Why it’s good practice to look at the big picture with ESG issues

It’s not just for the big end of town, Queensland’s top not-for-profit organisations say they also have to tackle a growing range of environmental, social, and corporate governance issues.

BDO boardroom lunch: Alan Smith (AEIOU), Susan Rix (AEIOU), Anthony White (BDO), Sharee Bartlett (BDO), Kevin Mercer (St Vincent de Paul Society), Fiona Harley (Guide Dogs Queensland) and Anthony Cross (Cancer Council). Picture: David Clark

GONE are the days when businesses concentrated solely on the bottom line.

Businesses of all sizes are increasingly being asked to take into account a range of environmental, social, and corporate governance (ESG) issues- from their carbon footprint and commitment to recycling to gender diversity and ethical investments.

Some of Queensland’s top not-for-profit organisations discussed rapidly evolving ESG requirements at a recent lunch hosted by BDO and The Courier-Mail.

The lunch heard that ESG generally includes social goals that go beyond the role of a company to maximise profits on behalf of shareholders. ESG had a slightly different role in the not-for-profit sector in that social goals were already a key objective.

Speakers at the lunch said that rising regulatory and legislative pressure to introduce ESG values would put pressure on organisations of all persuasions.

BDO partner Susan Rix, who serves on the boards of the AEIOU Foundation, Queensland Performing Arts Trust (QPAC) and the Queensland University of Technology, said organisations were being driven to introduce ESG measures by a range of stakeholders including student bodies and shareholders. “At QUT we are pressured by the student body when we are not seen to be doing the right thing,” Ms Rix says.

BDO boardroom lunch (L to R): Alan Smith (AEIOU), Susan Rix (AEIOU), Anthony White (BDO), Sharee Bartlett (BDO), Kevin Mercer (St Vincent de Paul Society), Fiona Harley (Guide Dogs Queensland) and Anthony Cross (Cancer Council). Picture: David Clark

She said charities meanwhile were being asked to focus on social values by donors and volunteers. “You don’t want to get to a situation where people don’t want to donate to you because you are not good corporate citizens,” she said.

On the corporate side, there was agitation from shareholders for companies to be good citizens. She added ESG had to become an organic part of an organisation and not become a bureaucratic burden. “We don’t want staff running around with clipboards all day,” she said.

Cancer Council chief financial officer Anthony Cross said big companies want to be perceived as better citizens, providing partnership opportunities for non-for-profit organisations. “They want to know how they can help out as part of their ESG commitments,” said Mr Cross.

BDO partner Sharee Bartlett said Australia was behind other countries in legislating EGS requirements but it would eventually come.

New Zealand last year became the first country to pass laws requiring banks, insurers and investment managers to report the impacts of climate change on their business.

About 200 of the largest financial firms in New Zealand, including banks with total assets of more than NZ$1bn ($718.90m), large insurers and equity and debt issuers listed on the country’s stock exchange will have to make disclosures.

St Vincent’s de Paul chief executive Kevin Mercer said his organisation was still working out how to lift its social impact.

“We have retail shops and we would be looking at how to increase the end of life of the clothes,” Mr Mercer said. “In our affordable housing projects maybe things like solar and waste management will play a role in reducing cost of living.”

Cancer Council’s Anthony Cross said more education was needed to determine what values non-for-profit organisations needed to take on board. “We have to look at taking it to the next level and what it is we want to achieve.” said Mr Cross.

Guide Dogs Queensland chief financial officer Fiona Harley said her organisation was working to incorporate ESG into national planning. “We don’t want to add more layers because our staff are already over burdened,” said Ms Harley.