According to John Parkhouse, CEO and Senior Partner at PwC in Luxembourg, the ESG agenda is getting too vast for policymakers to implement on their own. He concludes that companies need to share the burden of necessary societal change, not only through dialogue, but also by making the right decisions.
Why is ESG important to you and PwC?
I have two children. I see not only the looming impact on their futures but also those of the broader youth of today. ESG – and especially the climate crisis – is really something that’s in our hands to do something about. But if we don’t, it will be too late. For me ESG for PwC in its broadest sense is about pushing us and our clients to understand how we can be (a small) part of solving the societal issues we face today. Inequality has never been so high and each year climate becomes an ever greater issue. In a nutshell, for companies it’s about building trust across your stakeholders by ensuring outcomes which are sustainable – in terms of the long-term impact on the business, the people and our planet.
In a nutshell, for companies it’s about building trust across your stakeholders by ensuring outcomes which are sustainable.
How are you helping others to make and deliver commitments?
We help companies appreciate the scale of what needs to be done on the ESG agenda. The burden of achieving societal change is too great to be left to policymakers alone: business has a real role that we need to drive. And that is not just in terms of a business dialogue but doing and being seen to do the right thing (i.e. getting the reporting right). In 2015-16 we began engaging with our stakeholders to see how we could contribute to their journey. We sought to address the question of how to make ESG something that is not just a compliance or a reporting issue, but something beneficial for the company and identifying how PwC can contribute value to our clients in that space. This is important for our clients because not only do we bring the technical expertise to help them, but we also bring the real life experience of how to really drive change across the organisation and the real challenges to embed sustainability into the core strategy of the company. Our experts are thus helping our clients to set the strategy, transform the business and ensure the reporting properly captures what is being done.
In five years, what do you see as the challenges and the opportunities?
For many of our clients, the current Covid situation is very difficult. They are seeing if they can get through these next few months, so thinking about diversity and saving the planet is just a pipe dream. In the longer term, we must confront the disconnect between the providers and the users of capital. There is a stark contrast between the financial services industry, which sees ESG both as a technical challenge and also as an opportunity, and then the real economy where the challenge is in some areas acute – but the opportunity is equally real for those ready to really transform. Overall, we see a convergence of pressure on all businesses – from capital providers, from clients and from their employees and future talent – which is in my mind unprecedented and as such I have huge confidence that business will step up and make the massive transformation that meaningful change will require.