Key Takeaways from the 2023 RBC Capital Markets Global ESG Conference

By Lindsay Patrick
Published April 6, 2023 | 3 min read

Our third annual Global ESG Conference took place amid a global environment marked by macroeconomic uncertainty and geopolitical and financial market volatility. 

Our third annual Global ESG Conference took place amid a global environment marked by macroeconomic uncertainty and geopolitical and financial market volatility. While many speakers acknowledged that the external environment had grown increasingly complex over the past year, there was broad agreement that short-term headwinds had not led to a shift in focus away from long-term sustainability priorities. Rather, we found that global industry leaders, subject matter experts, and management teams across a variety of industries had embraced an increasingly pragmatic, authentic, and transparent approach. Speakers shared a broad appreciation of the range of ESG factors driving value and risk for organizations; over the course of the two-day conference, sessions focused on cybersecurity, leadership and human capital, governance, climate change, biodiversity, and impact capital underscored the importance of taking a holistic approach to the management of ESG-related risks and opportunities.


Here are the top five takeaways from this year’s conference:


ESG as a Source of Opportunity and Innovation

Every session at this year’s conference featured tangible examples that illustrated how the integration of sustainability considerations in strategy and operations can advance opportunities for value creation, from regenerative farming practices to healthcare services for underserved populations to battery storage solutions. In the opening session of the conference, George Serafeim, Professor of Business Administration at Harvard Business School, framed a company’s sustainability journey as a “maturity curve” wherein companies move from a risk mitigation mindset towards one of growth and innovation. Serafeim observed that the greatest opportunities for value creation come about when organizations approach sustainability through a lens of growth and opportunity, developing products and services that provide solutions to address unmet needs in the marketplace.


Focus on Financial Materiality and an Inclusionary Approach to Sustainable Investing

The importance of focusing on industry-specific sustainability issues that have a material financial impact was a common theme across many sessions. Several investors underscored the importance of understanding company-specific paths to decarbonization, focusing engagement on the specific issues that can serve to improve business fundamentals. Others voiced support for a continued shift away from exclusionary and divestment-led methods, citing the risk of assets ending up in private hands and therefore subject to less institutional oversight. Reflecting on the leadership shown by many incumbents in the energy sector with regards to the technological solutions needed for decarbonization, one investor advocated for a shift toward a “best-in-progress” mindset rather than a “best-in-class” approach.


The Role of Data and Technology in Managing ESG-Related Risks and Opportunities

The transformational role of data and technology in the context of advancing ESG-related objectives was another theme that came up throughout the conference. Lesley Carhart, Director of Incident Response for North America at industrial cybersecurity company Dragos, described the practical steps that investors can take to assess a company’s vulnerability to cybersecurity risks, including asking questions about business continuity and incident response plans, the frequency of drills and tabletop exercises, and the extent of internal understanding with regards to network architecture and assets. David Craig, Co-Chair of the Taskforce for Nature-related Financial Disclosures (TNFD), reflected on the immense amount of data available on both climate and natural systems and highlighted the TNFD’s efforts to reduce the amount of complexity inherent in nature by creating a tool that can be adopted by financial markets. Other speakers noted the transformational role of advanced technology – for example, using geospatial imaging to help monitor deforestation or computer vision to detect soil degradation – in creating new opportunities to measure and manage nature- and climate-related dynamics in a way that is significantly less costly and resource-intensive than in the past.


The Importance of Human Capital, Diversity of Thought, and Committed Leadership

While quantifying performance against human capital indicators was noted as a challenge by several speakers – one panelist described human capital as “the greatest unpriced risk in the market” and another cited the challenges associated with measuring inclusion – there was broad agreement that a strong culture, diversity of thought, and aligned incentives are of critical importance. Equally, “tone from the top” and leadership committed to integrating ESG considerations into strategy and operations were also highlighted as key success factors. Whether in the form of a constructive and communicative relationship between a company’s cybersecurity and executive management teams, or the foundational role of a CEO in crafting the mandate of an internal venture capital fund, it was clear that leadership on sustainability-related issues is a competitive differentiator.


The Power of Collective Action: We All Have a Role to Play

The theme of collective action was woven throughout the conference, with speakers highlighting the power of both individuals and corporations in effecting change. Katharine Hayhoe, Chief Scientist at the Nature Conservancy, provided tangible examples of the actions that individuals and organizations can take to reduce their carbon footprint. Noting that “action is contagious”, Hayhoe emphasized the importance of talking about these efforts. Many speakers described the transition to net-zero as one of the most significant economic opportunities in the decades ahead and highlighted the impact of effective government policy on accelerating decarbonization. One speaker noted that while the U.S. Inflation Reduction Act will not change his firm’s investment process, it has widened the aperture of investable opportunities by improving the economic attractiveness of certain prospects. Reflecting on “carrot vs. stick” approaches across various jurisdictions, Dave McKay, President and CEO of RBC, noted the significant benefits of the incentive model in accelerating capital flows to clean-tech solutions.

Lindsay Patrick

Lindsay Patrick
Head, Strategic Initiatives and ESG

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