Rio+20: Keep the ball rolling

By Patrick Wirth, Managing Director of GES Switzerland

Second day at the PRI in Person conference. We are hearing a lot of insights from other PRI signatory colleagues who are sharing their challenges, struggles or success in following their ESG paths. Some of them have also been engaging with Brazilian companies in the last days. Some of them even joined our colleague Stina Nilsson in her engagement meeting with a company in Porto Seguro, or Palle Ellemann and myself in our meetings in Sao Paulo and Rio de Janeiro.

While some companies we met just have taken a step to publish a first sustainability report, we also met some of the world’s largest companies within their industry sector who have a long track-record and huge staff dedicated to CSR. Of course it is much easier to influence the first ones. For example the case of a fertilizer company who is importing phosphate from several suppliers, among other from the supplier OPC in Morocco. The management was not aware of the problematic issues of illegal exploitation in Western Sahara associated to this. But they are also not sure whether the phosphate they buy from OPC is really coming from Western Sahara or not. But they want to find out! And this is very positive as it brings another stakeholder on stage to put pressure on OPC to align its phosphate sourcing with international standards.

The coming together and networking at the conference is very inspiring and it provides beneficial networking opportunities. Yes, the mingling includes arguing about the football efforts of the European teams and it is interesting to hear the sharp analysis of our Brazilian colleagues while we enjoy the view on Copacabana. At the same time, we receive not only credit for having engaged with many companies in the past days but also interest in collaboration and assistance for engagement follow ups. Let’s keep the ball rolling!

Rio+20: PRI in Person is on

By Palle Ellemann, Senior Consultant at GES

PRI Chair Wolfgang Engschuber opened the PRI in Person conference with a “status of the nation”. He claimed that it was not just an excuse to go the beach that the meeting is in Rio. The timing was designed as a follow up on the Rio+20 events – we would be able to build the discussions and strategies based on the declaration from Rio+20. So, what are we following up on? Mr Engschuber was actually asked in a high level meeting following the declaration a few days ago, what the investor feedback was on the declaration. He shared that his immediate response was that no investors would invest in a project with so many disclaimers like the Rio+20 declaration – we encourage you to consider, if appropriate… The politicians kept a moment of silence to swallow that message, but responded that many important commitments are made on the local level and THIS is where we can make a difference – on the ground level, working with companies on markets, where countries take the lead.

Pavan Sukhdev, Founder and CEO of TIST Advisory Services, made a call for pricing externalities, in particular water, and stressed that we know we have to do it. It is just a question, if we do it gradually and phase it in or we do it with our backs against the wall, when the world’s limited resources force us to do it.

ESG integration is dead! Says Bill Hartnett, Head of Sustainability at the Australian Local Government Superannuation Scheme and stressed that is was replaced with ESG incorporation, which essentially means that ESG truly becomes part of business assessment and just one part of a range of tools to drive business – together with proxy voting and engagement.

The PRI in Person conference is an excellent opportunity to be re-energised with new input and ideas and, not the least, connect with interesting people from all around the world. Let’s see what the second day will bring.

Rio+20: Change on the ground

By Palle Ellemann, Senior Consultant at GES

Brazilian people are generous people, giving a smile, always offering help. Even by the elevators you are offered the following advice: WARNING, before getting in, make sure the lift is in this floor!

In between the conferences in Rio, we are carrying out a lot of engagement meetings with Brazilian companies. Some of these companies have very specific engagement challenges that have been identified through our GES Global Ethical Standard® screening process of violations of international norms. Other companies we engage with because our GES Risk Rating has identified a significant gap between the ESG risks that a company faces and the ESG preparedness that it has built. This engagement is part of our Emerging Market Engagement product. The different drivers for engagement mean that we are meeting companies with very different ESG preparedness. Some are quite good in a variety of areas, but fail to provide an efficient disclosure or simply fail to cover all relevant material risks.

These past days we have met a fantastic responsiveness to our engagement and the willingness to invest time and resources in driving sustainability and ESG preparedness is very predominant among the Brazilian companies we meet. One clothing company told us the management and the board had discussed the issue of sustainability and had all agreed that this was an irreversible trend and they better step up to the challenge and explore the opportunities. Well, this is like candy for us and we had a great conversation, where we offered our input to how this company could put structure to a process that will help them make the right priorities and exploit the benefits from the sustainability work they were going to do.

It is a privilege to meet companies at this stage in their journey to build sustainability into the business and we see that we can influence them positively to the benefit of the companies, the environment and the society, and the investors.