TSBR has created the ‘World’s Most Future Ready Boards 2022’ ranking of the world's largest companies' environmental, social and governance (ESG) board preparedness. More than ever, boards of directors are under immense pressure from multiple stakeholders and shareholders to be resilient and able to respond to material sustainability issues. TSBR’s ranking highlights the global leaders, with a few surprises including one country’s businesses leading the way. They hope that this ranking will inspire and motivate other businesses to draw out valuable best practice and improve. The TSBR ranking approach uses a set of proprietary data points and has been reviewed by a panel of independent experts composed of Non-Executive Directors, corporate governance advisors and business educators. Live webinar on the 9th of March at 10 am ET / 3 pm GMT / 4 pm CET / 11 pm SGT In this launch event TSBR will provide a closer look at their approach to ranking and scoring, and share some best practice (15 minutes). This will be followed by a panel discussion between 4 influential independent directors and educators, to discuss ways to implement more sustainability consciousness and competence in the boardroom (45 minutes). Interested individuals can sign-up for the webinar here. About TSBR The Sustainability Board Report is an independent not-for-profit project. ​TSBR aims to showcase different dimensions of sustainable business leadership and corporate governance. By drawing out best practice, their reports also help individual leaders, organisations, and investors to understand the changing landscape of ESG preparedness, consciousness, and competence. Contact Details Helena Gudjonsdottir, Project Manager, helena.gudjonsdottir@boardreport.org Frederik Otto, Founder & Business Advisor, frederik.otto@boardreport.org Interested parties can request a media kit.

In this episode we speak with Helle Bank Jørgensen about her 30-year journey in sustainable business, her current work as CEO of Competent Boards, and what personally drives her. We also discuss her new book ‘Stewards of the Future’ and current boardroom issues. At the end Helle shares a story about a particular leader that had a big impact on her, as well as her enduring connection to the legacy of that person. Find our more about Competent Boards here. Listen to the episode here: Apple Podcast Spotify Soundcloud About Helle Bank Jørgensen: Helle Bank Jorgensen is an internationally recognised expert on sustainable business practices, with a 30-year record of turning environmental, social, and governance (ESG) risks into innovative and profitable business opportunities. She works with many global Fortune 500 board members and executives, as well as smaller companies and investors. Helle is the founder and chief executive of Competent Boards, which offers online climate and ESG programs that draw on the experience of over 150 renowned board members, executives, and investors. Hundreds of directors and senior executives have enrolled in these programs to mitigate the risks and seize the opportunities presented by ESG and climate change. About 'Leadership Conversations by TSBR' Leadership Conversations is a podcast by The Sustainability Board Report (TSBR), an independent not-for-profit project. We aim to showcase different dimensions of sustainable business leadership and corporate governance. In this podcast we interview global leaders who advocate for more positive societal impact and responsible business. Leadership Conversations is hosted by Frederik Otto and Helena Guðjónsdóttir.

In this episode we speak with Joseph Kenner, the president and CEO of the Greyston Bakery and Foundation, a trailblazing B Corporation and pioneers of the Open Hiring movement. Joe shares how everyone has something to contribute to society and demonstrates how a business can play an important role in providing economic opportunity to marginalised communities. Greyston aims to build a world where individuals are defined by their potential, rather than their circumstances. Find out more about Greyston: https://www.greyston.org/ Listen to the episode here: Apple Spotify Soundcloud About Joe Kenner Joe Kenner was named president and CEO of Greyston in April 2020. Kenner previously served as deputy commissioner at the Westchester County (NY) Department of Social Services, and spent 14 years in corporate America, working in insurance underwriting/risk management, capital markets, and sales strategy. He was first appointed and then twice-elected a Village of Port Chester (NY) Board of Trustee member, and also served as Deputy Mayor of Port Chester. As leader of one of the country’s most well-known social enterprises, Joe frequently shares his expertise on purpose-driven business, and building a more inclusive economy through employment, workforce development, and social services. He serves on the Board of Directors of Conscious Capitalism, Inc., the Mid-Hudson Regional Economic Development Council, the New York City Workforce Investment Board, the B-Team, and is an Advisory Council member of the REDF Impact Investing Fund (RIIF). He has been featured in a variety of local and national media, including Bloomberg, CNBC, Yahoo Finance, Forbes, USA Today, The Wall Street Journal, Quartz and The Journal News. About 'Leadership Conversations by TSBR' Leadership Conversations is a podcast by The Sustainability Board Report (TSBR), an independent not-for-profit project. We aim to showcase different dimensions of sustainable business leadership and corporate governance. In this podcast we interview global leaders who advocate for more positive societal impact and responsible business. Leadership Conversations is hosted by Frederik Otto and Helena Guðjónsdóttir.

In this episode of 'Leadership Conversations by TSBR' we speak with Ravi Chaudhry, leadership guru and a much sought-after mentor and counsellor. Ravi's singular focus is to foster a new edifice of responsible leadership and responsible entrepreneurship. It was incredibly insightful to learn about Ravi’s life mission to promote sustainable leadership and discuss how institutions need to take responsibility as participants in society. Ravi takes us through his concept of taking a 720° view and changing the way we think. We also explore the leap forward from Corporate Social Responsibility (CSR) to Socially Responsible Corporations (SRC). Listen to it here: Apple Podcasts Spotify Soundcloud About Ravi Chaudhry Ravi Chaudhry is a much sought-after mentor and counsellor, with singular focus to foster a new edifice of responsible leadership and responsible entrepreneurship. Ravi is a business strategy consultant, mentor to CEOs and corporate Boards and an author. He is a Fellow of World Business Academy, a network of global thought leaders and public intellectuals that represent some of the best and brightest men and women shaping today's global landscape. Ravi is the founder Chairman of CeNext Consulting and Investment Pvt Ltd, New Delhi, a firm that advises corporations, governments and non-profits on Re-inventing Strategy to cope with Emerging Complexities. His clients include Fortune 1000 corporations, UN Organizations and Governments of Switzerland, Turkey, Brazil, Norway, Uganda, Austria and Canada. Earlier, he was CEO/Chairman of four companies in Tata Group, India. He is a mechanical engineer with specialization in business strategy and has worked with clients in over twenty five countries on Strategy Audit & Re-alignment to bridge the gap between performance and potential. To know more about Mr. Chaudhry visit his website www.ravichaudhry.com About 'Leadership Conversations by TSBR' Leadership Conversations is a podcast by The Sustainability Board Report (TSBR), an independent not-for-profit project. We aim to showcase different dimensions of sustainable business leadership and corporate governance. In this podcast we interview global leaders who advocate for more positive societal impact and responsible business. Leadership Conversations is hosted by Frederik Otto and Helena Guðjónsdóttir.

This is article is a guest contribution by Fiona Donnelly, Director, Red Links Sustainability Consortium, and Kevin Bowers, Partner, bowers.law. They explain how the need for directors to give appropriate consideration to environmental, social and governance (ESG) issues is not a matter of choice – it’s an integral part of being a board member. The stewardship role and responsibilities of board members are built into the very structure of how companies are established. That is, board members take care of the assets on behalf of, and are accountable for their actions regarding a corporate vehicle to, the owners of that corporate – the shareholders. This responsibility to act in the best interests of another person or entity is a fiduciary duty. Fiduciary duties and ESG This means that, as part of their fiduciary duties, directors have a responsibility for material ESG issues – to ensure these risks are tracked, that opportunities are maximised and that value creation areas are optimised. Directors who fail to comprehensively and systematically consider ESG matters could well be deemed to be negligent in the performance of their fiduciary duties. This may not be welcomed by ESG naysayers, who often see sustainability as a cost and a ‘nice to have’. But owners require, and increasingly stakeholders expect, organisations to look broadly and take a long-term and responsible perspective on the holistic sustainability of the enterprise. Financial success, whether in the short, medium or long term, is now only one measure that matters. A surprising feature of the corporate world today is the widespread lack of awareness and understanding of the ESG risks and opportunities relevant to organisations like cybersecurity and existential megatrends such as climate change. The ferocity and frequency of extreme weather events is well documented and understood, but many companies have not undertaken an evaluation of the business-specific climate impacts of this trend and factored them into business decisions. It could be that board members of these companies could be found to be in breach of their fiduciary duties just in terms of this element of ESG alone. Mind the fiduciary duties gap Setting fiduciary duties aside, integrating ESG into business strategy is increasingly recognised as sound risk management and essential for the long-term success of businesses. There are more and more proof points that ESG does not come with a performance penalty – often it comes with multiple quantitative and qualitative upsides, including reputational gains, better staff retention and engagement, lower costs of capital and overhead savings. As noted in one recent BlackRock Investment Institute research analysis, ‘[sustainability] substitutions have little impact on the portfolio’s diversification or risk/return properties, strengthening our conviction that ESG integration is a “why not?” proposition’ (see ‘Online links’). Board members are also individually and personally motivated to give ESG appropriate consideration, looking beyond fiduciary duties. Executive compensation is increasingly under scrutiny. There is a growing trend to align executive pay to performance and long-term strategy in order to protect and create value. Including metrics relating to material ESG matters in executive pay decisions can help incentivise the achievement of sustainable business goals and show the conviction with which an enterprise is trying to achieve certain ESG outcomes. While this area is tricky when it comes to execution – issues include which ESG areas are relevant for a business and incentivise only the right strategic decisions, how to set and measure targets and over which timeframe – the principles can be straightforward. Businesses that properly integrate ESG will have material sustainability issues built into the core of the business, so structuring compensation in this way should not be a stretch. Directors’ duties With changes having been made to Hong Kong’s Companies Ordinance in 2014, company directors are being held to higher levels of personal accountability, responsibility and liability. The Hong Kong Companies Registry Guide on Directors’ Duties (see ‘Online links’) identifies the following broad principles (of which all Hong Kong directors should make it their business to be familiar): to act in good faith for the benefit of the company as a whole to use their powers for a proper purpose for the benefit of the members as a whole not to delegate powers except with proper authorisation and retaining a duty to exercise independent judgement to exercise care, skill and diligence to avoid conflicts between personal interests and the interests of the company not to enter into transactions in which directors have an interest except in compliance with the requirements of the law not to gain advantage from their positions as directors not to make unauthorised use of the company’s property or information not to accept personal benefit from third parties conferred because of their positions as directors to observe the company’s articles of association and resolutions, and to keep proper books of account. The fourth principle in this list is the most pertinent in terms of boards of directors devising and implementing ESG policies and procedures. The exercise of the directors’ care, skill and diligence is subject to both objective and subjective legal tests: the objective test relates to the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company, and the subjective test relates to the general knowledge, skill and experience that the individual director has. The subjective element of this directors’ duty means that when directors are appointed to the board due to their special knowledge, skill or experience, they have a higher standard of care. Thus, when a company appoints a director to oversee its ESG policies and procedures, that person should be sufficiently qualified for the role and must then perform that function up to at least the standard of that individual’s qualifications. Essentially, the ESG director should have experience in ESG issues, so this function should not just be delegated to a random member of the board! Furthermore, in a world where sustainability and ESG issues should be at the forefront of corporate decision-making, directors now have personal exposure if they allow their companies to operate without ESG policies and procedures, and without giving specific directors the role to oversee the ESG function. ESG and crisis management In extreme cases, if ESG matters go significantly awry, executives have been known to lose their positions. The pressure from shareholders among others led to the chief executive and two senior executives of Rio Tinto (see ‘Online links’) stepping down following the destruction of historically significant Juukan Gorge rock shelters and the way it managed its response. There was no way they could rebuild trust and confidence following their spectacular governance failure that saw this labyrinth of caves, which were thousands of years old, being irreparably damaged for the expansion of an iron ore mine. Even once those who have been held responsible have departed an entity, the new board then has to start the process of rebuilding reputation and trust in the brand and with the organisations’ various stakeholders, itself a lengthy, fragile and costly process. The role of governance professionals Governance professionals are clearly crucial to directors’ complying with their fiduciary duties. As a way to reflect on the appropriateness of board fiduciary behaviours towards ESG, governance professionals may want to reflect on the following questions. Are directors appropriately familiar with ESG matters that are material to the business, particularly in terms of strategy, policy, issues and activities? Is the board taking a forward-looking approach to ESG oversight, in particular by tracking emerging issues? Is the ESG risk/opportunity tracking appropriately holistic and based on an appropriate timeframe? Are ESG matters delegated to appropriately knowledgeable individuals who are held to account? When it comes to communicating and engaging with shareholders and broader stakeholders, are ESG matters shared to an appropriate level of detail? SIDEBAR: An aside – fiduciary duty and investment managers The UN Principles for Responsible Investment and UN Environment Programme Finance Initiative undertook a multi-stakeholder and multi-jurisdiction research, development and engagement exercise around fiduciary duties in the asset management industry. This entire project set out to end the ongoing debate on whether fiduciary duty is a legitimate barrier to the integration of ESG issues in investment practices and decision-making. The first report – issued in 2014 – found that ‘failure to consider all long-term investment value drivers, including ESG issues, is a failure of fiduciary duty’. It was replaced by the second report, Fiduciary Duty in the 21st Century, issued in 2019. This asserts that the conceptual debate around whether ESG issues are a requirement of investor duties and obligations is now over, and the fiduciary duties of investors require them to incorporate ESG into investment analysis and decision-making processes. More information is available at UNPRI ONLINE LINKS www.blackrock.com/corporate/insights/blackrock-investment-institute/publications/esg-fixed-income www.cr.gov.hk/en/companies_ordinance/docs/Guide_DirDuties-e.pdf www.riotinto.com/news/inquiry-into-juukan-gorge This article was first published in CSj, the monthly journal of The Hong Kong Institute of Chartered Secretaries, in June 2021. External links are included for readers’ convenience. The inclusion of these sources is neither an endorsement of that provider nor intended to provide readers with any assurance as to the completeness or accuracy of the particular article linked. This content is for general information purposes only. It should not be used as a substitute for consultation with professional advisors. ABOUT THE AUTHORS Fiona Donnelly Fiona leads the Red Links Sustainability Consortium which comprises some of the most experienced financially-minded, sustainability and business professionals in Hong Kong, with the goal of developing responsible business through strategy, engagement and sustainability services. Fiona is a renowned versatile operator with more than 25 years of experience in professional services in Hong Kong. She has been engaged in a wide variety of projects and long-term in-house advisory contracts with issuers, governments, academia and start-ups with a particular focus in sustainability, ESG and cleantech since 2007. Kevin Bowers Kevin is a Partner at bowers.law. He is a dual-qualified lawyer in England & Wales and Hong Kong and has practiced as a commercial disputes lawyer and partner with three leading independent Hong Kong law firms over the last twenty years. Kevin specialises in commercial, insurance and employment litigation and dispute resolution both in Hong Kong and internationally. He handles complex multi-jurisdictional commercial cases involving debt recovery, sale of goods, trade finance, media law, fraud, shareholder, joint venture, employment, property (including land rights disputes and building management / tenancy issues) and franchise disputes, contentious family/probate/trusts, asset tracing, injunction proceedings, jurisdictional challenges, public inquiries and judicial reviews.

In this episode we speak with Rachael De Renzy Channer. Racheal leads Egon Zehnder’s Sustainability Practice and shares with us interesting details from a recent leadership survey with the Financial Times. We discuss her journey and how it has influenced her view on what it means to be a leader today, from her many years spent in the military to her passion in finding and developing great leaders today. Listen to it here: Apple Podcasts Spotify Soundcloud About Rachael De Renzy Channer: Rachael is part of the Industrial Practice Group in London and Leads Egon Zehnder’s Sustainability Practice. She is an active member of the London Board Practice and also specialises in executive search and leadership solutions with a focus on manufacturing and business service industry sectors. Rachael spent twelve years in the Army, having commissioned from the Royal Military Academy Sandhurst into the Royal Artillery. A large part of her military career was spent focussing on leadership and development. Rachael retired from the Army with the rank of Major and joined Invensys Plc as part of a new Corporate Security team, before moving into the Corporate Strategy function. She subsequently moved into the Schneider Electric UK & Ireland business as Head of Strategy Implementation. Prior to joining Egon Zehnder, Rachael led Strategy at Avon Rubber – leading Artis their Material Consultancy business with a focus on driving increased sustainability through innovative technology. About Leadership Conversations: Leadership Conversations is a podcast by The Sustainability Board Report (TSBR), an independent not-for-profit project. We aim to showcase different dimensions of sustainable business leadership and corporate governance. In this podcast we interview global leaders who advocate for more positive societal impact and responsible business. Leadership Conversations is hosted by Frederik Otto and Helena Guðjónsdóttir.

In this episode of Leadership Conversations we speak with Andrew Winston, who was named to the 2021 Thinkers50 list of top 50 management thinkers. Andrew is one of the most widely read and published writers on sustainability. We discuss Andrew's career, how it has led him to his mission of helping companies build a thriving world, his thoughts on responsible leadership, and his newest book written with Paul Polman "Net Positive: How Courageous Companies Thrive by Giving More Than They Take". Listen to the podcast here: Apple Podcasts Spotify Soundcloud About Andrew Winston: Andrew Winston is a globally recognised expert on megatrends and how to build companies that thrive by serving the world. Named to Thinkers50 list of the top management thinkers in the world, he is the author of the bestsellers Green to Gold, The Big Pivot, and most recently, Net Positive: How Courageous Companies Thrive by Giving More than They Take (co-authored with renowned CEO Paul Polman), which is one of Financial Times’ Best Business Books of the Year. Andrew received degrees in economics, business, and environmental management from Princeton, Columbia, and Yale. About Leadership Conversations: Leadership Conversations is a podcast by The Sustainability Board Report (TSBR), an independent not-for-profit project. We aim to showcase different dimensions of sustainable business leadership and corporate governance. In this podcast we interview global leaders who advocate for more positive societal impact and responsible business. Leadership Conversations is hosted by Frederik Otto and Helena Guðjónsdóttir.

In our first episode of 'Leadership Conversations' we speak with Halla Tómasdóttir, CEO of The B Team. Halla shares her personal leadership journey and pivotal moments along the way. She also talks about the work of The B Team, and shares some inspiring stories of leaders that embrace more responsible business. Listen to it here: Apple Podcasts Spotify Soundcloud About Halla Tómasdóttir: Halla is the CEO of The B Team, a group of courageous business and civil society leaders working together to transform business for a better world. Halla started her leadership career in corporate America working for Mars and Pepsi Cola. She was on the founding team of Reykjavík University where she established the Executive Education Department, founded and led a successful women’s entrepreneurship and empowerment initiative and was an assistant professor at the Business School. She was the first female CEO of the Iceland Chamber of Commerce and later went on to co-found an investment firm with the vision to incorporate feminine values into finance. The company successfully survived the infamous economic meltdown in Iceland. In 2016 Halla was an independent candidate for the President of Iceland. She entered a crowded field of candidates and finished as the runner-up with nearly 30 percent of the vote. About Leadership Conversations: Leadership Conversations is a podcast by The Sustainability Board Report (TSBR), an independent not-for-profit project. We aim to showcase different dimensions of sustainable business leadership and corporate governance. In this podcast we interview global leaders who advocate for more positive societal impact and responsible business. Leadership Conversations is hosted by Frederik Otto and Helena Guðjónsdóttir.

Our founder, Frederik Otto features on the Diligent Corporate Directors Podcast. You can listen to to it here: Apple Podcasts Spotify Stitcher On this episode of The Corporate Director Podcast, hear from Frederik Otto, founder and business advisor of the Sustainability Board Report, discuss the importance of sustainable corporate leadership and the future of sustainability. Frederik also dives into some research findings around sustainable board practices.

Frederik Otto, the founder of The Sustainability Board Report, wrote an article and recorded a video for Ethical Boardroom dissecting our most recent report on 'Sustainable Business Leadership in 2030': https://ethicalboard.foleon.com/issue23/ebissue232021/the-sustainability-board-report-tsbr/

Our first (virtual) roundtable's theme was on The Future of Sustainable Business Leadership. We decided on this more generic headline to complement our recently published scenario report: Sustainable Business Leadership in 2030. The report showcases four different scenarios of factors and actors shaping the future of sustainable business. We invited three speakers: Helle Bank Jorgensen, CEO of Competent Boards and Senior Advisor to The Sustainability Board Report (TSBR), Meredith Sumpter, CEO of The Council for Inclusive Capitalism and Mike Rosenberg, Professor of the Practice of Management at IESE. The event started with the speakers giving insights to their own work, followed by their assessment of factors that might shape sustainable business leadership in the future. Examples ranged from entire systems changing to more inclusive forms of capitalism, over the necessity for more thorough governance and the need to plan for the future well in advance, and not deal with sustainability issues as they arise. The first half of the meeting also included brief case studies of specific challenges and how leaders are ought to tackle those. One speaker gave an example of a corporate board of directors that would not see the financial benefits of changing an entire car fleet to electric vehicles, although an executive made a compelling case of positive long-term effects. All speakers gave a general sentiment that it is important for leaders to have sufficient ESG competence. The second half was an interactive dialogue where all participants had the opportunity to post comments or questions. One participant was interested whether the entire board of directors need to have explicit ESG competence, or if certain specialised directors would be sufficient to drive a material sustainability strategy/agenda. One speaker answered that it is time to start looking at ESG as being critical to future proof at least parts of the board. That is, as a minimum on the sustainability committees. The speaker cited the findings of The Sustainability Board Report 2020 that found that only 17% of directors who serve on sustainability committees have ESG credentials/competence. "Once this number is improved one can look at cascading this knowledge to other board members outside of a dedicated committee". It was also outlined that the board as a whole should have a general understanding of ESG issues. "Capital markets will respond negatively to boards that insufficiently deal with material sustainability issues, as this is increasingly seen as a fiduciary matter." Another participant asked about the dynamics of asset managers pressuring companies through ESG activism and generally scrutinise boards more. One speaker responded that this is very much a trend and the money manager community has increased voting for shareholder proposals that concern ESG and/or sustainability issues and risks. Another speaker was certain that this is a growing concern for boards as they see asset managers being more involved. Overall, the meeting was filled with a lively discussion, especially around the state of ESG in businesses and their ecosystems- One participant commented on the changing role of stock exchanges and index providers driving a stricter ESG narrative with their clients, which will be interesting to follow. There was a sentiment of all actors around the corporate environment needing to care about sustainability more than ever, and with immediate effect. As a last point, one of the speakers suggested that the conversation must be driven from the top and it needs individual leaders championing for change, but eventually sustainability advocacy should spread throughout the entire company. A final comment was by another speaker to one of the participants, who wondered how to best implement an ESG strategy within their business. It was suggested to gather the senior leadership team and discuss how all leaders can drive a sustainable strategy forward and align behind a common purpose.

We sat down virtually with Andrew Kassoy of B Lab – the nonprofit behind the B Corp movement - to get his scenario of sustainable business leadership in 2030 and his vision of what it takes to get there. This interview was conducted as part of our interview series with leaders whose input led to the development of the four scenarios. TSBR: What do you believe sustainable business leadership will look like in 2030? AK: I believe the core of sustainable business leadership in 2030 will be stakeholder governance. I think 2030 is an excellent date to pick, because there is a set of concrete sustainability goals (UN SDGs) to which business needs to be a major contributor. It is hard for me to imagine business being a contributor to meeting those goals, and therefore being sustainable, without stakeholder governance. This means that companies are accountable for creating value for their stakeholders by considering systemic issues like inequality and climate change. If businesses are not accountable for those issues through a form of governance, then it will simply be an exercise in disclosure, reporting or marketing that will not enable us to actually achieve those sustainable development goals by 2030. People tend to focus only on the role of business to drive stakeholder capitalism, but we need a similar and aligned change in the fiduciary duties of investors. Business is so driven by the behaviour of capital markets that I don’t see that we will have sustainable business leadership unless it is aligned with the interests of investors. TSBR: How important do you think frameworks like the UN SDGs are going to be in driving sustainable business leadership? Do you think ESG frameworks are essential to use, and what potential risks do you think come with them? AK: That is why I am so focused on stakeholder governance. I think there are a couple of issues with the way many people think about ESG. One of them is that many people see ESG as a reporting exercise. They focus on transparency and reporting, but the information in itself is not helpful unless it is a result of action taken. A challenge with data and reporting is that it has driven many people to a compromise where there cannot be any trade offs. The compromise is to report on certain ESG things that are financially material. Which is nice, but there are plenty of externalities businesses create that, if they internalised these things, they would be less profitable, at least in the short term. So, part of creating corporate stakeholder governance, where companies are actually accountable for considering these factors, is that they would have to do something about the externalities they create that are not necessarily financially material, but are societally or systemically material. TSBR: Expanding on your notion of stakeholder governance, can you pinpoint certain stakeholder groups who will get us there? Those that exercise pressure on the business. AK: There are a number of groups that could get us there, probably in combination. One is employees of companies – they are increasingly demanding of their leaders. In the war for talent, companies will have to satisfy their workers if they want to be successful. Second, there is an increasing number of long-term investors who recognise, either because of their values or because they have long-term financial interests, that they need the companies they invest in to be more sustainable. They recognise that, because they are universal owners, most of their returns are attributed to the performance of the whole economy – and an entire market does not perform how an individual company does. TSBR: Do you think we will see more proactive governmental regulation, or will we see more regulation as the result of business inaction on sustainability issues? AK: I think it is going to be some of each. Obviously, there are many attempts to regulate the individual behaviour of all kinds of businesses, like minimum wages or carbon tax. But there is also a strong movement of people who recognise that we need a higher floor on the expectations of business. We need to change their fiduciary duties, and we need to address the legal idea that has been perverted over time that the duty of the directors of organisations is to maximise value for their shareholders. That is both a cultural and a legal problem, and I think government is not going to fix the cultural problem – they will try to fix the legal problem. For example, in the UK, a new law was proposed called the ‘better business act’, which would make all companies in the UK responsible for considering the interest of their stakeholders, and for their systemic impacts. What is important is that it needs to be explicit in law. Other than a few heroic leaders, you cannot expect individual companies to make changes that go much beyond financial materiality. TSBR: Talking about ‘heroic’ leaders – In an organisational context what is the role or who is the person, or system, driving change? AK: I think those dynamics are changing in a sense that there is just increasing pressure on CEOs from all of these different stakeholders to make significant changes. Often CEOs are not that well equipped, because these kinds of ideas are not institutionalised in the business. Obviously, culture matters too. When I think about systems change, there is no one thing that has to change - it’s multiple. Cultural change is about changing the narrative, but if the rules are contrary to the narrative, then all that is going to happen is ‘greenwashing’. I cofounded and lead B Lab, a network of organisations stewarding the B Corp movement, which is all about economic systems change and creating a community of credible leaders (B Corps) who show that they can do business in a different way. They set an example for others to follow. People think in stories and narratives, so when they see those examples, they want to follow. If change is institutionalised because we have changed the rules so that the board has to act in a fundamentally different way with everybody keeping an eye on them; and the investors in the company have a different set of fiduciary duties requiring the board to act in a different way; and they have to report on it so their performance is transparent; then you don’t have to rely on any one leader. You have a system that is functioning differently. In the end, I don’t see a scenario where much changes without that.