Sustainability Leadership with a Board View

Sustainability Leadership A Swedish Approach to Transforming your Company,
your industry and the world; with a Board view
The Nordic chapter of the Climate Governance Initiative, in collaboration with World Economic Forum.
The purpose is to engage board directors in Nordics and internationally, to accelerate climate actions and innovation for
sustainable business and a sustainable world.
© All rights reserved by Boards Impact Forum

Introduction by Operations Director Cecilia Wideback West
First survey results
Sustainability Leadership the Swedish Approach, with a Board view
Asia & Malaysia perspective
Poll, Moderated discussion & Q&A with panel
Conclusion & Next
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*Questions via Q&A where
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Sustainability Leadership A Swedish Approach to Transforming your
Company, your industry and the world; with a Board view

Boards Impact Forum
Peer Group Exchanges
1 Climate accountability on boards
2 Command of the subject
3 Board structure
4 Material risk and opportunity
assessment
5 Strategic integration
6 Incentivization
7 Reporting and disclosure
8 Exchange
Impact via
WEF Climate Governance Principles –
applied to full Sustainability scope
Website w blog & Member Section
Webinars & partner events
Surveys, Research & Tools

Meet our Moderater
Chair Boards Impact Forum
Board Member Global Climate Governance Initiative
Chair & NED at 3 listed & 2 private companies

Sunita Rajakumar
You
38 % Nordic
36 % Malaysia
26% Rest of World
from tot 48 countries

Researchhighlights: BOARDROOMGAPonCORPORATERENEWAL&SUSTAINABILITY
• During the pandemic
* innovation has increased (45%) or decreased (42%) and focus has changed to sustainability (71%)
Ref: Corporate Knigsts 2020, McKinsey 2020, SISU Boards/Digoshen 2021
Research on Boards Contribution to Corporate Renewal incl Sustainability 2017-21
w Professor Ludo van der Heyden, INSEAD & Professor Mats Magnusson KTH &
from Boards Impact Forum Chair L Engstam & Fernanda Torre, SSE - House of Innovation
• Nordic Ranks high in many global sustainability & innovation indices,
example 1-9 in SDG Index Score, 1-9 in Global Sustainable Competitive Index
• Nordic holds 0.4% of world population , and 13% of the top global sustainable corporations,
ex Örsted (Dk) Orkla (No), Neste (Fi) & Ericsson (Se)

SENSING
PIVOTING
ALIGNING
Areas for improvement
46% don’t yet have good process to
foresee changes and impacts on
sustainability and business
48% don’t yet actively monitor new
solutions that expedite their business
sustainability towards their purpose
49% are not yet good at taking balanced
risks ensuring corporate renewal
56% doesn’t yet ensure the strategy
harness and reshapes the ecosystem for
better sustainability and diﬀerentiation
51% are not yet good at balancing short
– and long-term value creation
61% have not yet put in place a clear and
effective innovation system , monitoring
innovation activities and culture
Survey findings on corporate renewal for sustainability
44.3% not yet integra/ng sustainability into strategy
60% have not yet discussed
how to engage and consider
sustainability, which
commi=ees ac've in what
areas
rest s/ll need to engage in next
level details, including goal
se>ng (46%) and evalua/on
(62%) to make it eﬀec've.
Ref. Research project SISU Boards

Introducing our first presenters
CEO H2 Green Steel,
NED Electrolux
Former CEO Scania,
NED Sweco,
European Sustainable
Growth Acquisition Corp,
Azelio
Former Sustainability
Exec Ericsson

Transforming your
Board
Boards Impact Forum
June 2021
Review
Copy
For personal use
only
SUSTAINABILITY
LEADERSHIP
A Swedish Approach to
Transforming your
Company,your Industry
and the World
Henrik Henriksson
Elaine Weidman Grunewald
©2021 Henriksson & Grunewald

Presentation structure
• The leadership fundamentals of our book
• Ques5ons boards face
• The ESG Explosion
• Key Takeaways for boards

About the book…..
• Sweden’s Secret Sauce
• 25 Expert interviews
• The Model
• The Formula
• Key takeaways every chapter
• The proceeds
Axel Johnson, Electrolux, EQT, Ericsson, GSMA, Houdini, Investor, Karma, Kinnevik, Netclean, Norrsken, Northvolt,
SAS, Scania, Sweco, Telia, Trine, Verizon, Xynteo
The Model

SUSTAINABILITY
LEADERSHIP
MODEL
1.0 THE
FOUNDATION
2.0 THE CORE
3.0 THE LEAP
Our Sustainability Leadership Model
• The Founda5on – discover your purpose, get the
basics in place, know your footprint, and build trust
through responsible leadership.
• The Core – embed sustainability in your core
business. Make it real by linking it to sales and
customer value crea5on. Set robust metrics.
• The Leap – Find your X-factor. Adopt a societal and
planetary lens, seek unconven5onal partnerships,
and hone your inﬂuencing plaNorm

EXPÖNENTIALITY
FORMULA
It’s a mindset

EXPÖNENTIALITY
FORMULA
Breaking it down
Purpose driven
leadership
Know your impacts
& put a stake in the
ground
Responsible
business to build
trust
Sustainability
at the core
It all comes
down to sales
Impact
beyond profit
Societal
ecosystem- find
new partners &
create value
Beware of digital
risks
Use your
influencing
platform
Ensure a
positive,
exponential
impact on
society and
the planet
X = X factor

Typical issues facing boards
• How to increase the sustainability ambi3on
• How to get sustainability into strategy
• How should the board work with sustainability
• Do we have the needed competence?
• Do we need a board commi;ee?
• What ESG factors and how are they linked to the business model?
• Has the board linked the org goals and strategy directly to its governance
focus and approach?
• What ques3ons should boards ask the company?
• Are risk areas adequately addressed?
• Surveys and rankings - what disclosure frameworks should we consider?

Many boards suﬀer from lack of experAse
• Ceres study 2018 found that of the top 475 of fortune 2000
companies – only 17% had sustainability creden5als; 13% had
oversight of ESG issues, and only 10% regularly reviewed relevant
Sustainability issues at board mee5ngs
• NYU STERN STUDY – analyzed individual creden5als of 1188
Fortune 100 board directors based on bios and found 29% had ESG
• BUT 21% had Social whereas only 6% had Environmental and Governance.
And S was clustered around EHS

What is ESG?
ESG, from an investor perspective, is the use of environmental, social and governance factors in
determining which companies and industries you want in your portfolio — and which you don’t
ESG research firms (eg Bloomberg, MSCI) typically produce scores for a wide range of
companies, providing metrics for comparing different investments. The rating firms use a
variety of criteria to evaluate each of the individual E, S and G components. The higher the
score, the better a company perform,s but criteria are usually different between firms.
There are attempts to standardize, but it’s a bit of a jungle….
From a BOARD perspective, ESG should not just be a score – it means having the necessary
controls in place to ensure good governance, while ideally also pursuing a sustainability proposition
that is tied to your core business. And having facts/data to support this.
17

• Millennials spurred the growth of sustainable investing throughout the 2010s — investors contributed
$51.1 billion to sustainable funds in 2020, compared with less than $5 billion five years ago — according
to industry reports. Now, every generation wants in.
• ESG funds are on track for a record year of inflows, raking in over $21 billion in the first quarter of 2021
(CNBC May 2021)
• Momentum persists - Relative to pre-pandemic levels, global flows into ESG funds have risen >2x,
representing an annual inflow rate of ~45%, according to data from Morningstar. Adoption of
sustainable investment strategies has risen across all regions and styles of investing.
• Environmental, social and governance (ESG) investments could become a $1 trillion category by 2030,
BlackRock’s head of iShares Americas, Armando Senra, told CNBC’s “ETF Edge” .
There is currently an ESG explosion
18

Typical ESG factors
Environmental Social Governance
Biodiversity / land use
Conservation/protection efforts
Stakeholder engagement/relations
Society as a stakeholder
Accountability
Accounting oversight
Carbon emissions/carbon footprint Controversial business areas Code of conduct/ethics
Climate change risks Customer relations/product Board structure/size
Energy use/performance Diversity & inclusion Bribery and corruption
Raw material sourcing (use of
hazardous or other substances of
concern)
Employee relations Management systems/policies
Security/cyber security risks
Regulatory/legal risks/compliance Health and safety (& management
system)
Executive compensation schemes
Supply chain management Human capital management Ownership structure
Waste and recycling Human rights Shareholder rights
Water management Responsible marketing & R&D Transparency
Weather events Union relations Voting procedures
Environmental management system Labor standards & conditions Anti-takeover measures
19
Does your board have competence in these areas?

When Building an ESG/Sustainability Strategy: do the homework
1)
2)
3)
20
Get the basics in place to demonstrate ESG governance and
address the most material issues. Build a committed and
purpose-driven Culture, values and leadership of the
company
Ensure sustainability is integrated with the core
business and with the business case/value
proposition toward customers
Differentiate with a broader industry Vision,
including a core set of data and metrics to
prove it

Key takeaways for Boards
•Be aware how the business is viewed through a sustainability and ESG lens,
both opportuni9es and risks
•Ensure that your board discusses how to engage on sustainability
•Avoid only approving a sustainabilty report – get into the strategy
•Make a plan – start with the basics, move to the core, and then take the leap.
•Ensure regular/quarterly performance updates includes sustainability
performance
•Sustainability visions can be 2030 but targets needs to be 2025
•Connect the GRC work to Sustainability (audit commiKee)
•Tie performance metrics to remunera9on (remunera9on commiKee)
•Onboard new board members, and diversify the board to ensure strategic
understanding of the issues and exper9se in material issues
•Know your key stakeholders’ posi9on on sustainability & ESG

Thank You! Learn more at
h0ps://www.sustainabilityleadershipbook.com

Introducing our next presenter
Founder Climate Governance Initiative Malaysia
Independent Director, NED at
MCIS Insurance Berhad, Zurich General Insurance Malaysia,
Dutch Lady Milk Industries, Berjaya Corporation Berhad

Malaysia & Asia perspective

Participant perspective:Our company has clear sustainability goals,
that drive business results?

Panel Discussion
CEO H2 Green Steel,
NED Electrolux
NED Sweco, Sust SPAC,
Alezio et al
Founder CGI Malaysia
& NED

Thanks to all Presenters, Advisors & Partners
Thanks to our Presenters & Panelists
Henrik Henriksson
Elaine Weidman Grunewald
Sunita Rajakumar
Thanks to The Audience
Operations Committee & Board
Ø Service based on a business model supported by sponsorships and grants.
We extend our deep gratitude to our Partners:

Next at the Boards Impact Forum
Join more International CGI events & tips of other events when signed up as member
Answer Board Survey and get report
August 26, 12-13 CET
Competence for Strategic Sustainable Business
Lise Kingo, NED Sanofi Arne Karlsson, Chair, NED Mette Morsing, Professor, PRME UN Compact, NED
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Sustainability Leadership with a Board View

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