The world is entering a new and fourth revolution, one we’re calling the ‘Sustainability Movement’. The word ‘sustainability’ consists of three pillars - Environmental, Social and Governance, or ESG. These pillars are interlinked, the delivery of one can’t realise authentic outcomes without the incorporation of the others.
Today, consumer demand already shows investors, customers, talent and the public have a growing expectation for businesses to deliver value in a way that responds to society’s needs, values and issues across the ESG pillars. Those businesses that do are tapping and expanding into new and existing markets, reducing operating costs and helping to attract and retain talent
1.
Revolutions throughout history
When referring to a revolution, we are speaking about defining movements that can affect change across economic, technological, political and social spectrums. Let’s quickly review three key revolutions throughout our history that have progressed civilisation:
- The first was the ‘Agricultural Revolution’ that led numerous cultures and lifestyles from hunting and gathering to one of agriculture and settlement. It brought on the establishment of towns, food-crop cultivation, deforestation, domestication of animals and rapid population growth.
- To keep up with the demands of our growing population, the world evolved from hand-based production to machine based, bringing on the ‘Industrial Revolution’. This period saw fast expansion of machine-based production, tools, chemical manufacturing and energy use (steam and water).
- Modernising industrial methods then saw us transition to the ‘Digital Revolution’, as we went from analogue, electric and mechanical devices to digital technology. The change provided us with the internet, digital computers, digital record keeping, mobile devices and the current era in which we live.
Across these revolutions and to this day, our global population growth continues. With advancements in medical treatments and medications our population also continues to live longer.
Reviewing the trends across the three previous revolutions show us civilisation were triggered to evolve, that they had to take on new methods to keep up with the demands of a growing population.
However, the methods of keeping up with civilisation’s demands has resulted in consuming natural resources faster than what we could replenish. These practices have largely contributed to environmental damage, climate change and social issues.
The fourth revolution embraces addressing these issues, to once again evolve civilisation into its next chapter.
ESG and COVID-19
The COVID-19 pandemic in 2020 created a global crisis that
catapulted businesses to rapidly evolve to keep operating. This was seen with large work forces quickly transitioning to working remotely, businesses taking up new technologies and delivering innovative ways for customers to continue to access their goods and services.
These transitions are evidence that society can rapidly evolve and change when needed. Additionally, it has resulted in the world being rushed through the remaining years of the digital revolution, by fully embracing, integrating and operating with the use of digital technology.
Another insight from the pandemic showed that investing in ESG did not slow during the pandemic, instead it increased. Morgan Stanley Institute for Sustainable Investing research
2 showed that investment in ESG portfolios during the pandemic, outperformed non-ESG portfolios. This demonstrates businesses do not see ESG as a financial burden in times of crisis, rather that ESG is a way forward for their business to evolve and build resilience into the future. Again showing, we can evolve and adapt rapidly.
Adapting to the Sustainability Movement
Changing is hard and can seem overwhelming. But the question we should be asking is, “If we don’t start now, will it be too late?”
We can already see through the investment in ESG during the COVID-19 pandemic that businesses are starting now, no doubt recognising what happens when you’re too slow to evolve with a new movement. Blockbuster, Kodak, Xerox, Nokia and Myspace are examples of companies that didn’t evolve fast enough during the digital revolution. They were quickly replaced by countless streaming services, social media platforms, cloud based filing and electronic signatures to name a few.
Change can start at any scale; the important part is commencing and recognising there are countless benefits to incorporating ESG in how you do business.
The Findex Group Sustainability Movement
We have already made some great inroads across the environmental, social and governance pillars in the Findex Group. COVID-19 accelerated our adoption of digital tools when dealing with clients which resulted in paper reduction across multiple service lines by 50-60%. We have implemented a broad range of policies to govern the way we do business and interact with our clients as a good corporate citizen.
In 2018, to reduce our carbon emissions and the costs of meeting our energy needs, we invested $92,000 for solar installations at our regional offices in Cairns, Inverell and Forbes. This pilot has resulted in around 120 tonnes of CO2 being saved per annum.
Building on our strong ESG foundations we developed our first
Sustainability Strategy and
Carbon Neutral Strategy during FY22, which both commenced on 1 July 2022.
Our Sustainability Strategy involved extensive consultation with our people and stakeholders ensuring we focus our efforts where we can make an impact. Our Carbon Neutral Strategy was developed aligned to the latest climate science and the call to action of reducing carbon emissions by 1.5-degrees by 2030.
Both strategies demonstrate us embracing the sustainability movement, and we are excited to be a part of it.
The Fourth Revolution has started, so when are you joining?
For more information about our Sustainability Strategy, please
visit the website or
get in touch with one of our team members.
References:
1 https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/five-ways-that-esg-creates-value
2 ‘
Sustainable Funds Outperform Peers in 2020 During Coronavirus’ – Morgan Stanley.