Foreword by Eivind Lorgen

The sustainable economy will demand bold leaders.


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Eivind Lorgen

Eivind Lorgen

Sustainability Accounting Standards Board (SASB)
Chair Investor Advisory Group 
Former CEO & President Nordea Asset Management, North America

Leadership and bravery have not always been synonymous, but today’s C-suite executives will need both attributes to thrive in the emerging sustainable, shared economy. Only bold leaders will be able to steer their companies through the big shift from a carbon-based society to a renewable, sustainable economy. Nowhere is this more pertinent than in the industries that are responsible for the bulk of global greenhouse emissions, such as real estate, transportation, industrials and agriculture.

Alongside climate action, our leaders also need to push forward major changes in US corporate culture. They must keep Diversity, Equity and Inclusion in sharp focus to create fairer opportunities for all. Investing into the most important capital—Human Capital—will strengthen our fragile infrastructure and create a stronger foundation for the new shared, sustainable economy.

Several leading US companies are excellent role models in sustainable leadership. They are integrating material ESG considerations throughout their operations to improve both financial success and sustainability performance. And they are replacing self-serving ESG marketing statements with robust ESG reporting and disclosures-based metrics, frameworks and standards. This is a significant step forward. But there is an urgent need for more US companies to follow suit.

I believe that we are past the point where the US can rely on voluntary corporate sustainability reporting. As we have seen in Europe, consistent and comparable ESG metrics are a critical first step in the transition to sustainable business. I would welcome the SEC to push forward a similar legal-regulatory corporate ESG-disclosure regime to help move the needle on sustainability across the United States.

It took nearly 80 years to develop the financial accounting and reporting standards we use today to reliably compare company performance. The good news is that it will not take another 75 years to develop robust global sustainability accounting standards—the newly formed International Sustainability Standards Board (ISSB) seeks to consolidate many of the existing frameworks, including the Sustainability Accounting Standards Board (SASB) and Climate Disclosure Standards Board (CDSB). The ISSB will develop a comprehensive global baseline of high-quality sustainability disclosure standards framed around financial materiality. The new standards will improve the understanding of company performance on the ESG issues most relevant to long-term enterprise value creation—or destruction.

My hope is that, within five years, our C-suite leaders will have combined financial and sustainability metrics into a holistic accounting framework that shareholders, bond holders, regulators and other key stakeholders will use to make investment decisions. Capital will be increasingly allocated solely to profitable sustainable-business models with compelling investment returns. And these companies will only create products and services that have a positive impact on our society and the wider world. This is the definition of stakeholder capitalism.

It gives me great pleasure to recommend Russell Reynolds Associates’ latest study, Divides and Dividends: Leadership Actions for a More Sustainable Future. As it clearly identifies, the US is on the right path, but we still have a long journey ahead. To catch up with other markets around the world, we need more executives to embrace bold leadership and advance global decarbonization, climate-resiliency efforts and organizational equality in a radical way. The world is impatient for change—and rightly so. The market leaders of tomorrow will be those that grasp this opportunity with both hands.



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