Even I didn’t anticipate how quickly and brutally the ESG wars would escalate. Every day, there are new examples in the Wall Street Journal, in Congressional committees, even on the front page of the New York Times. LinkedIn is filled with articles proving or disproving the financial merits of ESG.

There are a few basic rules that can help ESG practitioners navigate these wars:

1. If what you are doing makes sense, keep doing it. 

Understanding emerging risks is smart, good business.  Finding opportunities (often by understanding and addressing those risks faster or better than the competition) is even smarter good business. The climate is changing; the labor force and consumers and even investors are getting more diverse; and investors know that climate and diversity will deeply influence the future value of their investments. Face it and prepare for it.

2. If what you are doing doesn’t make sense, stop doing it.

Don’t wait to be called out on it. Don’t follow the herd if the herd’s going someplace that doesn’t make sense for your business. Don’t do something because it will give you a nice award in DC or Phoenix. Don’t use your corporate time and money to preach to the choir.

3. If you face ESG blowback from your Board or C-Suite, try to differentiate between the “sincere objections” and the “insincere objections.”

There are perfectly good reasons to question much of what’s done in the name of ESG. There is too much reporting; too little substance; too much ‘climate Olympics’ of who can launch the biggest, boldest commitment; too much following the crowd to sign up to the latest improbable pledge. In sales jargon, these questions would be called “sincere objections,” authentic statements of unmet needs. Sincere objections need to be heard, acknowledged and addressed.

There are also what salespeople call “insincere objections.” These are objections which can’t really be satisfied; it wouldn’t make a difference even if you did address them. Many of the insincere objections to ESG are smokescreens for political performance and orchestrated outrage. Others are attacks on any attempt to challenge or limit business. These insincere objections also give permission to those who never really bought into ESG efforts but couldn’t find a strong argument against them.

4. Protect your credibility.

I quoted my colleague Steve Hellem in that earlier 2023 piece: “Credibility and honesty are the ‘north stars’ of ESG progress.” That was good advice before the ESG wars escalated; now, it’s absolutely essential. Promise less and do more. If you’re exaggerating accomplishments, stop. If you’re making promises you can’t keep, stop. If it makes strategic sense for your business to make bold commitments that require unproven technology, admit it. Perhaps belatedly, the greenwash police are out there looking. And if they don’t find you, the SEC just might.

This is all probably going to get worse before it gets better. Don’t expect a sudden outbreak of sanity before the 2024 election is done and settled (and we saw how long that took for the 2020 election). Settle in, focus on what’s important, and get on with your important work.

The post Keep Calm and Carry On: Navigating the ESG Wars appeared first on Nadler Strategy LLC.

Indications are that the SEC is going to publish some form of climate/ESG rule in April. We don’t know exactly what will be included. But we have enough clues (including some of the Commissioners’ own words) to understand the direction they’re heading in, even if we don’t know exactly how far they’ll go. We know there will be legal challenges, but so does the SEC. 

Devoid of any inside information (and certainly without any leaked drafts), it’s best to assume that any rule will:

• Focus heavily on business risk
• Address present and historical consistency in both filings and public communications
• Open the door to Scope 3 reporting, though they seem to be wrestling with this one

Leading companies are not waiting to see the precise language. C-suite leaders are already asking questions about how their company is prepared for the anticipated rule. 

GEMI (www.gemi.org) convened two work sessions on SEC Disclosure Preparation in 2022, that produced some thoughtful and practical suggestions:

1. Make a list of everything your company has said in your 10Ks (and any other SEC filings) about climate and climate risk. Check to see what your basis (real data) was for those statements.
2. Make a list of everything you’ve said about climate and climate risk in TCFD, CDP and other reports. Check to see what your basis was for those statements. And especially check to see if those statements are consistent with everything on your list from #1 above.
3. Make a list of all climate-related commitments you’ve made in any public forum, announcement or filing, including GHG reductions. Check to see how you’re doing and if you can demonstrate progress.

Those three steps won’t cover everything in the SEC rule by any stretch. But they’re a good place to start. If the SEC rule is held up in litigation, don’t be surprised if the SEC moves ahead in the meantime by enforcing climate representations under existing authority. Knowing what you’ve said, what you’ve promised and what you’ve done isn’t a bad place to start.

GEMI is going to reconvene its SEC Disclosure Preparation work group, to enable corporate ESG professionals and their counterparts in other functions (such as Finance, Internal Audit, etc.) to work collaboratively on practical steps to take. If you’re interested, please contact GEMI Executive Director Steve Hellem (shellem@navista.net ) or Scott Nadler, GEMI Senior Fellow   (senadler@nadlerstrategy.com).

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The answer’s not blowing in the winds – and in 2023 there’s going to be a lot of head winds and tail winds. You’re going to hear claims that ESG is salvation and that ESG is the devil. You’ll see new issues, challenges that advocates will claim are “the next big thing”. Be prepared for disruptions and to make adjustments. But focus on what’s important, set a course based on that, and stay on your course (with smart flexibility).

2. Protect and create value

This could be a tough year economically. Be aware, but don’t let distractors and scare mongers keep you up at night. Focus on the real risks and opportunities for your company. What do you need to do now to protect and create value, now and in the future?

3. Build and strengthen your partnerships and collaborations – both internally and externally

You can’t do everything  alone. Enlist, engage and respect your partners, both inside your organization and outside. Share the work, and especially share the credit for success. 

4. Less reporting, more doing

Transparency and accountability are good and necessary. Spending more time and resources talking about what you do than actually doing it is bad. 

5. Protect your credibility

If people can’t trust you and your company, nothing else matters. My colleague Steve Hellem sums this up neatly: “Credibility and honesty are the ‘north stars’ of ESG progress.” Promise less and do more. If your company has made a big ambitious commitment without knowing how you’ll get there, (a) be honest about the situation and (b) figure out how you will start delivering on those commitments. 

If you stick with these five resolutions in 2023, it will be a much better year for you, your programs, your company and your career.

[Opinions in this blog are solely those of Scott Nadler. They do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

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“More companies are making climate pledges about their climate ambitions every day. Some pledges are framed in terms of percentage reduction goals. Others take the form of setting a date when a company will be “net zero” or “carbon neutral.” Still others are identified are science-based targets. For too many companies, these pledges have one or more “honesty” flaws

“Pretending you’re ready for climate change, if you’re not, is just another form of climate denial.

“Make climate a business solution instead of a legal or reputation problem. Get your senior management in the room and start working on climate with them – honestly.”

Please see my new article on GreenBiz.com: “It’s time we all get more honest about climate strategies.”

[Opinions in this blog are solely those of Scott Nadler. They do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

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Respondents pointed to key steps that need to be taken BEFORE locking into corporate ESG goals:

• Engage with the people who have to implement those goals.
• Ensure senior-level support for reaching goals, not just setting them.
• Get the funding.
• Make sure the technology exists and works.
• Have a clear path, with a road map to reaching your targets.
• Set clear accountability for the relentless follow-up it takes to make change happen.

There may be a real opportunity to help operationalize sustainability: leverage EHS experience and leaders. Nearly 40% of survey respondents said ESG and EHS are in separate groups in their company, who coordinate loosely or have very little connection – even though EHS may have some of the critical skills and networks to operationalize sustainability goals.

Full disclosure: Some of the survey questions emerged from – and will feed back into — an intriguing work group I lead for GEMI. The “Emerging Sustainability Leadership” project kicked off in 2021 to help sustainability leaders face the increasing pressures on their companies and roles, and develop capabilities required to lead sustainable business into the future.  As the project continues into 2022, it includes both ESG and EHS leaders (and some with both responsibilities), providing unique perspective on the challenges of operationalizing sustainability.

[Opinions in this blog are solely those of Scott Nadler. They do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

The post The hard part: Operationalizing Sustainability appeared first on Nadler Strategy LLC.

The article emerged as I sat in Santa Fe NM in August, watching our beautiful clear turquoise sky befouled by smoke from wildfires. It was refined through a process that included my colleague Steve Hellem, Executive Director of GEMI, bluntly challenging me to articulate what people can really do, rather than wallowing in self-flagellation.

The sun rises over the Sangre de Cristo mountains, both mountains and sky obscured by smoke from wildfires in multiple western states.

It was also refined through the process of the Jewish High Holy Days. That helped remind me that while I cannot go back in time and change actions that I now regret, I can act now in such a way that I have less to regret in the future. Or, as the Neo-Talmudic sage Willie Nelson wrote: “I could cry about the time I’ve wasted, but that’s a waste of time and tears.”

Looking at climate change, we don’t have the luxury of time and tears. We have to act now. Please take a look at the article and let me know your thoughts. And if you think the message is worth sharing, please send it on to others, or find it on LinkedIn at https://bit.ly/LIconstr-disrupt  and like/comment/share.

[Opinions in this blog are solely those of Scott Nadler. They do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

The post It’s time to become constructively disruptive appeared first on Nadler Strategy LLC.

“We need to see the big picture and begin bold adaptation. There is no time to waste. …This ever-rising tide will not bow to legislative edicts, politics, or financial constraints…. [I]t is both a crisis and an opportunity. If we act sooner and smarter, there will be more opportunity and less crisis.” 

John Englander, Moving to Higher Ground

John has been my Sea Level Rise mentor, but really my broader climate/adaptation guru. He is the one who enabled me to finally get my head around what we’re facing across the whole range of climate impacts. John helped me understand that stopping every GHG source tomorrow wouldn’t solve the problem. As he writes in his new book: “Even if the whole world could instantly switch to 100% renewable energy, such as solar or wind, sea level will continue to rise due to the excess heat already stored in the ocean, which has an effect of melting the ice on land.”

We all have to fight against the false choice of whether to fight climate change (strangely called “mitigation”) or prepare for it (“adaptation”). The answer is “both”.  We can’t choose one or the other. That would be like getting a diagnosis of lung cancer and asking your doctor which you should do, stop smoking or get treatment. The answer is obvious: both. (To be fair, that’s my grim analogy, not John’s.)

Moving to Higher Ground is essential reading for SLR, but also provides a unique framing for thinking about all climate uncertainty and action. John introduces constructive ways of working on adaptation, including adaptive engineering, intelligent adaptation, and why we need (but can’t wait for) professionals to change things like building codes.

Get it. Read it. Think about it. Act on it.

[Opinions in this blog are solely those of Scott Nadler. They do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

The post John Englander and the Urgency of Adaptation appeared first on Nadler Strategy LLC.

For more, check out my new article “Avoiding the Resilience Trap” in the annual thought leadership publication from Old Mutual Limited (OML), a premium African financial services group. 

The post Avoiding the Resilience Trap appeared first on Nadler Strategy LLC.

There is no template for how to close out a year like 2020, and we can’t impact much of 2020 at this point. But how we approach 2021 is very much in our control. 

Take some time to think about how you want to kick off the New Year and what type of leader you want to be. What will be your priorities in the new year? Where can you have an impact? Where can you be an advocate and create action, and where will you be more reactive?  

Make time to ask yourself: What kind of leader will you be in 2021?

[Opinions in this blog are solely those of Scott Nadler. They do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

The post What kind of leader will you be in 2021? appeared first on Nadler Strategy LLC.

Are you the person in the room who knew about PPE prior to 2020, and suddenly has valued expertise and perspective? Maybe you’re suddenly in the spotlight and being asked about when the office can reopen. But what about 2021 planning, future PPE budgets, the climate change adaptation clock that’s ticking and that D&I policy that’s still being neglected?

Senior management doesn’t necessarily know what needs to be done. Top leadership looks to rising leaders for insight and action plans. 

Now that the status quo has already been disrupted, there may be less resistance to breaking existing patterns – and there may even be active desire for new approaches. 

Deciding to be a leader means speaking out about what matters now, and for the road ahead – not just reacting to the questions that you happen to be asked. 

[Opinions in this blog are solely those of Scott Nadler. They do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

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