Dr Zeynep Hizir, Digital Transformation Influencer.

Sara Benwell: In the absence of industrywide consensus, what does accountability look like and how easy is it to check that firms are keeping to their ESG promises?

Dr. Zeynep Hizir: In terms of sustainability and governance, it is about ensuring that companies and organisations have the appropriate ESG strategy in order to manage and minimise their operational, reputational, and regulatory risks.

“ESG is about future proofing the business, and therefore needs to be executed rather than delegated.“

In this strategy it is also important to have accountability of who is going to be in charge of said strategy. Oftentimes there is a will to delegate, but ESG is about future proofing the business, and therefore needs to be executed rather than delegated.

The word sustainability tells you that if you aren’t considering and implementing it, you are not going to last in this environment.

Sara: To what extent do we need to be thinking about integrating sustainability, not just on the investment side, but across the whole company? How do we hold people accountable there and ensure that these two sides match up?

Zeynep: According to a Forrester study, more than half of the Zoomer generation – those born after 1996 – will ensure that a brand’s values align with their principles on corporate governance and social responsibility before making a purchase.

This demonstrates that it is not generic or a gimmick, but about future proofing the business. The upcoming generations are much more aware, and it is no longer a tick box exercise.

“More than half of the Zoomer generation will ensure that a brand’s values align with their principles on corporate governance… before making a purchase.”

When I studied this topic in school it was studied as corporate social responsibility. When we talk to certain CEOs about their views on ESG before this movement had come around, they didn’t feel that they had to have a statement on it, but just felt that the business was run a certain way.

Now, there are more requirements and demands in this area, so the terminology has outgrown the corporate social responsibility to become ESG, which is much more demanding.

Sara: What role do evolving regulatory requirements play in the development of governance structures?

Zeynep: Part of my research is also focused on automation and automating some of these reporting requirements and analysis.

The data capturing, validation, and analysis is really where we can get some value. This is not only because it just makes sense and is error-proof, but it makes for very interesting work.

“It is really important for companies that the automation, and digital aspect is a part of their transformation journey.”

Some firms may say that they have a team of six people, and that they don’t have the resources to be looking through all of this information, but the upcoming generation will not accept that.

They are not looking into buying or owning. Everything is much more about the experience of things, and so it is really important for companies that the automation, and digital aspect is a part of their transformation journey.

 

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