Inspiring board sessions by GUBERNA’s Sounding Board Committee for Sustainability

Olivier Thiel, Senior Managing Director of France, Germany, Poland and Spain and Head of Development Belgium, got the opportunity – on behalf of CEO Marnix Galle -- to clarify the Immobel sustainability and ESG approach by way of an introductory welcome speech.

Subsequently Karen Dumery, as leader of the GUBERNA Sounding Board Committee for Sustainability introduced the evening with an explanation of the concept and a compelling message.

In summary, her message went along these lines: “We cannot deny what nature is telling us. We have crossed 6 of the 9 planetary boundaries. We have reached levels flirting with the symbolic threshold of 1.5°C warming compared to the start of the industrial era, leading to more frequent extreme weather events and upheavals in natural balances. The world as we know it and have enjoyed is no longer guaranteed for future generations. An ever-increasing degree is the difference between a liveable and non-liveable planet. Can the European Union become the first climate-neutral continent by 2050 and therefore drastically reduce its emissions? The next ten years will be critical.”

“We cannot deny the climate change: the world as we know it and have enjoyed is no longer guaranteed for future generations. The next ten years are critical. So where does that place us as company directors?" 

Karen Dumery

So where does that place us as company directors? The governance around sustainability is rightfully gaining traction. What choices do we have to make? To meet the ambitious climate targets, a radical transformation is needed. Taking a few incremental steps will not be sufficient. What ambition levels do we set in the board to avert the course? What is needed for a faster transition to a low-carbon economy? Faced with these predicaments, it is good to talk and exchange ideas among like-minded board members in an informal setting.”

Board discussion on a case study

In advance, the organizing committee had written out two concrete ESG boardroom cases based on a set of real challenges. These cases were remarkably well prepared and contained 12 questions for an informed board discussion. These could deal with the information needed to make an informed board decision, the possible structural adjustments in committee operations, the determination of specific ESG KPIs, the approach to progress monitoring, the trade-off between short-term profitability versus long-term sustainability, the profiles for new directors, the stakeholder policy, the importance of ESG ratings, and so on. But let’s not reveal any details about the content of this valuable and repeatable exercise. By the way: "Les absents ont toujours tort."

"With these fascinating case studies, we explored how the board can putsustainable value creation into practice."

Cautionary words, complex jargon, justified proposal refinements, subtle nuances, occasional witticisms... It all came up in different styles and degrees. And yes: a basic director quality is the courage to ask critical and constructive questions.  

As Nicolas Coomans would recommend in his closing speech: “The board of directors has the power to decide that sustainability will be embedded in all the company’s operations, in the enterprise risk management system, and the reporting. Therefore the board needs information and adequate reflection on this topic.

Take aways

Six spokespersons were then given five minutes to explain their answers in the plenary session. Perhaps these quotes can give the reader a slight impression of the tone of their relevant reports:

• Your materiality map should be dynamic and regularly updated
• Let’s call for a session to make ESG a top priority in our company!
• Let’s make our board fit for ESG and align the leadership.
• We listed the pros and cons of creating a new ESG board committee.
• Is the monitoring complete? Has everything important been reported?
• Even when you talk about ESG the real bottom line remains the financial outcome to support all the rest!
• We do not only need new ideas, we also need bold ideas with a real social impact.
• We need a stakeholder committee to help monitor our dashboard.
• Let’s add some specific questions to our scenario management.
• What will be the true impact of those different ESG ratings?
• We need specific KPIs and an external audit!
• Tell us the full story of the total value chain.
• We should have also an eye on the ‘shit of the past’ and deal with our historical pollution and our poor waste management…
• Do you know the tremendous risks of ‘not’ dealing with ESG issues?  
• Is such investment compatible with our sustainability strategy and what are the sustainability risks associated with this investment?
• Have we done our due diligence to verify the environmental and social track record of the company in which we want to invest?
• Can you avoid an ESG activist campaign about our legacies by engaging more proactively with our different stakeholders?
• Let’s try to build a positive and clean story for the future.

These findings make at least clear that the board has to lead by example and needs some sustainability expertise and ESG maturity among its members, capable of challenging and steering the management on sustainability matters.

"Climate change and ESG are of course closely related to the current sustainable value creation debate"

Nicolas Coomans

He clearly identified the 3 main roles of the board when it comes to sustainability:

1. Strategy: The board is like a boat captain who must steer the company and make the choices that will define its future course of action. Accordingly, we see more and more companies divesting from harmful activities, to invest in those that contribute to a sustainable transition.  Such strategic reorientation must start with a proper materiality analysis, including the identification of the expectations of the relevant company stakeholders.

2. Supervision: The board should make sure that sustainability is embedded in the company’s operations, risk management system, and reporting. Therefore the board needs to be properly informed. When it comes to sustainability, data is the new gold.

3. Leadership: As the board should make sure that the company is led by a competent management team, sustainability criteria should be embedded in the selection process, the evaluation and the remuneration of the executives. Leadership also means getting the necessary sustainability expertise on the board.

And Julie Tomé had the pleasant task of thanking the host company and all attendees for their cooperation and inviting them to the closing reception.