Achieving Sustainability - Norton Rose Fulbright. | VLearn
Sustainability as an issue is increasingly occupying a prime spot on the agenda of board rooms and C- Suites throughout the UK and globally. This is because it is about the system within which we do business and that system is changing. Whether it is water scarcity, food security, the relentless rise in resources costs, resource scarcity, threats to supply chains, clean energy, severe weather, or social unrest such as the Arab Spring. Businesses increasingly have to manage these impacts.
Many companies faced with one or two of these issues are not yet joining all the dots. However, more and more companies are beginning to do so and understand what this means. There is a systems change taking place. They understand that sustainability is critical to their license to operate, their survival & that they must innovate. They see it is no longer an either or, but that sustainable business means competitive advantage and survival. Whilst the financial markets haven’t caught up yet there is some movement to do so. There is a strong and relentless rise in sustainable & green finance. Increasingly investors understand that some asset classes may be at risk. Part of the problem is that Governments do not always provide a clear and effective signpost to investors through policy & legislation. The policy responses can often be unclear, confused and worst case last minutes & sudden.
As lawyers our core business is advising clients on the changing legislative and legal frameworks within which they must operate. In an ideal world Governments and policy makers would provide a clear & joined up legal framework to respond to the systems change taking place. Unfortunately, in most countries this is not the case. The policy & legislative framework emerging is a patchwork of different approaches, standards and differing from country to country. Our job is to help our clients navigate this patchwork World. For the penny to truly drop and sustainability to be at the heart of strategy in the same way as say competitive advantage Directors need to understand the link between sustainability and value in terms of risk & reward. They have to understand that the risks of waiting for a clear signal from Government in the form of clear, well designed legislation are to great. This is about a systems change. Business history is littered with examples of now defunct companies who were so focused on the short term they did not see, respond to and innovate in the face of such change. In 1930 Samuel Vauclain, Chairman of the Board of the then huge US steam locomotive company Baldwin stated that advances in steam technology would ensure the dominance of the steam engine until at least 1980. We have our modern day examples including Kodak, Blockbusters & Nokia.
However it is understandable this is where the role of advisors such as Norton Rose Fulbright’s are so critical. We as professional advisors owe it to our clients to have one eye on such changes and effectively communicate these to our clients in terms they understand. This is thought leadership; it is about communicating systems change which goes to risk, survival & reward. In a sense this is the value add clients pay market leaders for because it is about true “value creation”. If we wish to be trusted advisors who really deliver value we must not only understand such issues but critically demonstrate the value of issues such as sustainability in terms that each organisation understands; which might mean translating into sector specific metrics, risks and rewards. I have already mentioned Baldwin, the steam locomotion company who did not see the system changing and so failed to innovate. The irony is that during WWI and WWII Baldwin was able to quickly change to manufacture tanks for the war effort. So on a practical and technical level we can assume they would have been able to change to manufacture automobiles, yet they failed to see the transition to the automobile.
Let’s consider a company, which has systems change and innovation at its core. On May 26, 1896, a group of 12 purely industrial stocks were ultimately chosen to form the Dow Jones Industrial Average. Of these, only General Electric currently remains part of that index. This is to some degree a result of a culture of change & innovation. Currently GE is committed to the new green economy. Ecomagination is one of the most successful business campaigns in GEs history. Over 5 years ago GE invested $5 billion in developing green & sustainable products. The return on this investment was so successful they recently increased this investment by an additional $10 billion.
Our dedicated global sustainability and climate change team is at the forefront of the regulatory and market developments emerging’, working closely with governments, financial institutions and corporates across multiple jurisdictions. We have helped our clients to effectively navigate and respond to the risks and opportunities posed by the systems change taking place. We bring a global perspective to the international patchwork of policy and regulation that is emerging. This means we can support our clients by providing solid business advice on the choices and decisions necessary for responding to a risk, opportunity or both, locally and internationally.
When we first engage in dialogue with clients outside of existing relationships one of the key drivers that get us around the table in the first place are cutting edge ideas relevant to risk & reward in that clients business. Of course this has to be backed up by reputation & experience. This is why thought leadership is critical to us as a professional services firm. Something we take seriously and invest in. Communicated effectively and in terms which are relevant to our client’s bottom line and risk management it is what sets us apart from our competitors.
Many of the clients we work with have joined the dots and understand that sustainability is not a ‘nice to have’ but goes to the heart of what their business is about namely risk & reward. They understand the possible impact on their license to operate, business value & critically the opportunities. They are systematically addressing risks, generating value by doing so & seeing growth opportunities. In working with our clients through this transition, the upside for us is that our clients see us as trusted advisors and we often then work with them on the investments which flow from this latest business revolution. The key to our being a true trusted advisor is that we invest in both thought leadership putting us at the cutting edge of such changes combined with an industry focus.
Our dedicated global sustainability and climate change team is at the forefront of regulatory and market developments, working closely with governments, financial institutions and corporates across multiple jurisdictions. We have helped our clients to effectively navigate and respond to the risks and opportunities posed by this sector. We bring a global perspective to the international patchwork of policy and regulation that is emerging.
We have the capability to provide legal advice on climate and sustainable finance anywhere in the world.
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Tags: Norton Rose Fulbright, Sustainability, CMIA, Verified Carbon Standards Association, Climate Bonds Initiative,
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