Aaron Perry


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Stewardship & Sustainability Series
Episode 20 - Christine Robinson - Deloitte & Touche, Sustainability Services Group

Christine Robinson, CPA – Deloitte & Touche Sustainability Services Practice Group, discusses the growing momentum and deepening of sustainability practices in the corporate world as investors and consumers demand greater environmental stewardship and social responsibility from companies. In this emerging Age of Transparency, Christine advises that opportunities abound for the forward-leading companies, and risks are increasing for those that don’t yet understand the market trends. Directors, CFOs, and other Executive Leaders are increasingly recognizing these risks and opportunities, and the global marketplace is being transformed as a result. Taking care of land, water, and people is increasingly smart business, and leaders are being rewarded.


(Automatically generated transcript for search engine optimization and reference purposes – grammatical and spelling errors may exist.)

Welcome to the YonEarth Communities Stewardship and Sustainability Podcast Series.

Today I’m so happy and excited that we are speaking with Christine Robinson from Deloitte

High Christine. Hey Aaron, how are you? Great, how you doing? Good. So Christine is with a she is the

Senior Manager in the Sustainability Services Practice Group at Deloitte and she helps

companies with their sustainability reporting initiatives to drive value and help build a brighter

future. For some of you who may not be completely familiar with this means, environmental social

and governance or ESG risks continue to move up on the board agenda as shareholders, regulators,

employees and consumers increase pressure on companies to demonstrate responsible governance

around these risks and address those operational and reputational concerns that can have a

material impact on the long-term sustainability and financial performance of a company. And what’s

so interesting to me Christine is that as we’re building and developing our understanding of

sustainability as a community generally speaking and broadly speaking where you’re positioned

working with all these different companies in the economy you have a very interesting and

particular view of what’s happening. And I thought I might start by asking what from your

perspective what is driving the corporate sustainability agenda right now? Well that’s a really

good questionnaire and there’s a lot of things I think most notably right now it’s investors,

investors are increasingly relying on sustainability information in their decision making

processes. They’ve voiced frustration by the lack of consistent comparable disclosure.

There’s a number of investors that have the specific impact investing funds or other

sustainability related investment funds and that trend is growing. We’ve also seen pressure

from shareholders that may not own a direct share but own through like an exchange-traded fund or

some funds similar to that where they’ll use their proxy vote as a way to voice their opinion

and their concerns within a company’s ESG performance. We see particularly a lot of attention given

to the ESG Raiders out there so like MSCI’s, it’s the analytics, ISS, CSR Hub. These are organizations

that are taking companies environmental and social performance and governance practices

and basically putting out a report card on companies so that they have there’s ratings out there

and companies can be compared to one another and I think it really gives the attention of a lot

of executives because I’m not sure that many realize that that’s out there and then all of a sudden

they become aware of oh hey some of these putting a report card out on my company but I got to know

what that is and what’s the grounds for that score. We see a lot of companies also getting

questions from their customers. Supply Chain is a very, very vast and broad thing and

companies now are looking for more transparency in their supply chains and so customers are

putting the pressure on. Particularly I would say you get a lot by the in the way of European

companies where they are they’re a little bit more advanced in this space because it’s been

something that’s been reported and companies have been doing it for longer there and so they’re

just a bit more mature I would say and now they’re really raising the bar in terms of

setting expectations for their customers and what they expect in terms of environmental

social governance performance and also see you know the trends they I think you’ve probably heard

a lot about the millennials and the Gen Z generation that as consumers their their buying habits are

a lot different than the generations before them and the studies of the surveys have showed that

millennials are aligning their their purchasing power and their buying habits to their environmental

and social beliefs too and so that’s that’s a more I would say more consumer facing companies feel

that pressure and then lastly I would I’m going to throw out regulation certainly here in the US

any sort of strict regulation might be off the table with the current administration but you see

states like California that are that have moved in the direction of regulation for environmental

reasons also I think it’s significantly in the EU the European Union’s non-financial reporting

directive that recently went into effect that requires certain companies to report this information

so it’s there’s a lot of there’s a lot of drivers in this space and I think I think you could ask

a lot of companies that are doing it and you might find the various degree of answers in terms of

you know why they’re doing it or how they’re doing it but at this point I think it’s really these

are business issues that companies have to face and more and more that’s being recognized and

companies don’t want to be caught flat-footed when when looking at the risks and opportunities

that relate to these topics yeah it’s so interesting I think it’s such an exciting time to be

alive and to be able to witness this this transformation that’s occurring and you know one of the things

I end up thinking often about and in talking some about is that sustainability really isn’t only

about us choosing to do good relative to our communities relative to the environment and so forth

but it is increasingly becoming a question of competitive advantage oh for sure

idea of industries right and as consumers are putting more and more pressure on as you’re

describing as we’re entering this age of increasing transparency I am just so thrilled to know that

there is rapid transformation underway and I’m curious you’re working with some of the

largest companies in the world many midsize mid cap companies what what does that look like from

your vantage point right now that’s a good question I would say it looks a lot a lot a lot like

the Wild West as I said absent any regulation anywhere outside of the the EU’s regulation

companies at this point right now in terms of reporting and disclosure can do really whatever they want

I mean there’s no there’s no regulation in terms of what they have to report and how they have to

report it there is and there has been existing sustainability reporting standards the global

reporting initiative or the GRI is probably the the longest standing one I think they they’ve been

around since the early 90s and it’s the most widely used set of standards globally used by many

companies I think there’s a statistic out there that says at least in the US 85% of the S&P 500

issue is sustainability report the majority of those reports are in accordance with the GRI standard

additionally the just this month yeah we’re still we’re still in November the sustainability

accounting standards board just codified their standards and they’re they’re a they’re a bit

different from GRI so GRI standards are applicable to a very broad stakeholder group investors

customers consumers shareholders employees non-governmental organizations and they’re not they’re not

necessarily industry specific so SAVB I think it was starting in about 2012 undertook this mission

to develop industry specific standards on the premise of financial materiality and you know with

with with the idea in mind that these issues affect companies in a in a different manner for

example I always like to use the automotive industry as an example because when you when you talk

about GHG emissions the biggest yeah greenhouse gas emissions the biggest impact for automotive

companies in particular is the use phase emissions so you and I driving around in our in our car

versus a different manufacturer where they’re not their product is different and doesn’t

doesn’t have the use phase emissions that automobiles do the SAVB standards contemplate that

the SAVB standards are specific to investors they’re based on the concept of financial materiality

and so by disclosing these industry specific standards investors have a way to connect the ESG to

the financial statements a little bit more directly and kind of look at well what is financially

material that’s really interesting well you know I don’t have to ask I should mention to your

comment about it’s November so it’s November while recording but this may likely

I guess December of 2018 so speaking of time travel I am struck when I’m building financial

models for consulting clients and sometimes even educating and tutoring business students around

accounting this is a very particular system you know thanks to the renaissance Italian merchant

years ago and it’s it’s a system that has evolved to be very sophisticated very specific in its

application which is now really used worldwide and it’s it was developed initially and it has been

used for centuries for financial reporting and accounting specifically and has not been designed

to take into account these other things we would consider such as impacts on social well-being

impacts on environmental ecological services so on and so forth and I have to ask you as you being a

CPA how does this leave you after investing you know years and years in learning this sophisticated

language and system how does this leave you feeling and thinking as the endeavor now is to

incorporate more information that is outside of the the financial system strictly speaking no that’s

another another great question and really you know if you look at the evolution of

financial accounting it was an evolution and I think that’s what this is too you know you have

this is information that’s out there in the public domain and I always I always tell people that

I really I spent eight years in the financial statement audit practice within delight before

moving into sustainability and I always I look back on that time and I kind of take for granted

my role as the auditor because the systems were so established and the financial accounting rules

are so established and there’s socks 404 and controls and you know everything was just very

mature and robust and then you come into sustainability where you have companies with the ability

to disclose whatever they want whenever they want however they want you know there’s for example

there’s even companies out there that they don’t report in accordance with GRI or SASB they’ll

make up their own definition and report that definition um and and that’s okay as long as

the consumer of that information has that definition um but I but I still think and you know maybe

this is the the auditor in me coming out and and shining um that because this information is

relied upon in the marketplace that it’s it just speaks to the case for assurance and you know

putting in place companies putting in place those credible reporting processes and in controls

specific to this subject matter and engaging their financial statement auditor to perform assurance

on this information it’s I think critical um in terms of where the market is that right now there are

many companies that do seek assurance on uh maybe I would say more so specific key performance

indicators like most notably greenhouse gas emissions but not necessarily everything that they’re

reporting or their sustainability report as a whole and I think as this as this space

matures and the reporting matures and the disclosure matures then we’ll see the assurance of that

follow as well yeah it’s really interesting to hear that perspective and

one of the things I’m struck by in your earlier comment is the uh incredible

disparity that we’re seeing state-to-state here in the United States with respect to regulation

standard and expectations and it leaves me wondering you know on the on the one hand many of

these issues are related to risk obviously and on the other hand many of these issues are related

to competitive advantage and economic development and it leaves me thinking that you know in some of

the region some of the states that are not really uh leading that are not really being proactive

around these issues they’re doing a double disservice to their communities potentially where on

the one hand they’re not addressing some of these risks we’re facing as robustly as they could

be and on the other hand they’re not driving the innovation in the uh laying the groundwork for

the competitive advantage in the eventual economic development that will ensue and I’m just

curious if as as you’re looking at different firms all around the country if you get a sense that

uh we’re we’re really seeing a situation where the ingredients for success over time are much

more heavily concentrated in certain areas and less so in other areas. There’s there’s definitely

um I’d say an appetite for innovation and that’s where I think the companies that are doing

this whole space this whole sustainability thing the ones that are doing it really right

are the ones that are the innovators and the ones that are are able to take a take a a downturn in

the economy and gain market share or um do do some really cool things in research and development

and change their products such that it’s it’s it’s somehow gained game changing for the industry

there they um there’s a TED talk and it’s kind of it’s a few years probably at least 10 years old

now uh Ray Anderson the CEO of Interface Carpets did this TED talk it was called the business

business logic for sustainability and in the TED talk he he takes takes you through the journey

of the companies sustainability thinking and at one point in the TED talk it pulls up a chart

and shows um the economy and how the economy was moving and there was this little dip in the economy

and I think it was around 2000 but how his company was actually able to gain market share during

that time because of the way that they innovated their product and um the sustainability trends

that they paid attention to and and the things that they did in that respect um I think this is

going to be huge in the next 10 years the inner inner governmental panel on climate change just

issued a report about a month or two ago now and basically it said that this climate change is

worse than we thought and we’re going to start seeing the impacts of climate change and a lot

sooner than we thought so I think that I think they mentioned like 2030 versus I think the previous

reports were 2040 or 2050 um but you know then you start thinking and you know I’m like gosh well

I’m I’m going to be around in 2030 and and my kids will definitely be around in 2030 and

uh I think I think once businesses start but maybe paying attention to that a little bit more

they’re going to recognize it’s a little bit more sudden than than expected and you know kind of

anticipating that through scenario analysis and risk planning um it’s going to give them a leg up

when when we do start seeing real um real climate change affecting our day-to-day lives and yes

yeah and I think you know some of our friends who have experienced uh coastal flooding and massive

forest fires might already be uh feeling some of the early right of this climate change and certainly

the the scientific community seems to be pointing in that direction as well and uh you know I’m so

happy you you mentioned that uh that yeah kids and I love that in addition to uh being a sustainability

professional a CPA and accountant you’re also a mom and uh you have two young children

and I’m curious as you’re you know working by day with all of these different companies that are

in varying stages of addressing and incorporating these sustainability values and standards uh when

you when you get home uh what is what is that like for you and how do you see some of the sustainability

opportunities or challenges even the on the home front well I’ll say this I’ve already

apologized to both of my sons um because the challenges that they’ll face uh in their adult

life in particular are much different than the challenges that you know I face as an adult

particular when you know we they start seeing the impacts of climate change and you know that

leading to food scarcity and things and things like that and I and I as a parent just

have innate anxiety about that and and hope that they will have the answer um I’ve also started

to brainwash them if you will if you ask my son my five-year-old son what water is he’ll tell you

it’s a scarce natural resource um and then I you know I just try in our everyday lives to to do

things and so that they’re normal to my kids for example um both of my both of my boys that were

in cloth diapers um we shovel our driveway instead of using a snow blower and in southeastern

Wisconsin that’s quite a feat um just just earlier this week I was I was out in my driveway for

four hours with the shovel after after a snowstorm but um we also have hobbies like I’m a beekeeper

uh so a couple of bee hives with my brother and have like have done uh gotten him into that and

and my mom and so that’s a nice uh family activity and something I I feel strongly about um I have

my kids you know all of this to my kids is just something that’s that they’ve grown up with and

something that’s normal and I recognize that society will start changing them the more and more

that they are out of my purview and into like school when when they spend so much time with school

and their friends and so I’m trying now while they’re really really young to put my influence on them

that this is something that’s super important and something that they’re gonna they’re gonna be

challenged with as as they grow into adults so yes well it’s so it’s so wonderful how proactive

you’re being with them and that you’re not only on the one hand teaching them about uh things like

water fresh water being a scarce and precious resource on the other hand you’re demonstrating

ways that we can be proactive in our own homes our own yards our own neighborhoods and of course

with the YonEarth Community we are increasingly doing work all around the country uh with some of

the very hopeful activities we can do such as soil building which really can help to reverse the

climate change trends really help to stabilize climate by sequestering carbon in my sincere hope

is that our kids and all of us in the next several years and decades are gonna engage deeply in

some of these restorative and regenerative practices and my sense is that we’ll see companies

small meeting in large increasingly engaging in some of these community activities as a way

to market and advertise and you know live streaming media has become very big and i’m just

I’m thrilled to think that we can really mobilize so much hope and the business community can take

such a strong leadership position around all of this and as we’re facing these challenges they can

be overwhelming and daunting there yeah there are you know to that point there are so many

companies out there that do a lot and and make a really big impact and unfortunately they don’t

they don’t tell that story they don’t say that and and that’s i feel one of the really cool parts

of my job is i get to go into into all of these different companies and all of these in different

industries and i get to hear about everything they’re doing and it and it really gives me

makes me feel optimistic in a in a time when it’s very easy not to be optimistic um it’s just

some of the cool things that are being done and the cool things that exist out there and how they’re

how they’re innovating and what they’re doing to address you know challenges like soil degradation

and erosion and anything um waste and um so that’s it’s really refreshing um so there’s

but there’s a lot more that i think that’s being done that’s just not out there in in in the public and

um i wish i wish companies would some would sometimes tell tell those really cool stories um but

you know i my sense is that we might be seeing a whole lot more of that and i often joke with my

media partner artim nicocaw from earth coast productions about how sometimes the uh the letters

cso stand for chief sustainability officer and sometimes they stand for chief streaming officer

we we talk often about how we’re seeing this convergence where companies of all sizes can

increasingly share these stories tell these stories and of course that’s very potent in

social media it’s very potent in some of the new ways of marketing and advertising and messaging

and uh my goodness that could be such a potent additional way to mobilize this kind of

positive action in our communities all over and uh that gives me hope yeah and i think you’ll

see that you know you’ve got the millennial generation now getting older and sort of creeping

their way into upper management and this is just this is just the millennial thinking and this is

how they do business and that’s that’s different from previous generations and so i definitely think

those um those facets of of their lives is going to be it’s going to be really apparent when you

you start seeing them as CEOs and and executives and board members you know the board plays a huge

role in this and um i would say a lot of boards might be a bit skeptical at first but just as

isn’t anything i think once you learn more uh the subject matter and in in what this is all about it

it just the dollars and cents just makes sense absolutely i i want to pick up your comment about the

boards and ask you about a recent article you co-authored before uh asking that question though

i just want to mention to our audience that uh this is the why on earth communities stewardship

and sustainability podcast series and today we are speaking with Christine Robinson uh cpa

accountant and sustainability senior manager at Deloitte and uh for those of you who might like to

check out some of our audio book and ebook resources uh at yonearth.org be sure to use the code

podcast to get a discount on those and uh you might just uh think about getting something like

that in time for the holidays we think this uh this particular episode will be airing in early

December so um that’s a great opportunity for you and you know we are talking about sustainability

as it appears in the realm of accounting and in the corporate world and uh Christine you

co-authored this article which is called why sustainability is a board level risk uh this was in the

FO journal part of the Wall Street journal back in uh july of 2018 and it was it was such a compelling

presentation of some of this information where uh this really is not a kind of side optional

consideration for boards any longer this is now a central uh and increasingly important

concern for boards on companies of all sizes and i’m i’m curious how has the uh the reception

been to this this article so far what are you hearing from your clients and your colleagues

um i it’s it’s gotten tremendous attention actually um i think the you know oftentimes we

we think about companies as what’s in the four walls and what’s inside and and that often

doesn’t that doesn’t extend to the board um but they play a critical role um is more and more

particularly and if where we are in in this world in terms of climate change the the measurement

and disclosure of sustainability risks are our key and boards can help provide insight on how

companies can integrate this thinking in in and address the stakeholder expectations as i

mentioned when you know the first question you asked me of what’s driving the corporate agenda

investors are are clamoring for this information and so the board really the board really does have

an important role in in helping to direct the company in how they’re thinking long term

about these risks and opportunities um the there’s there’s just a number of in sustainability

in and of itself is a very broad a very broad topic um and so that sometimes makes it difficult

for for boards to hone in on specific expertise you know like some some companies may have water

issues others that may be emissions or something more labor or social related and so sometimes

that’s a little difficult for boards to maintain that expertise but it’s important whether the board

is is staying up to date internally or you know seeking the the help of a third party um that they have

that they have authority and um connect with the company’s executives on uh the go forward strategy

address these risks obviously for many of the these companies to be able to hire a an advisor

in consultant like yourself is a significant part of the strategy there i’m wondering are there other

resources organizations institutions that you look to or even sometimes suggest to your your

clients as uh great sources of information and resources yeah i um i always like to refer

back to the standards so checking out the global reporting initiative uh the sustainability

accounting standards board um there’s a number of different a number of other different

organizations that um are on the forefront of this space but i always like to go back to the standards

because that ultimately drives what’s reported and what then or it should drive what the

market’s reported um and so that’s what the information is then being consumed um so i always like

to start there and that also might be the CPA in me it’s just going back to the state yeah well

that makes sense to me i mean there’s a a solid foundation there right to work off of and build from

um that makes a lot of sense i uh can’t help but ask as we’re uh getting ready to to wind up our

discussion today so we’ve got the holidays coming up and uh do you have do you have anything fun

planned with the kids will you guys be getting outside or but you’ll probably have some snow right

yes um my my kids are are snow lovers and so like we just had a a blizzard a couple of days ago

and it was all they could do to to get out the door fast enough and and get in the snow and so

i put a shovel in their hand because like i said we shovel our time

even my even my one and a half year old like he doesn’t really help shovel

he more anti helps shoveling um ways but um no we just we just enjoyed the outdoors and so skiing

and in the wintertime especially skiing and sledding um they’re at that age where

anytime you’re going fast somehow is fun um so yes and get the crash when there’s snow

between us yeah yeah yeah flooding quickly turns into who can who can crash the best right yeah

that sounds fun but you know in the future and in our kids futures golly my hope is that we are

able to mobilize the solutions the strategies that will allow us to stabilize climate and and

allow our kids our grandkids to experience things like skiing and and playing in the snow in

the future and so i hope so i really i really hope so and you know what that’s that’s why i do what

i do is to try and have an impact and and you know i i look at it this way i as uh as a human being

on the surf i i can make my own impacts and do my own things and but as part of my job and working

with companies like to the extent that um i can help them make a bigger impact than i can make

individually um i hope that’s making about our future for my kids it’s a very powerful

um way to act uh through our connections with the companies and organizations that we’re

that we’re working with and working for and i it leaves me wondering you know a lot of the last

couple decades has a considerable amount of greenwashing in this arena and it sounds like talking

with you and in our our phone call the other day preparing for this discussion

it sounds like you’ve experienced you’ve seen a transition where we we see less and less superficial

greenwashing and more and more meaningful substantive action being taken and i was hoping you

could reflect on that with us and that might be a nice way to leave with a with a hopeful and

positive tone with some of these challenging issues that we’re facing yeah no that’s that’s a

that’s a great point you know i think i think a lot of this started off you know years and years

ago with the greenwashing sentiment where it could be a marketing you know purely marketing and now

companies are are really seeing the value and in grounding their their sustainability strategy

and materiality so first looking at what what is what is the most important things for my business

to be addressing if i ask an external stakeholder if i’m looking at investors or customers or

employees or whomever and then also you know analyzing where does my business have the biggest

impacts is it in water is it in waste and in filtering those to identify where you have the

most impact and what’s most important to stakeholders it’s just such a key part of of any

sustainability strategy and i think companies are doing it more and more and and we see

now that focus on materiality and and that’s really that’s really the essence and the foundation

of a credible program and doing it the right way and with intention and and and being able to

to make an impact well that is so wonderful and and so hope filled and uh

Christine i want to thank you for joining us in this discussion today it’s been such a pleasure

visiting with you and i hope you and your family have a wonderful holiday season

yeah thank you so much Aaron i really appreciate the opportunity and and happy holidays to you

and your family as well great thanks Christine.

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