Pace and scale

As I have engaged with business leaders, leading thinkers, our employees and the wider community around the world this year, I am struck by the increasing sense of urgency about the sustainability challenges we are facing and the recognition that we have many of the solutions to these challenges within reach.

Despite this sense of urgency, even anxiety, we are simply not moving fast or far enough – what we need is pace and scale.

To deliver the right scale of change at the right pace, we must focus less on “what” we need to do – we know this – and focus more on “how” we can deliver the change our planet and society require.

The business context

Many global companies face a dual context whereby on the one hand they contribute to the sustainability challenges facing this world, and on the other hand are being materially impacted by these same challenges. This presents both risks and opportunities for business as they seek to understand the challenges and develop responses. At ERM, our role is to help clients navigate these challenges at a strategic and operational level.

Of the key megatrends presenting major challenges to government, industry and civil society over the coming years, four are particularly relevant to ERM’s work with our clients within the wider context of sustainable development: climate change, digital transformation, population growth and emerging middle classes. Related to each of these are several topics capturing the attention of our clients and their key stakeholders.

In this year’s report, we focus on three of the significant topics that our clients are responding to: climate risk and the energy transition; technology-enabled innovation and the circular economy. For each topic, we describe the risks and opportunities for our clients and how we are working in very practical ways to help them deliver on their stated commitments, throughout their operations. We also outline how we are working with our clients to disclose progress to their stakeholders as the requirement for transparency is growing each year.

Operationalizing sustainability

Business leaders are making bold commitments and setting ambitious targets to drive change – whether this be around carbon, plastics or human rights – and we are helping them do this.

However, setting ambitious sustainability targets is one thing; delivering on them, in complex organizations with extended value chains operating in competitive and complex markets, is another thing.

We describe this challenge as “operationalizing sustainability” – the “how” of driving action and performance. This is where many of our clients are seeking practical and integrated solutions with a strong business case to support innovative technical approaches. This invariably involves digital solutions and the application of technology to improve efficiency, identify trends, predict areas of risk or signals for intervention, and drive performance.

Operationalizing sustainability also requires different parts of the business to come together and work in new ways. Increasingly this includes representatives from strategy, risk, procurement, innovation, business development and other functions. We often find ourselves as facilitators, translators and change managers in these programs – drawing on our practical experience across many sectors, geographies and subject matter. This provides us with unique insights into “how” business is driving to achieve to pace and scale – as they realize the business imperative to do so.

Delivering on our ambition

ERM is the business of sustainability – therefore we are focused on operationalizing sustainability in our own business performance. For example, we have set our own targets to reflect our public commitment to the Science Based Targets initiative and have a strong program in place to contribute to the Sustainable Development Goals. We have strengthened our internal Sustainability Network over the past year and developed online platforms to set targets and drive performance at a business unit level while at the same time appointing a SLT (Senior Leadership Team) Working Group to oversee our Science Based Targets response.

Although we are making good progress in meeting our annual sustainability targets and 5-year goals, we continue to strengthen our focus on those areas where we have not fully met our targets or where we want to aim higher: increasing diversity in our workforce, improving our safety and health performance, and quantifying the sustainability impacts of our work with clients.

Responding to stakeholders

We are proud to be a Global Reporting Initiative (GRI) Standards Pioneer and to be supporting GRI in a number of its initiatives, including the Corporate Leadership Group on Digital Reporting and a project to look at reducing reporting burden for companies. This Sustainability Report 2019 serves as our Communication on Progress, an annual disclosure to stakeholders on progress made in implementing the Ten Principles of the UN Global Compact in the areas of human rights, labor, environment and anti-corruption. As highlighted in this Sustainability Report, we strongly support the Sustainable Development Goals, the Task Force for Climate-related Financial Disclosure, the Principles for Responsible Investment, the Women’s Empowerment Principles and other internationally recognized standards and initiatives.

Over the past year, my team and I have strengthened our engagement with internal and external stakeholders on issues that are important them. This feedback informs our focus on the issues facing our world and our clients, which allows us to prioritize activities within our business strategy.

Appreciation

On behalf of the Executive Committee, I extend my thanks to our clients for placing their trust in ERM and allowing us to support them to build sustainable businesses. I also extend my thanks to our employees for sharing their stories, insights and photography for this report. In particular, we recognize the considerable contributions of more than 200 voluntary members of our Sustainability Network who help drive action across the company. The people of ERM deliver on our purpose of shaping a sustainable future with the world’s leading organizations every day: in the services we provide our clients, the projects we support through the ERM Foundation and the way we operate our business.

ERM is committed to working with leading organizations to achieve change with pace and at scale.

Keryn James
Group Chief Executive