Oxford and GlobeScan convened a panel and roundtable discussion on 8 December with members of the Oxford-GlobeScan Global Corporate Affairs Council. The event featured some global public opinion insights on the shifting expectations of the global public regarding the Climate Agenda by Chris Coulter, GlobeScan CEO, and perspectives from Miguel Veiga-Pestana, Head of Corporate Affairs & Chief Sustainability Officer, Reckitt, on experiences at and key takeaways from COP26. The session was moderated by Rupert Younger, Director, Oxford University Centre for Corporate Reputation.
Preparing for COP26 a culmination of a journey for Reckitt
In the run-up to COP26, Reckitt adopted a new corporate purpose and a corporate fight to advocate for a cleaner and healthier world, as part of its corporate rebranding. Part of this transformation was to build more awareness and equity in the entity that owns many well-known brands such as Dettol and Durex. Corporate Affairs played a vital role in crafting the narrative.
Part of Reckitt’s shift from shareholder value to stakeholder value creation involved a greater commitment to sustainability which made its presence and involvement at COP26 a critical part of its strategy which had impacts externally with corporate partners such as British Airways and key partners in government and civil society, as well as using the event to engage employees across the company.
Regarding employee engagement, Miguel shared how essential it was to bring the activities and messages from COP26 back into the business via a Live Townhall event from COP26, Yammer conversations, the hosting of an Arts Competition and live broadcasts from Glasgow that employees could follow. The aim was to have a highly visible demonstration of the company’s role and commitment and to retain interest and engagement across the workforce.
Going into COP26 the general feeling among companies and other stakeholders was one of pessimism. Post the event, however, the general feeling is more optimistic. This is mostly a result of business truly showing up for this COP event.
Implications for business and Corporate Affairs
- Firmer role for business: A clearer desire by business to show up created a heightened set of expectations for delivery and advocacy. There is a growing expectation that business will close the gap that governments are not able to close and the ask of business will become therefore increasingly more challenging. The conversation has shifted from investing in technology, innovation, and infrastructure to shifting mindsets and behaviour, which requires new skills including advocacy and collaboration to bring about these changes.
- Capital flows tipping point: Traditionally carbon has not been priced into investments, but the trend from COP26 is that there is now a tipping point in the financial community and that the ESG agenda is sharply in focus around net zero. Investment finance is now an established driver of the Climate Agenda with the Glasgow Financial Alliance for Net Zero (GFANZ) committed to the transition (and representing $130 trillion of assets). Investors will be increasingly focused on corporate climate plans, disclosure and performance.
- Greater transparency and disclosure: We will be seeing a significant increase in mandatory (and benchmarking) reporting and disclosure around the climate agenda. The current, sometimes confusing, multiple-framework reporting environment will continue in the short-term, but greater standardisation and harmonisation is predicted in the near future. Increased reporting and transparency will be seen and experienced across the complete value chain and companies will have to build an end-to-end response. Early signals indicate that companies may be named-and-shamed for poor or no performance on goals.
- A price on carbon: The application of fiscal measures (e.g., tax-based models) and instruments to price in the externalities could be a significant new trend. Carbon pricing is real and on the cards. Whether looking at offsetting or pricing in, companies will have to pro-actively strategise around this trend. In delivering on the commitments made at COP26, the Corporate Affairs function would have to work much closer with Operations to assist and prepare operational divisions to meet the increased level of transparency and reporting linked to it.
- Nature-based solutions: One of the other important developments at COP26 was the significant increase in the importance of nature-based solutions and a greater appreciation for the nature agenda being tied to progress on climate change. The roadmap for corporate leadership in nature is less clear than in other aspects of sustainability. Consequently, Reckitt is working with the Dept of Zoology at the University of Oxford to develop a roadmap on how to best make progress in nature.
- A new global forum for business: Annualization of business engagement in the COP process going forward is a significant development and companies will be required to “show up” annually to report back on progress and demonstrate their continued commitment. The COP process has a clear governance structure and a well-developed accountability mechanisms that will help mitigate greenwashing or grand standing by business, but scrutiny will be high, therefore transparent and robust performance will be paramount.
- A just transition too: While the emphasis on the Environmental dimension of ESG is clear, another implication coming out of COP26 is the growing need to make the transition not just net zero but also just; that is, to ensure there is a fair and equitable shift to a low carbon economy. Corporate Affairs can play a leading role in this effort to engage stakeholders and define the Social dimension of the ESG agenda as it relates to climate.