever financing this stuff.
42:34
SPEAKER_02: So it is paying off for those that are continuing to go in that direction.
42:37
SPEAKER_02: And I think that's the most important thing because I think the message is people going, well, everything's going to stop and come backwards.
42:42
SPEAKER_02: It's not.
42:43
SPEAKER_02: It's not.
42:44
SPEAKER_02: I don't think you can.
42:45
SPEAKER_02: Everyone is still moving.
42:46
SPEAKER_02: Uh, you know, Asia is streets ahead in places, right?
42:49
SPEAKER_02: Really moving.
42:50
SPEAKER_02: I I got this stat the other day, someone told me, and I was like, well, no, but then it's actually true.
42:54
SPEAKER_02: 25% of the world's cars are now plug-in.
42:57
SPEAKER_02: That's a huge number.
42:58
SPEAKER_02: I know, I know.
42:59
SPEAKER_02: And you know, when you get in standard setting, sometimes you miss these actual real developments in the world, right?
43:04
SPEAKER_02: So there is a lot of good things going on right across the world.
43:09
SPEAKER_02: And sure we need more, but I don't think we should forget that when these times are tough and the headwinds and the tailwinds are all kind of circling around us.
43:16
SPEAKER_02: You know, look at what you can do and take that step and keep going incrementally in the direction you can because it will pay off.
43:22
SPEAKER_01: Yes, that immediately came to mind that in some cases, take the subway instead of your plug-in car.
43:27
SPEAKER_01: It will still be more efficient.
43:29
SPEAKER_01: That's right.
43:31
SPEAKER_01: We are here in New York, so it's an apt, an apt analogy.
43:34
SPEAKER_01: So maybe final thoughts, Marty.
43:36
SPEAKER_01: I almost wanted that to be the last question, but just final words of wisdom for our listeners or any points that are top of mind for you that we didn't focus on today.
43:47
SPEAKER_02: I guess with this one, though, that I think my last points were probably some of the better ones, I guess.
43:53
SPEAKER_02: Let's be honest, because you just need to get up with it, right?
43:55
SPEAKER_02: We just need to keep going and do what you can.
43:57
SPEAKER_02: But also, you know, look, don't just look and solve for now, because you know, those headwinds and tailwinds, we've been through this before.
44:03
SPEAKER_02: They circle around and then they clear up and then they come again in different ways.
44:07
SPEAKER_02: And I think we just need to hold tight, right?
44:10
SPEAKER_02: Sit tight in these and move forward and out them.
44:13
SPEAKER_02: But also, reporting is gonna keep changing over the years.
44:15
SPEAKER_02: It is going to mature.
44:16
SPEAKER_02: And I always like to now start joking around what's the future of reporting?
44:19
SPEAKER_02: Yeah.
44:20
SPEAKER_02: It's like you guys are gonna be sitting that, right?
44:21
SPEAKER_02: It's what does this what does this world look like?
44:24
SPEAKER_02: And I'm almost joking, but I don't have a TikTok account, so don't go looking for my TikTok account.
44:28
SPEAKER_02: But they, you know, the world of sustainability information is not gonna be communicated as it is today in five, ten years' time from now, right?
44:34
SPEAKER_02: Even this whole conversation we're having now about the end rapport, is it gonna be sustainability report?
44:38
SPEAKER_02: Where's it gonna look like?
44:39
SPEAKER_02: There's something completely different.
44:40
SPEAKER_02: Something completely different.
44:42
SPEAKER_02: And so, you know, keep moving forward, keep experimenting with how you're doing this and how you're getting that information to people.
44:48
SPEAKER_02: Because we sort of touched on it earlier about the language, but we need to be keeping it simple.
44:52
SPEAKER_02: If we are, you know, go beyond reporting, it's about information and information driving change, right?
44:56
SPEAKER_02: Reporting is just a means to an end.
44:57
SPEAKER_02: It's how you tell your story of all the great work you've done to the stakeholders that need that information, whatever type they are, right?
45:03
SPEAKER_02: So you know, keep experimenting with how you're doing it, keep it simple, keep the language clear, and and just, you know, don't let, I guess no, in some cases, be the answer.
45:13
SPEAKER_02: We need to keep working on different ways.
45:15
SPEAKER_02: And, you know, when in doubt, I mean, I'd listen to this podcast because I'm always inspired when I listen to it, but there's so many great ways of like finding information out nowadays and thinking about this stuff.
45:25
SPEAKER_02: And so, you know, I've got a lot, I don't mean to like go off point, but I'm really hopeful, right?
45:30
SPEAKER_02: Everything I see and hear this week, everyone has just like inspired me with something else so far.
45:35
SPEAKER_02: So, you know, I think we just gotta crack on, hold on tight, get uncomfortable a little bit with being uncomfortable.
45:43
SPEAKER_02: And maybe cross our fingers, hope for some luck.
45:45
SPEAKER_02: But but in all truth, you know, I think it is getting a bit clearer.
45:49
SPEAKER_02: You know, you and I, you and I maybe are two in the detail of standards, Heather.
45:52
SPEAKER_02: But I think I think it is gonna get better.
45:55
SPEAKER_02: It is gonna get better, and we just have to hold on for a few years while we get through this messiness.
45:59
SPEAKER_01: But like accounting standards, like that hundred years, it will, and it will be years, not right, not uh not a century.
46:07
SPEAKER_01: But no, and I I like okay, we have to end now that you said you're hopeful.
46:10
SPEAKER_01: So, Marty, first of all, congratulations on your new role.
46:14
SPEAKER_01: I'm so excited for you, and I'm excited for everyone you're going to be able to help in this role.
46:18
SPEAKER_01: And as always, such a pleasure to talk to you.
46:20
SPEAKER_01: So, thanks so much for joining me today.
46:22
SPEAKER_01: It's a pleasure.
46:22
SPEAKER_01: Thank you.
46:23
SPEAKER_01: All right, thank you.
46:24
SPEAKER_01: And to our listeners, as always, thank you as well for listening to us today.
46:28
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46:33
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46:39
SPEAKER_01: Thanks again for listening.
46:47
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46:49
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46:56
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47:05
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