Hogan Lovells – 2023 ESG Game Changers Summit
London, 3 November 2023 - At a recent summit in London, distinguished panellists including partners from Hogan Lovells’ ESG Board came together to discuss some of the key ESG challenges facing corporations today, including the competing forces in the ESG world and the application of differing laws.
The annual event brought together the highest profile speakers from Business, The City, Civil Society and with experience of central Government to help define a path forward and to help drive positive change. This year’s Hogan Lovells 2023 Keynote ESG Address was delivered by influential British entrepreneur and TV personality Deborah Meaden. Read the 2023 keynote address here. Previous speakers have included Paul Polman, the Former CEO of Unilever and co-author of Net Positive, and the then Secretary of State for International Trade, Rt Hon. Anne-Marie Trevelyan MP.
The full list of external 2024 panelists included:
Janine Hirt [CEO, Innovate Finance], Mark Gregory [General Counsel & Corporate Affairs Director, Rolls-Royce], Sophie Lambin [Founder and CEO of Kite Insights], Stuart Burnside [Head of Product Governance & ESG Product, M&G Investments], Kate McKeon [Director, Head of Sustainability, InfraRed Capital Partners] and Bobbie Mellor [Global Head of Sustainability and Transparency, Vodafone Group] and Amos Wittenberg [Founder & CEO, Dovetail Finance].
Hogan Lovells partners: Patrick Sarch, Nicola Evans, Karl Racine, Rita Hunter, Robert Gardener, Adrian Walker.
Summary and Key Takeaways:
1: Industry will be the driver of ESG, not government.
There's a consensus among experts that the impetus for the expansion of ESG practices will be predominantly driven by the industry rather than government. One point raised was that businesses can move quicker and are more flexible than governments and regulators. However, it was stressed that it is imperative for these three bodies to work together. The panelists gave fascinating insights into the significant role of employees as a source of pressure for companies to expand ESG implementation. The competitive advantage in embracing ESG was highlighted in particular by Mark Gregory, indicating a strong business case for proactive ESG initiatives within companies. Also noted was the importance of industry collaboration in the implementation of sustainable innovation.
2: Anti-ESG politics is here to stay.
Hogan Lovells partner and ex Attorney General of Washington, D.C., Karl Racine asserted the enduring challenge against ESG, attributing its persistence to political and financial motivations incentivizing opposition. Partner Nicola Evans and Karl highlighted the increasing opposition to social measures of ESG, particularly in the United States. The panel emphasised the association between principled social measures and company success.
3: The time is NOW.
There was a consensus among panelists that there had been a noticeable shift in the conversation around ESG. Sophie Lambin remarked that while there is general agreement that the ESG framework is imperfect, there is widespread acknowledgement that there is no time to wait for the perfect framework. Janine Hirt, declared that ESG is cemented as a priority in the Fintech industry. As the panel noted previously, ESG was viewed as a niche investment but has now evolved into a mainstream corporate strategy, and that firms failing to prioritise ESG will get left behind.
4: Balancing ESG Regulatory Impact and Resource Allocation for Sustainable Initiatives.
ESG regulations, while not solely about reporting and compliance, aim to drive impactful change. It's crucial not to limit these regulations to mere data reporting requirements but to understand their intention to improve the world. However, the heavy demands of data reporting are leading to a diversion of resources from actual sustainability efforts. Many businesses are allocating significant resources to meet reporting needs, which risks impeding genuine sustainability initiatives across diverse industries. The challenge lies in striking a balance between fulfilling reporting obligations and ensuring these regulations contribute meaningfully to real sustainability actions.
5: Balancing the Complexity of ESG Data with Explanation and Storytelling.
While quantitative data is crucial for compliance and comparison, it's equally vital to incorporate qualitative data, particularly in the social aspects of ESG metrics. (Bobbie Mellor). The complexities of ESG data necessitate explanation and storytelling to provide a context that goes beyond mere numerical or aggregated values. These narratives are fundamental to gaining a comprehensive understanding of the diverse and multifaceted human and environmental challenges and accomplishments embedded within ESG initiatives.
“A key priority for ESG going into 2024 will be to show the relevance and return to those who are currently less engaged in it, but who still have collective power over its future. As Business continues to embed all aspects of ESG into its investment and operational strategies, there is also a need to break down the E, the S, and the G, as well as recognise that misunderstanding of ESG or the perception of its irrelevance can be seized on by third-parties for their own political gain.”[Robert Gardener, Director of Government Affairs]