UNGA ‘22: Ukraine’s Shadow Blocks Global Spotlight
By Richard Howitt, Skytop Contributor / September 30th, 2022
Richard’s background celebrates three decades as a strategic thinker who integrates innovation into organizational practice. A 22-year member of the European Parliament Rapporteur on Corporate Social Responsibility, he led the EU’s Non-Financial Reporting Directive. This initiative, recognized as the world’s foremost legislation on Corporate Transparency, brought him to new challenges.
This includes his work as CEO of the International Integrated Reporting Council, the Task Force on Climate-Related Financial Disclosure, Advisor to the UN Global Compact, Member of the European Commission SDG Platform, and the UN Guiding Principles for Business and Human Rights Reporting Framework Eminent Persons’ Group.
Richard is recognized as a Sage Top 100 Global Business Influencer, Thomson Reuters ‘Top 30’ Influencer in Risk, Compliance and Regtech. He is a Member of the B20 International Business Leaders’ Group and its Climate and Resource Efficiency Task Force. He currently serves as Strategic Advisor on Corporate Responsibility and Sustainability, and Senior Associate at the law firm Frank Bold LLC.
Contributing Author Richard Howitt reflects on debates amongst global leaders, business and stakeholders in the most recent United Nations high-level meeting in New York.
Casting a Shadow
The war in Ukraine cast its shadow over everything and anything in this year’s high-level week at the United Nations, UNGA77.
Depending on the national accent, the acronym ‘UNGA’ can often be heard as ‘hunger’ in a week which traditionally reviews and renews calls to action on the seventeen Sustainable Development Goals (SDGs) for the world.
However in 2022, it has been heard as ‘anger’.
Always a platform for politician ‘walk-outs’ and ‘no-shows’ pandering to domestic audiences, news of civilian mobilization and of more nuclear saber-rattling from Russia gave the week a somber and – in many ways – unifying tone.
Moreover, as has been true for some years, business did turn up and its leaders did stay.
Impact on Renewables
The UN Global Compact led the way by focusing on what is the impact on the transition to renewable energy, given new and urgent concerns about energy security in a time of war.
Given that the UN typically shies away from issues of taxation, it was notable that Secretary-General Antonio Guterres used his speech to directly appeal for more levies on fossil fuel companies in the wake of the excess profits they are earning thanks to Russia’s restrictions on energy supplies.
Novozymes Chief Executive Ester Baiget used her contribution to call both for a regulatory framework to support the energy transition and to echo the loud voices calling for an end to fossil fuel subsidies altogether.
At the UN’s Private Engagement Forum of CEOs, International Labor Organization representative Guy Ryder praised a recently published seven point plan from the U.N’s Think Lab on Just Transition. He called for the social consequences of managed decline in the hydrocarbon sector to be fully addressed.
Tellingly, in a week when talk of danger was never very far away, Ryder called the document a “plan for peace.” It was a clever reminder to address the causes of conflict, not just its consequences.
Although climate action was not the headline topic, Secretary-General Guterres did convene a private meeting with world leaders to maintain the pressure for progress. The issue is not forgotten.
Conscience
But a second role for business in New York has been to act as the conscience for the long-term actions needed on climate and social action.
It is a misnomer that only business is hampered by short-term vision, which is as likely to afflict governments too.
When the traditional ‘Global Goals’ week, which accompanied the General Assembly this year, moved to the Middle East and the high profile stock-take on the SDGs was set for 2023, this was never going to be the critical year for assessing and making progress. The forthcoming COP27 in Egypt will also focus on best practice in implementation, rather than on assessing and ratcheting up climate goals.
Nevertheless, the subtext of the high-level week this year was certainly whether the world is remembering its own conscience for the long-term goals or whether it is being fatally distracted from the necessary actions to achieve them.
The latest Human Development Index report showing that social progress is going backwards in nine out of ten countries worldwide was a sobering start to the week. Climate activists were similarly pessimistic, predicting that when the Paris goals are formally assessed in the UN, the world will be falling a very long way short.
Nevertheless, the multiple events in the margins of the General Assembly continued to represent a vibrant and (at least partially) optimistic view about the global movements which its participants represent.
Corporate Accountability
From a business point of view, there were sure signs that the issue of ‘corporate accountability’ is slowly but remorselessly rising within UN deliberations.
This concept moves traditional debates about sustainability reporting and transparency into a new context. It is one in which business recognizes the need to take part in an active dialogue on its record in the context of stakeholder capitalism, with a duty to answer and to respond to societal demands and expectations.
“Corporations cannot be accountable only by answering to themselves,” was said by a high-level investor at one (Chatham House rules) event.
Two organizations led the way on this topic in New York.
Leading businesses representing the World Business Council on Sustainable Development held the next in their rolling programme of dialogues on how businesses can better define and answer whether their Net Zero targets and actions are genuinely aligned to the Paris goals. Science-based targets are already established as the way for companies to set these goals. But business’s own stock-take of how far it is achieving them remains yet to be fully defined. Watch this space.
Meanwhile, the World Benchmarking Alliance (WBA) has for some years ranked the world’s top companies for their contribution to the SDGs, employing open source methodologies and results. It explained to participants in New York this week that efforts for its work and for the contribution of business as a whole is to be integrated in assessments of SDG progress and as part of decision-making about the next steps.
Some confine this debate to one on metrics, indices and taxonomies, which are indeed critical and in which I am personally involved.
But this is equally a debate about wider questions of corporate purpose, innovation in how companies can act and – the WBA directly used the word – accountability for what companies do.
These are questions in which we should all be involved. I found the discussions some of the most insightful and exciting of the week.
Backlash
Finally, business representatives also came to New York recognising that one aspect of that accountability is already kicking in.
This was described by Marjella Lecourt-Alma, Chief Executive of a leading social and environmental data provider to companies, Datamaran, as “the ESG backlash”.
It concerns growing questioning of credibility in the huge growth in environmental, social, governance (ESG) products, services and investment funds, accusations of misselling in some instances and even of possible retrenchment whilst definitions, taxonomies and regulatory frameworks catch up the rapid rise of the sector.
Indeed this should not even be considered a sector, given authoritative forecasts that ESG investment will represent one-third of all global assets under management as soon as 2025.
As inflows to ESG funds continue apace after the invasion of Ukraine whilst traditional investment is retracting, just as happened in the period of COVID lockdowns, even the idea of retrenchment appears unlikely. Perhaps we should be talking about measured rather than untrammeled growth instead.
The ‘backlash’ also has a particular meaning within domestic debate inside the United States itself, where current proposals for climate disclosure by business already published in draft by the Securities and Exchange Commission (SEC) have been subject to hot political debate.
This is another issue where the detail is all-important, but where the wider context must not be lost in the crossfire.
When I put this very same question to Lecourt-Alma, she answered that corporate climate reporting had already reached the early majority in the United States, regulation would bring in the late majority and that we should not let the terms of the debate be set by those who will always be skeptics.
It is true that although it is the heat in the debate which dominates the reporting, eight out of the top ten U.S. investors have indicated their ‘in principle’ support for the proposals, whilst 80% of more than 6,000 letters submitted in the public comment period reflected that same level of support.
Like those countries cited in his speech by President Zelensky to the General Assembly by video from war-torn Ukraine, who chose to name and shame those countries who voted against him speaking as he was not able to be present in person, opponents in another context should also reflect on how they will be judged, now and in the future.
As UNGA high-level week drew to a close, it brought up that oft-asked question of whether global institutions – of governance or in business – can really reflect the genuine opinions and interests of the individual customers, savers and citizens who we all seek to serve at the most local level?
It is another question where there will always be skeptics, but where a week of debate and deliberation suggests that the world is not alone.In the words of the poet Amanda Gordon read out this week to those present, in business as well as government, this was a call “That you lead with love, in hours of hate.”