Strategic Doing and CONNECTS – Doing More Together

In today’s world, collaboration is essential to meet the complex challenges we face. This requires collaboration of multiple stakeholders and experts at different levels and in different configurations. Successful collaboration needs enabling technologies such as the CONNECTS platform and collaborative capabilities such as Strategic Doing.

Strategic Doing teaches people how to form collaborations quickly, move them toward measurable outcomes and make adjustments along the way. Strategic Doing has developed over more than two decades of work with people trying to strengthen their organizations, communities, and regions. The Strategic Doing Institute, based in the University of North Alabama, USA has trained more than 2000 practitioners from around the world.

In October 2022, the Strategic Doing Practitioners Learners Community was launched on CONNECTS. Inside the community we run weekly Strategic Doing Talks, hosted by Ed Morrison – founder and director of the Strategic Doing Institute. Each week Ed has a conversation with one of the current Strategic Doing Practitioners, workshop leaders and fellows about their experiences in applying Strategic Doing in their organisations and communities. For upcoming talks click on the link.

Starting on the 31St of January Ed Morrison will be delivering a series of Strategic Doing Masterclasses on CONNECTS to provide participants with practical skills for designing and guiding ecosystems. In each Masterclass Ed will be focussing on a particular type of complex challenge in a particular type of organisation, industry, or community. To participate click on the link.

Watch the space for upcoming masterclass topics:

  • First steps with deploying Strategic Doing: The role of core teams
  • Understanding collaboration: A process of recombinant innovation
  • Developing your skills as an agile leader: A new career pathway
  • Ecosystems for regions: Designing and guiding regional innovation ecosystems
  • Entrepreneurial ecosystems: How to design launch, and guide them
  • Solving complex corporate challenges with an ecosystem: The case of Lockheed and condition-based maintenance
  • Powering Open Innovation with Strategic Doing: Framing the innovation challenge with a question
  • Deploying Strategic Doing at a large scale: Conducting strategy workshops with hundreds of people
  • Pathfinder Projects: Understanding the engine of Strategic Doing
  • How to develop trust, the fuel of collaboration: Where to start
  • A short course in why Strategic Doing works: The key scholarly research
  • Bringing Strategic Doing into your HR function: Where to start, how to scale
  • Understanding our civic economy: Collaborations to support the market economy

The ESG Call-To-Action

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The ESG

ESG is the new business acronym of the moment, used by more and more CEOs and entrepreneurs in Europe and beyond. The E stands for Environment; The company’s contribution to eradicate climate change and the impact on the environment. The S stands for Social; The company’s respect for human rights as well as its relationship with the community. The G stands for Governance; The company’s leadership strategy, ethical management, policies, and processes in place.

Why is important?

The focus on ESG is driven by the need to transition to a world that is climate neutral by 2050, the business opportunities and risks this brings and by regulatory pressures from the EU and other policy makers. A key piece of legislation that was adopted by the EU at end the end of 2022 is the Corporate Sustainability Reporting Directive (CSRD). Just like for other policy areas in the past the EU sets the de facto global standard other regions and countries follow. What GDPR has become for data privacy, CSRD is expected to become for sustainability reporting. Failure to comply will mean big fines for large companies that will be obliged to submit their annual ESG reports starting with their fiscal year 2024.

Who will be affected by these measures?


This will not only affect large companies, meeting 2 or more of the following 3 criteria; having more than 250 employees, more than 40 million Euros turnover or more than 20 million Euros total assets. By 2028 companies of all sizes will be required to report their ESG impact. Starting in 2024 and in many cases today smaller companies will be asked by their clients and stakeholders about their ESG data already. A key part of CSRD is the requirement for companies to report not only on their own direct ESG impact but on the impact of their entire value chain, their so-called Scope 3. This includes many smaller companies and represents on average between 75% and 80% of their total impact.

So, time to get started today!

How to find out more about it?

CONNECTS, together with partners Grant Thornton Belgium and BECI, the Brussels Chamber of Commerce have launched the ESG Countdown community in which we run a series of 10 webinars to help companies go through all the steps that will help them prepare their first ESG report: The ESG journey. On the 14th of February we will be running the 6th webinar, a deep dive into Governance Materiality. Every webinar is a mix of theory and testimonials from companies that have already started their ESG journey. At the end of each session there is ample time for participants to ask questions to the speakers and ESG experts. The video recordings and copies of the presentations of the previous 5 steps in the ESG journey can be found in the ESG Countdown community libraries. Click the link to join the ESG Countdown community and sign up for our next webinar.

The role of renewable energies in the energy transition

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During the last few years we have seen that renewable energies are playing an increasingly important role. There is a growing concern for the environment and the quest to reduce CO2 emissions. This has been accentuated by the increasing scarcity of primary fuel sources, especially related to oil after the crisis caused by the war in Ukraine, which has made gaining independence from Russia one of the main objectives of the scenario

Types of energy

For this reason, new renewable energy sources are becoming increasingly present and are positioned as a possible alternative source to fossil fuels. At present, the most important are wind energy, which comes from wind, and photovoltaic, which is based on the use of solar radiation. However, other sources of energy that are among the main sources of renewable energy are hydropower, driven by the force of water through rivers or freshwater streams, biomass, obtained from organic matter, and sourced from the high temperatures contained in the earth’s core.

UE objectives

Currently 20% of our energy supply is renewable, which is twice as much as in 2004, but still a figure to be increased. The EU plans for renewable energy sources to provide 32% of our energy, although it has recently been stated that this figure is to be increased to 45%. This will also include a reduction in the use of fossil fuels and the implementation of renewable energy projects. 

Measures

Another of the measures being promoted is the transformation of the automobile market. By 2035, fuel cars and hybrids will no longer be allowed, and all cars sold from that year onwards will no longer be allowed to emit pollutants into the atmosphere. In addition, for small households and small businesses, the EU’s Social Climate Fund aims to reduce energy taxes and charges, as well as to promote the creation of urban spaces that are more respectful of new forms of consumption.

Invitation to our event

In conclusion, we could say that recent events have been the incentive for more and more sustainable and clean energy development. Connects is organising a series of webinars that aim to achieve the EU’s ambitious green transition goals. On the 20th of December we will organise an event that will focus on environmental issues with speakers who are experts in the field, so we invite you to attend!

CONNECTS Overview of Events 2022

ESG – three letters that will change the world

ESG (environmental, social and governance) is a generic term used in capital markets and commonly used by investors to evaluate the behaviour of companies, as well as determining their future financial performance. Most socially responsible investors check companies out using ESG criteria to screen investments. So it is no surprise that the number of investment funds that incorporate ESG factors has been growing rapidly since the beginning of this decade, and is expected to continue rising significantly over the decade to come.

ESG is not just for investors there is a strong political will in Europe for ESG in Europe continues to grow much of it centred around regulation. European countries are moving ahead with plans to transform ESG. They want to move it from being a broad, sometimes chaotic, and confusing set of principles to a concise collection of standards – easy to follow and report on.

Europe’s latest ESG initiative is the Sustainable Finance Disclosures Regulation (SFDR) which came into force in 2021 and is aimed at increasing transparency, reducing greenwashing and strengthen the integrity of the sustainable investment product market. Although the SFDR is not without its critics, it requires asset managers to disclose how their activities connect with ESG values. The SFDR will be joined by the Corporate Sustainability Reporting Directive CSRD from 2024 and this means that in the future almost 50,000 companies in the EU will have to comply with detailed standards for sustainability reporting, significantly more than the 11,000 companies subject to the current requirements. The European Commission proposes the development of standards for large companies and separate, proportionate standards for SMEs that non-listed SMEs can apply voluntarily.

ESG is here to stay but these are early days and so it is a developing concept surrounded by acronyms, articles, taxonomies and new vocabulary. For the layman, and possibly for many SMEs, the whole process just looks too complicated, and one is not sure where to start. That is why CONNECTS have been organising webinars in 2022 to explore the concept and are collaborating with Grant Thornton and BECI – the Belgian Chamber of Commerce and the Union of Enterprises in Brussels to provide a set of webinars that provide a step-by-step guide to ESG via the Countdown to ESG series of webinars.

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All the 2022 CONNECTS webinars provide information about ESG, testimonials and case studies and advice on how to build an ESG strategy. All companies from multinationals now and SMEs to come will need an awareness of ESG regulations and reporting and thus will need to develop a strategy relevant for their company and sector.

This is where the CONNECTS platform – a B2B collaboration platform – provides access to information and partners through a 21st century model embracing a business ecosystem approach which recognises the increasing shift from shareholder to stakeholder capitalism.

The summary of the webinars below illustrates the range of high-level and expert speakers, from a variety of countries (Belgium, Ireland, Poland, United States, UK, France, Germany, etc.) and the topics covered in 2022.

Summary of the webinars

21st Feb ESG timelines and roadmap: challenges and opportunities in 2022 
With a keynote address by Katie Power, Policy Coordinator in the Cabinet of Commissioner Mairead McGuinness, DG FISMA Sustainable Finance | European Commission (europa.eu) and the participation of expert speakers, the webinar recapped the key initiatives implemented in recent years and focus on future initiatives and their target communities envisaged in 2022. 
Katie Power noted the Corporate Sustainability Reporting Directive CSRD – EU Corporate Sustainability Reporting Directive – esg.tech would place financial and non-financial reporting on same footing and had an aim of providing a level playing field for all large companies meeting two of the following three criteria: the company has €40 million in net turnover; the company reports at least €20 million on its balance sheet and the company has at least 250 employees. 
Katie Power also mentioned the EU Taxonomy which is a classification system, establishing a list of environmentally sustainable economic activities. It will play an important role helping the EU scale up sustainable investment and implement the European green deal. 
The EU taxonomy EU taxonomy for sustainable activities (europa.eu)  would provide companies, investors and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable. In this way, it should create security for investors, protect private investors from greenwashing, help companies to become more climate-friendly, mitigate market fragmentation and help shift investments where they are most needed.
She also mentioned the EU’s Platform on Sustainable Finance Platform on Sustainable Finance (europa.eu) which provided input to the ‘S’ in ESG. 
Responding Anne Van den Bergh, Director of Sustainability of the Ageas Group (a leading insurance company in Belgium) noted that sustainability is a driving force for value and not just an add-on. Sustainability is becoming a ‘licence to operate’ and is driving a  new business ecosystem.
James Kiernan, Director of Relationship Management, Chambers Ireland, noted that the Chambers were specifically engaging in five SDGs THE 17 GOALS | Sustainable Development (un.org). The benefits for the organisation included brand reputation, marketing, staff attraction and retention and efficiency. However, more information was needed on the importance of sustainability and that is why they had organised a Sustainable Business Council delivering sustainable impact awards Chambers Ireland Website along with an SDG toolkit to encourage engagement. 
Franc Bogovic – Deputy CEO of finance&invest.brussels SA, an experienced entrepreneur and former management consultant, stressed the increasing importance of ‘sustainable  investment’ combining social and environmental aspects with a financial return. This means an analysis of financial criteria with non-financial criteria.  
6th AprilESG as a business opportunity through digital transformation
This event focused on the letter S – for society. The webinar was organized in a close collaboration with three organisations:– AKFI, a US based industry consortium providing companies with Digital Transformation and ESG knowledge,- CONNECTS, the online platform building a safe online B2B and B4B (business helping business) ecosystem with business opportunities and development services, based in Brussels- Future Processing, a software development and tech consultancy company that has been solving business problems with technology since 2000.
Therese Baptiste, a former UN Ambassador and WTO Permanent Representative for her home country, now lectures and coaches university students on topics such as Global Challenges, International Strategy, and Intercultural Communications. Therese argued that digital transformation also needs organisational change which should include a social component involving workforce health and an awareness of the culture of the organisation. Companies should examine their supply chains to make sure they were ethical and shift from ‘profit’ but what ‘type of profit’. 
Krzysztof Szabelski, is Head of Technology at the Polish software company Future Processing. Software is a powerful tool but you have to do it right. This involves a clear strategy, validation and delivery. Building software is like building an invisible house. 
Manuel Vexler, Executive Director for AKFI (Actionable Knowledge Foundational Institute), a non-profit organisation bridging the divide between Digital Transformation and ESG. Manuel noted that we also need to understand ESG in shifting historical industry phases: steam – a place-based activity, electricity – widening industrial development, computing and now what we might term smart digital transformation which initially were designed in a non-circular process – raw materials, design, manufacturing, digital and disposal. We now need to examine how ESG is integrated into what we now term Industry 4.0 and the shift to Industry 5.0 which goes beyond efficiency and productivity as the sole goals, and reinforces the role and the contribution of industry to society, placing the wellbeing of the worker at the centre of the production process and using new technologies to provide prosperity beyond jobs and growth while respecting the production limits of the planet.
Gene Okun is a co-founder of a Fintech organisation www.sustcoscore.com, an ESG Sustainability Ratings Agency for Public Companies and e-commerce site providing SUSTCO Score reports for investors SUSTCO | Measuring Sustainability (sustcoscore.com). The SUSTCO Score was launched 2021 and recognised the increasing interest of ESG within professionally managed assets. SUSTCO Scores provide companies with a set of metrics which can provide them a competitive advantage by shedding light on how far they are leading or lagging and their absolute of relative performance. Gene noted there is still a lot of ‘greenwashing’ and so the challenge is getting the right data to the right place
12th MaySustainable Decision-Making
Sustainability is one of the most critical issues facing humanity. We hear about it in the news, in meetings, in interviews, and most of us want to become more sustainable. But how do we do it? 
Edmund Bradford is Director and co-Founder of The Good Growth Academy GOOD GROWTH INSIGHTS By The Good Growth Academy – Good Growth Academy . Good Growth is an important, holistic concept that transforms the way you do business. The Good Growth Academy has a 6-P model which encompasses the dilemma of how to balance between profit and planet. According to Edmund Bradford this requires purposeful leadership to build a sustainable organisation again involving some Ps such as promote, preserve, and prevent. 
profit_and_purposeSustainable organisations also need the S of ESG and treat people in an inclusive and ethically correct manner. He recommended the book Reimagining Capitalism in a World on Fire – Rebecca Henderson | Harvard Kennedy School
Dr Alina Udall from the Warwick Business School looked at how individual decision-making matters. She drew on the 3P’s of promote, preserve, and prevent and looked at what motivated sustainable organisations. The major factor seems to be habit which are also linked to a much-lesser degree to intent and moral purpose, but research also indicates that 32% is unexplained. In terms of individuals again 3Ps come to the fore – personality, people in terms of the group or organization you identify with and place and context. 
Her research focused on how to create a sustainable SME and this involved five steps: 1. Educate – staff and customers; 2. Network – find allies; 3. Focus on key areas; 4. Plan and organise; 5. Implement – measure (see Goals & progress (pepsico.com) and adapt. A sustainable SME also needs to find customers on the same wavelength – e.g. a green supply chain. 
13th JuneESG – E for environment: Is the Green Deal on track?
The ‘Environment’ is a key aspect of ESG and the European Green Deal European Green Deal – Consilium (europa.eu) is a package of policy initiatives, which aims to set the EU on the path to a green transition, with the goal of reaching climate neutrality by 2050. One of the key dimensions of the Green Deal is the ‘Fit for 55’ package Fit for 55 – The EU’s plan for a green transition – Consilium (europa.eu) which aims to translate the ambitions of the Green Deal into law with key areas for action: renewable energy, energy efficiency and taxation, greenhouse gas emissions, carbon border adjustment, a just transition, etc.
The Conference for the Future of Europe Conference on the Future of Europe (europa.eu) has also six out of its 49 recommendations , referring to climate. These recommendations include:• Safe, sustainable, just, climate responsible, and affordable production of food…,• Protecting and restoring biodiversity, the landscape, and oceans, and eliminate pollution,• Enhancing European energy security…,• Providing high quality, modern, green, and safe infrastructure… ,• Enhancing the use and management of materials to become more circular, more autonomous, and less dependent,• Fostering knowledge, awareness, education, and dialogues on environment, climate change, energy use, and sustainability.
This webinar picked up this final recommendation and invited  Antoine Colombani, Member of Cabinet of EU Commissioner Frans Timmermans responsible for the European Green Deal, to discuss the state of play of the Green Deal after the pressures of COVID, and now the Ukraine crisis on the European economy. Antoine Colombani quickly summarised the EU Green Deal and its key objectives of meeting the EU’s target of climate neutrality by 2050, support biodiversity and a circular economy and decouple resource use and growth. The Green Deal is therefore a  growth strategy alongside a ‘just transition’ The Just Transition Mechanism: making sure no one is left behind | European Commission (europa.eu) .
So where are we now? Climate laws have been introduced such as ‘Fit for 55’ with targets for energy efficiency and renewables, the Paris Agreement The Paris Agreement | United Nations is being implemented, a carbon border adjustment mechanism Carbon Border Adjustment Mechanism (europa.eu) is being discussed at the EU Council and in the European Parliament. 
Despite COVID, the Green Deal has not been called into question. Recovery Plans developed by the EU  Recovery and Resilience Facility | European Commission (europa.eu) are a temporary recovery instrument and allows the Commission to raise funds to help Member States implement reforms and investments that are in line with the EU’s priorities which include the twin transition: climate neutrality by 2050 and digital transition. The Ukraine war has also increased a need for Europe to be more self-sufficient which will mean more investment in solar power and heat pumps and green hydrogen.
Luca Bertalot, the Secretary General of the European Mortgage Federation noted that Europe was heading for a perfect storm which now included inflation. There was a need to build an ecosystem which could finance climate transition. This would need to guide capital markets towards a transition society. There was a need to improve ESG indicators and encourage new green investors particularly in the housing sector where 220 million houses needed renovation before 2030. 
Future generations will need energy-efficient ecosystems which will mean more information for consumers as well as new building performance standards. In short, the European Mortgage Federation supports a new ‘Marshall Plan’ involving a systemic approach to dealing with climate challenges.
Jessica Peters, Head of ESG at Argos Wityu focused on the integration of sustainability into organisations with her experience working at a sustainability rating agency, then moving into roles as CSR Manager and more recently leading the Sustainability practice lead of an environmental consultancy, before moving into private equity. She focused on three important regulations and guidelines that had come from the Green Deal. The first was the Non-Financial Reporting Directive (NFRD) which was created in 2018 to extend the reporting directives. The NFRD  will be extended by the  CSRD to extend the existing requirements of the NFRD. The focus of the proposal includes extending the scope of the requirements to all listed companies and large companies. 
The second was the EU Taxonomy EU taxonomy for sustainable activities (europa.eu) which under the Taxonomy Regulation establishes environmental objectives such as; climate mitigation and adaptation, sustainable use of water, move to a circular economy, pollution prevention and the restoration of biodiversity. 
The third was the  EU Sustainable Finance Disclosure Regulation (SFDR) Explainer: What are the SFDR regulations? – Capital Monitor which is a significant piece of new regulation that requires financial services providers and owners of financial products to analyse and disclose environmental, social and governance (ESG) considerations in a public way. It was introduced to bring transparency to investment products with sustainability-related claims, improve the ability to compare products, and to help investors better understand the impact of their investment decisions. 
The SFDR aims to create a more transparent field for investments. With asset managers having to disclose the different levels of sustainability integration, the SFDR is categorised into articles. The main ones are Articles 6, 7, 8 and 9. Article 6 of the SFDR relates to funds (grey) which do not take into consideration any sustainability in the investment process and could include stocks which are not included by ESG funds (e.g. tobacco companies). These products will still be sold in the EU, but they need to be labelled as non-sustainable. An Article 8 fund (light green) is a Fund which promotes environmental or social characteristics provided that the companies in which the investments are made follow good governance practices. An Article 9 fund (dark green) is a Fund that has sustainable investment as its objective or a reduction in carbon emissions as its objective. 
In conclusion, it was agreed that the Green Deal and ESG would need a new mentality and there was some optimism (possibly misplaced in hindsight) that the COP27 could provide this.
20th SeptESG Countdown – 1. Starting the Journey
Grant Thornton Belgium in partnership with CONNECTS and BECI have developed a milestone approach for organizations to embark on the ESG Journey. The journey consists of a number of critical steps, from the very start all the way to prepare an organisation’s first sustainability reporting. It will help develop and implement strategies and actions to improve the organisation’s impact in terms of Environment, Social and Governance.For every milestone along the journey, the CONNECTS platform will host a webinar. These webinars will contain an interesting mix of ‘theoretical’ insights, testimonials, insights from BECI and experts in the field. Webinars that you can join inside the ESG Countdown community.
Moderated by Leila Bardasuc, the webinar was opened by Jan de Brabanter, Secretary General UEB representing BECI Bienvenue sur BECI la Chambre de Commerce de Bruxelles who stressed the importance of ESG for SMEs and for the Brussels economy and then  handed over to Isabel Derison from Grant Thornton. She examined the history of ESG from the Non-financial Reporting Directive NFRD in 2014 to the EU’s Corporate Sustainability Reporting Directive CSRD in 2022. From 2024, all EU companies which are already subject to the NFRD and non-EU companies listed on a regulated market in the EU within the definition of large companies with more than 500 employees will be covered. From 2025, all EU companies will be covered regardless of capital market orientation, that exceed two of the following three size criteria (large companies): 250 employees; balance sheet total of more than €20 million euros; revenue of more than €40 million euros.
The CSRD will result in more transparency due to annual reports and will cover double materiality. Unlike single materiality which looks at only the “outside-In” impact on the financial performance of a firm, double materiality also considers the “Inside-out” perspective, which is the impact of the firm on all stakeholders which will mean more attention to the supply chain which will include SMEs. Therefore, ESG is becoming more important and goes beyond firms just being compliant, but ESG also plays a role in attracting talent and customers.
To do ESG you need to create awareness, do stakeholder mapping (inside and outside the company), a materiality assessment, develop an action plan alongside a sustainability strategy, develop or buy in tools for data analysis and then report. 
Barbara Trachte, Secretary State of Brussels Capital Region stressed the importance of linking the economy to climate and also the need to link the E and the S of ESG. It is important to speed up the transition in order to save jobs. Brussels is a good example of economic transition and the ‘Shifting Economy’ strategy will increase support for ESG. So SMEs should not miss the train. They can get on the train supported by Hub Brussels, CityDev and Innoviris. ESG is an opportunity to connect the public and the private sectos with sustainable finance. 
Odile Vekemans, Advisor on the Circular Economy to Alain Maron, Minister for Climate transition and Environment argued that we are now at a crossroads – we have what we need but now we just have to do it. This has stimulated the Brussels Climate Law in 2021 followed by a Brussels air, climate and energy plan to reduce GHG emissions by 37% by 2050  which is aligned to the EU’s  Fit for 55 policy. The key areas for emission are housing, offices and transport and so one of the key areas to develop is renovating the built environment through the ‘Renolution’ plan. This requires close collaboration with the construction sector. Brussels has tools and help-desks to support sustainable construction.
Transport is also a source of emissions so there is more encouragement of cargo bikes, and water-based transport. Brussels also needs to recycle more waste – an ambition to reach 70% by 2030.  Initiatives such as the ESG Countdown will certainly be of use. 
Jessica Peters from Argos Wityu looked at the role of private equity in implementing ESG. Argos Wityu has a new Climate Impact Fund. Everyone is aware of the Green Deal and this needs investment to accelerate change. Private equity invests in investor funds in companies and Argos Wityu actually manages 20 companies. Private equity has three phases: pre-acquisition and due diligence where climate risks are now more important; holding period 5-7 years where KPIs are developed and then finally exit where the company is sold and a successful ESG can add value to the company. 
ESG is a continuous cycle – there is no end. It is a continuous process with new challenges and new opportunities. Material topics are the starting point and are the first focus point.
Deep Parekh from MakeourFuture a cooperative consultancy focusing on ESG. SMEs need to pivot towards SMEs changing from a compliance to a growth mindset. SMEs need to make ESG their superpower. SMEs need to invest in data. Data provides visibility on costs, supply chains and can reduce costs through more information so you can work on your business not in your business. Data requires reporting but will provide confidence in the firm and provide opportunities for growth such as the example of Koh-Young which started ESG in 2017. 
SMEs often find it difficult to attract talent but more younger people interested in purpose not just profit. ESG also stimulates innovation and Deep Parekh gave an example of Alce Nero in Italy which embedded ESG at their core. ESG also gives you more access to capital.
SMEs can also engage with the local community and co-create the business. Sustainable brands may have a 30% sustainability premium as consumers are interested in sustainable products. 
Joost Visser from CONNECTS concluded the session by noting that it takes a community to build a business. Businesses exist in an ecosystem and both digital and green transition are transversal elements of that ecosystem. The CONNECTS Platform is for companies who wish to share information, learn, support and of course buy and sell. 
Joost Visser reminded the audience that there can be no net zero and no ESG without SMEs as they make up 98% of companies, 66% of jobs and 57% of GDP in Europe. All SMEs are different, there is no universal yardstick to understand and apply ESG and that is why the ESG Countdown series is especially valuable is developing awareness, educating, giving advice, matchmaking and hopefully celebrating success as companies become more confident about applying an ESG agenda. 
18th OctESG Countdown – Raise awareness: get your Board and employees on Board!
Moderated by Leila Bardasuc, the webinar was opened  by Jan de Brabanter from BECI who stressed the importance of ESG, and the increasing interest of the press. We need to raise awareness of both the regulations but also the opportunities of what the EU terms the ‘twin transition – green and digital.  Isabel Derison examined the importance of governance for ESG. Governance is not easy and there is no one size fits all. Grant Thornton have developed a maturity model that can help companies place themselves on where they are and where they want to go. This links to strategy and purpose – how far can you integrate ESG into your strategy (Ziegler) or purpose (Too Good To Go). 
Thus, governance needs to take into account an ideal governance set up, how you develop awareness, engagement, and seeing ESG as a possible long-term opportunity and avoid greenwashing. All these elements may require change so change is part of the governance. 
Sie Van de Broeke, Societal Impact Manager for Too Good To Go – social impact company to reduce food waste – noted that almost 40% of all produced food is lost and produces a lot of GHG emissions as well as the social aspects. Too Good To Go was founded in Copenhagen in 2015 and now active in 17 countries and has the vision of a planet with no food waste. One of the first steps is to raise awareness of food waste and connect unsold food to consumers by an application and the company takes a small commission. Food waste is not just food but the whole supply chain such as transport. 50% less food wate could reduce almost 90 gigatons of CO2 out of the atmosphere by 2050. Too Good To Go has expanded activities to other companies ‘Waste Worrier Brands’ and has also lobbied on a date labelling campaign – look, smell, taste. 
Roel Castelein, Corporate Sustainability Manager & Sustainability Strategies, Ziegler gave a full introduction of Ziegler a freight forwarding company founded in Briussels in 1908 and still a family firm. Now the firm has over 3000 employees with offices across the world and has a revenue of €1.3 billion – not bad for a company that started transporting wine from France by horse. 
Sustainability is very important for Ziegler as transport is a key issue in sustainability with 99.9% of products distributed by combustion engines. So, sustainability is a part of Ziegler’s strategy which involves embracing new technologies such as solar power and electrification (testing new autonomous vehicles), recycling, heat pumps, EV charging points, etc. as well as shifting to new forms of transport such as cargo bikes for last mile deliveries. Cargo bikes need logistical support and Roel Castelein pointed out that collaboration is part of the sustainability package.
Part of this shift to sustainability is driven by compliance and also the need to keep the company on a sound footing e.g. FIRE – finance, Invest, real estate. Ziegler is also pleased to help customers become more sustainable and this is a win-win for the company and clients by improving brand reputation. 
Interestingly, Ziegler has done little sustainability reporting up to now – preferring action to words. They realise that measuring CO2 emissions for a transport company crossing borders is a huge challenge as there is no standard framework yet.
Isabel Derison asked how awareness was raised in Ziegler? It started with customers before employees and Roel Castelein thought this was the wrong way round and these are early days giving out fish not teaching people to fish and this will take time. IT systems will play a strong role.
Sie Van de Broeke noted that new employees were already conscious of sustainability as this was the organisation’s purpose. Isabel Derison asked whether this focus on food lowered awareness of the S and the G of ESG and Sie Van de Broeke agreed that more attention was needed to the social dimension. 
Roel Castelein noted that the company was open to work with a range of partners academics, local government – you need a coalition of the willing with similar values. Belgium has advantages as it is small and well-networked country. 
Sie Van de Broeke replied to the question on governance and mentioned that Too Good To Go has a strong commitment to employee wellbeing. 
Joost Visser concluded the webinar by noting that CONNECTS slogan is that it takes a community to build a business. CONNECTS has developed a platform for businesses to collaborate particularly around the challenge of climate change. There is no zero without SMEs. Larger companies drive supply chains but they also play a part in raising awareness in the supply chain often involving SMEs. Future webinars would follow.
24th NovScope 3 reporting’ and other challenges in a post COP27 world
Moderated by Leila Bardasuc CONNECTS/TIAO, this webinar looked at the importance of Scope 3 reporting which is the emissions produced by companies (often SMEs) through their supply chain which accounts for around 75% of their emissions. Scope 1 is the direct emissions from the company and scope 2 are the emissions linked to the energy production that the company uses. 
Joost Visser CEO of CONNECTS outlined the role of CONNECTS as a B2B platform encouraging collaboration between companies on key opportunities and challenges such as ESG. He reminded the audience that businesses are part of an ecosystem – they do not and cannot stand alone. One of today’s key challenges is the green transition and as SMEs make up 98% of companies, employ 66% of the workforce and contribute 57% to global GDP, no green transition will happen without SME engagement. In order to support this transition CONNECTS has developed an ESG Journey which is a playback for all actors to help them engage in the ESG movement. 
Yvon Slingenberg, Director, DG Climate Action, European Commission, gave a brief introduction to the current climate agreements beginning with Kyoto Protocol 1997 What is the Kyoto Protocol? | UNFCCC which led the way of seeing climate change as a global problem to the Paris Agreement (COP21) in 2015 where all countries pledged to reduce their emissions and funding was agreed for developing countries to reduce their emissions. At the COP26, a 1.5 degree Celsius target for the end of the century was agreed and the COP27 kept this target alive. The COP27 also delivered the Sharm el-Sheikh Implementation Plan CMA4_AUV_TEMPLATE (unfccc.int)  which makes tremendous strides in addressing a just transition into renewable energy. COP27 also agreed a Loss and Damage Fund supported by the EU which will help the poorest developing countries unable to get loans to tackle climate change. This fund will be defined at COP28. 
However, the EU was disappointed with some lack of decisions at the COP27 and welcomes the global stocktake planned for the COP28 which will also outline country contributions to achieve climate neutrality by 2050 beyond 2030 planning. 
At the EU level, the Green Deal along with the EU’s Climate Law European Climate Law (europa.eu) provides the policy backbone. Although the EU has reduced its emissions by 30% from 1990 there is still a need to do much more and address the whole economy as well more attention to strategic foresight such as that all new vehicles sold from 2035 must be zero emission vehicles. By addressing the whole economy then all EU funding needs to have a climate dimension such as the multi-annual financial frameworks and the more recent Recovery Funds. So Scope1, Scope 2 and Scope 3 emissions are important and although SMEs are outside Scope 3 reporting many will be involved if they are in supply chains with larger companies. So SMEs do need a transition plan because despite COVID and the Ukraine war, the green transition is still on with a stronger focus on self-sufficiency (see REPowerEU: affordable, secure and sustainable energy for Europe | European Commission (europa.eu) ). Challenges are here and on the way such as new emission targets for 2040 and more resilience policies. 
Ulrike Shapiro, Chief Sustainability Officer for Henkel, introduced the 140-year-old German company Henkel, best known for its chemical (laundry and hair products) and adhesives (industrial glue) products. Climate risk is not good for business and also consumers want climate-friendly products. Therefore ESG is important for Henkel which relaunched its ESG strategy in 2022 Sustainability (henkel.com) .
The company has 30,00 suppliers hence the interest in Scope 3 reporting which is not just an end of pipe figure but requires a circular and integrated approach as Henkel is trying to reduce both its own Scope 1 and Scope 2 emissions as well as a 40% reduction in Scope 3 emissions. Reducing Scope 3 emissions is challenging due to a lack of control over suppliers and getting reliable data. Three key challenges need to be faced: 1. which framework to use and getting the numbers; 2. need to build new data systems; 3. Improve data quality (rubbish in equals rubbish out). These challenges are being addressed by collaborating with other chemical companies through ‘Together for Sustainability’ Home – TFS Initiative (tfs-initiative.com) to develop a set of reporting standards. 
Alison Tate, Director, Economic & Social Policy at the International Trade Union Confederation, remarked that the Paris Agreement was a global recognition of climate change but it still needs to be implemented and this involves everyone both companies and customers. WE need to see implementation as not just an issue of temperature but also as an issue of people. Workers must engage in reducing emissions and not just machines. This means that we need a wider approach involving partnership, understanding and transformation. 
The Climate Vulnerable Forum Home – The Climate Vulnerable Forum (CVF) (thecvf.org) has already calculated the losses of some countries’ national income due to climate change so we need to balance the costs of inaction against the costs of the Loss and Damage fund which is still a rather empty bucket. 
One of the key actors in the climate and ESG debate could be pension funds who should be more aware of not investing in ‘stranded assets’ which also results in ‘stranded people’. The pension funds need to be part of a just transition providing quality employment. This is where SMEs need an climate and an employment plan where they need to engage with a range of stakeholders to secure the future livelihood of workers in a just transition. Obviously certain sectors such as energy, construction and transport are in the front line. In a way ESG is not new but is does require planning engaging stakeholders, developing strategic foresight, planning and implementation 
Guido Lena, Director for Sustainable Development for SME United, introduced SME United which represents craft industries and SME organisations from 30 European countries. Its role is to provide information and influence EU policy and also joins EU projects. Sustainable development is a key activity of the organisation and Scope 3 emissions are a key challenge for most SMEs who have relied on a linear method with little life-cycle analysis.SMEs therefore need to walk before they can run. Learning to walk involves an enabling framework which can embrace energy transition. This will include information, technical assistance, finance and funding, skills, capacity building for SME organisations. In a word a one-stop shop. Although many SMEs and linked to local communities and place, they are often unaware of CSRD and therefore reporting should remain voluntary and any reporting needs to be proportionate. CSRD and the EU Taxonomy will require reporting from SMEs and gradually they will have to provide it as reporting requirements trickle down but it would be useful to set up a template that could be used across a range of sectors. SME United is developing a draft reporting instrument with the help of EFRAG Home – EFRAG which should be ready in the spring of 2023. 
Deep Parekh, MakeourFuture, a global cooperative that does sustainability-related projects all over the world. According to Deep Parekh SMES are squeezed from three sides: by large companies; governmental requirements and financial institutions. Although CSRD only applies to around 50,000 large companies, as mentioned by SME United, they will gradually be squeezed for data. This data will be in the form of The European Union Sustainability Reporting Standards (ESRS) – an upcoming set of EU compliance and disclosure requirements designed to make corporate sustainability and environmental social governance (ESG) reporting within the EU more accurate, common, consistent, comparable, and standardized The EU Sustainability Reporting Standards (ESRS) – Timeline and Overview (brightest.io). Financial institutions will require SMEs to be on the ESG journey to obtain attractive funding. The problem with the ESG journey is that companies need to focus on all of the letters E and S and G. So an SME has an option of focusing on one of the letters or reconfiguring its product, process and business model which involves a change of mindset to see ESG as an opportunity and not just compliance. Scope 3 then can be a carrot and as a lever for innovation. Deep Parekh used three case studies to illustrate how companies had innovated. From a product standpoint, FROSTRA Company Overview – FRoSTA AG (frosta-ag.com)  has developed sealable cardboard packaging for herbs. From a process perspective, DECONTEX Decontex Group – Cleaner. Safer. Healthier. has developed a cleaning method using CO2 in a pressurized chamber to clean dirty and contaminated materials such as fire fighter protective clothing. From a business model viewpoint Too Good To Go HOME | Too Good To Go Meals have combined waste management and food delivery thus combining B2B and B2C. Companies can offload food and consumers can benefit from lower prices. In conclusion, SMEs have a choice, leverage Scope 3 and seek opportunities or simply accept compliance. Theirs is the choice. 
In conclusion, Yvon Slingenberg agreed with Deep Parekh that Scope 3 can be seen as a n opportunity and welcomed the support of the CONNECTS Platform. The green transition should be seen in a positive light and not just a pile of regulations. Sustainability is the objective not reporting. Deep Parekh noted that one-third of workers are in a supply chain so how supply chains function is and will be an important topic and one that CONNECTS might wish to take up. Guido Lena noted that we need to avoid a sink or swim approach to SMEs within the climate debate and as they are the backbone of the EU economy we need to keep them afloat. Joost Visser concluded the session by thanking all speakers and participants to what had been a very interesting webinar which showed that green transition is complex topic which needs an ecosystem approach something that the CONNECTS ESG Platform can help provide – see CONNECTS – Business Opportunities For Entrepreneurs 
29th NovESG Countdown – Get your stakeholders involved!
Leila Bardasuc from CONNECTS welcomed the speakers and participants to the third ESG Journey webinar.  The first two webinars (both recorded and online)  introduced the concept of ESG and how to raise awareness of ESG within the organisation. 
Joost Visser from CONNECTS introduced the CONNECTS Platform and stressed the importance of business ecosystems and that it takes a community to build a business. One of the key issues facing the business community was sustainability. First of business was a key player in reducing emissions, secondly, the new green agenda offered opportunities (the carrots) and new regulations such as the CSRD  (the stick) which had to be applied by big companies today but SMES would also be affected. There would be no net zero without SMEs. 
Isabel Derison from Grant Thornton examined the role of stakeholders. Stakeholders were people who affected the firm and could play an important role in terms of co-creation of the company’s ESG journey and long-term value creation. It was therefore essential to both identify stakeholders who could be internal, external, local and international and map their level of power and interest. This could be done on a simple diagram of low-high interest vs low to high power. Obviously, stakeholders with high interest and power did not require information as those in the low-low category but required engagement and partnership and could be in a decision-making role.
Manuel Vexler, Executive Director AKFI (Actionable Knowledge Foundational Institute) introduced AKFI which is a non-profit industry association providing a neutral platform serving the common business and professional interests of its members. AKFI integrates Digital Transformation, Sustainability, and ESG insights into actionable and sustainable strategies used to increase economic value and protect against catastrophic risks for our members. 
Companies need imagination, inspiration, and intuition to grasp the future with its technology, environment and social uncertainties. One of the key issues now is how can supply chains implement sustainability?
50 years ago, Milton Friedman defined the role of business to make a profit for shareholders – shareholder capitalism. 50 years on we now have stakeholder capitalism which includes sustainability. This stakeholder capitalism is linked to Industry 4.0 and disruptive innovation and digital transformation in achieving profitable sustainability and ESG goals. There are two stakeholder categories trends: employees (culture change and upskilling in ESG and Digitalization needed) and supply chain stakeholders (sustainability challenges are growing as the distance in the supply chain is increased).
Digital transformation is difficult to define but it does involve new business models, cultures, and employees along with digital technologies such as artificial intelligence. 
Pierre Hanoune, CTO / COO / Administrateur of Urbike  introduced the  cyclo-logistics cooperative that provides four complementary services to improve the quality of life in the city: delivery, advice, training, and material. Pierre Hanoune noted that now one delivery in four could be done by bike – a shift from 0.1% to 25%. 
Urbike promotes the transport of goods by bicycle with a mission of gradually replacing vans and light trucks by cargo bikes for the last mile of delivery. There is a potential transformation of deliveries in cities and expanding market but challenge of scaling up.
Urbike stakeholders include companies employing Urbike and also staff and cooperative members. There are now 400 stakeholders each having one vote. As a cooperative Urbike has a strong ESG focus for staff and promotes permanent contracts, SMART contracts for part-time workers. 
In a question and answer session Urbike noted that it had to develop KPIs so customers could ‘sell’ the bike delivery to both the public and internally. Urbike is also data-driven and must fit the needs of customers. 
Filip de Rycke from BECI asked how companies started the dialogue with stakeholders? He suggested that ESG was the first step but that should be a commercial discussion, leading to governance from which ESG becomes a by-product. This shift from commercial to ESG needs to be driven by regular meetings and measuring positive impacts. 
Joost Visser noted the shift to non-financial reporting and Isabel Derison also embraced the shift from shareholder to stakeholder who could help create long-term value. This requires co-creation and continuity.
Filip de Rycke from BECI concluded the webinar by stressing the importance of ESG for SMEs but there was little sense of urgency within SMEs as they were faced with urgent issues such as energy. However, the ESG Countdown was a good example of stakeholders getting involved in co-creation so keep tuned. 
20th DecESG Countdown – Deep Dive in Environmental Materiality
Joost Visser, CEO of CONNECTS welcomed participants and started  the event with some good news that on 19th December 2022, the COP15 in Montreal came to a close  and the Nations of the World have adopted a landmark UN Biodiversity Agreement . This was an important step in the right direction because if we are to survive as a species, we not only need to control global warming but we also need to make sure that the world’s biodiversity is not going to collapse. 
He then introduced the agenda and speakers. He explained that the ESG Journey consists of a series of 10 webinars which will help your organisation prepare for an ESG (Environmental – Social – Governance) future. For every milestone along the journey, the CONNECTS platform will host a monthly webinar containing a practical mix of theory, tips, testimonials, insights from Grant Thornton, BECI and many other experts inside the ESG Countdown Community.
ESG is all about collaboration and becoming a member of this community will give you access to the community with expert advice and know-how from different sectors, future events, materials and recording so you can benchmark your progress towards ESG. The CONNECTS Platform provides a B2B collaboration model based on a collaborative ecosystem approach which emphasizes the stakeholder rather than the shareholder perspective of capitalism.
Isabel Derison from Grant Thornton recapped previous Countdown events and the ESG Journey and introduced the fourth webinar on environmental materiality. Materiality can be defined as any activity that has an impact on the company. This if often broken down to two concepts: inside-out and outside-in. Iside-out is basically what the company contributes to global warming such as carbon emissions while outside-in is more concerned with current and future risks for the company due to climate change. 
Focusing more on the inside-out dimension,  environmental materiality is especially important for industrial companies and would include energy consumption, emissions, pollution, waste, use of raw materials, etc.  and shifts towards a circular economy. 
Isabel Derison then introduced Niels Breugelmans who will be joining Grant Thornton as a specialist on sustainability.  Niels Breugelmans focused on the need to shift from a linear economy with waste as an end product towards first of all a recycling economy and then a circular economy closing the loops. He introduced the R-Ladder concept developed by the Ellen MacArthur Foundation What is a circular economy? | Ellen MacArthur Foundation
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Isabel Derison then welcomed three testimonials/case studies from organisations who would be able to show practical measures on reducing their environmental footprint. 
Romy De Maeyer, Sustainability specialist from Proximus introduced Proximus an international company based in Belgium best known for its digital services. Proximus has been active in setting environmental goals so it can play a leading role in Belgium’s transition to a net-zero ambition. In 2021, Proximus carried out an inside-out materiality assessment and will do another assessment in 2023 or 2024. The assessment showed that in terms of a CO2 footprint most of Proximus’s emissions (94%) were in Scope 3 relating to upstream suppliers and downstream customers. This high Scope 3 figure illustrated the need to move to a more circular economy as 79% of the Scope 3 emissions come from Proximus purchases. However, Proximus has introduced a smart phone return service (estimated at 11,000 smart phones in 2022) and a refurbishment service which handled 845,00 pieces of equipment in 2021 and sharing a  5G network with Orange.
Proximus has set a series of targets such as fossil-free by 2025, 100% renewable energy by 2030 leading to net-zero emissions by 2040. Proximus has also achieved the goal of flat energy consumption despite data increase and will renovate the head office in Brussels to save energy and has also introduced apps that can help phone customers to analyse their own CO2 emissions and in collaboration with the Belfius bank provide date on Co2 content on purchases paid by bank cards. 
Ciara Chauvineau (ESG Lead) and Sara Asmoarp, Head of Supply & ESG introduced the Full Stack Supply Company based in Switzerland. The company is a supplier of outdoor goods: skis, outdoor apparel, snowboards and footwear (snow boots). The company has four different brands which are sold by shops. They have used the B Corp certification method B Corp Certification demonstrates a company’s entire social and environmental impact. (bcorporation.net) which helps standardize materiality standards. 
The company sees sustainability as bottom-up approach and has divided its environmental materiality into two overlapping circles: compulsory – where regulations are involved – poluution, chemical etc. and voluntary such as energy use, packaging, etc. They pointed out that ESG is not a static diagram and it was better to accept imperfections in methodology and get started than wait around. 
They also introduced the need for collaboration as in the case of the recycling of skis which often ended in landfill due to the difficulty in recycling. By collaborating with other brands life cycles could be extended as in the case of outdoor apparel where initial quality increased the life of the garment and indeed, they had in place options for repairing and re-selling clothing as well as future renting options for ski equipment. 
70& of the company’s emissions come from production and they need to focus on their supply chain which involves transparency, relationships, trust, and local sourcing. The key challenges they face as an SME is that it is difficult to have all the expertise in-house and there is a need to move towards a circular economy where collaboration is essential. 
Caroline Gregoire introduced DEMCO, an industrial group with 4,500 employees, located in Tunisia and created in 1991. It includes two main activities: the manufacturing of garments (DENIM and knitted) and the manufacture of aluminium profiles. 
Since its creation in 1991, DEMCO has grown with a care for the social and the environmental aspects of its businesses. It strives to reduce energy, water and chemicals consumption and to recycle main fluxes of waste. In 2019, DEMCO developed a sustainability roadmap up to 2025 that consists of 16 objectives (e.g. energy, climate, water, waste, chemicals, etc.) with 32 actions listed to achieve these objectives. 
Climate actions include a shift towards a circular economy with zero waste, using sustainable materials, and a reduction of Co2 emissions by 2030 by 43% (from a 2019 baseline). This involves increased solar power and carbon off-setting through forest and vineyard plantations. 
‘DEMCO circular’ involves a zero waste ambition  and water stewardship with an aim of recycling 95% of water by 2023 and also includes the redesign of jeans to improve their recycling with help from the Ellen MacArthur Foundation. 
The key challenges faced by DEMCO are customer pressure for more sustainable garments but of course a reluctance of consumers to pay a higher cost for ‘greener’ products. As many of the Scope 3 emissions come from suppliers there is a need to get supplier engagement. There is also the challenge of attracting talent to the textile industry and obtaining investment which can be used for decoupling efficiency and energy usage. Finally the EU ‘Carbon Tax’, to be fully implemented in January 2026 Carbon Border Adjustment Mechanism (europa.eu) may have future implications for textile exports to the EU. 
Following a session of questions from participants, Isabell Derison summarized the main points raised in the session and then Filip de Rycke from BECI thanked speakers and reminded the audience that it was better to start doing ESG as it is an opportunity. However, it was clear from the speakers that moving towards a circular economy required collaboration and BECI was ready to support companies on their ESG journey.

Conclusions

There can be no net zero and no ESG without SMEs as they make up 98% of companies, 66% of jobs and 57% of GDP in Europe. All SMEs are different, there is no universal yardstick to understand and apply ESG and that is why CONNECTS webinars are especially valuable is developing awareness, educating, giving advice, matchmaking and hopefully celebrating success as companies become more confident about applying an ESG agenda. 

During the year, the webinars examined the challenges of ESG and this includes timelines in terms of current NFRD, SFRD  and upcoming CSRD legislation with three experts from the European Institutions. But it is clear that ESG is not just regulations it is also a question of mindset. Anne Van den Bergh, Director of Sustainability of the Ageas Group (a leading insurance company in Belgium) noted that sustainability is a driving force for value and not just an add-on. Sustainability is becoming a ‘licence to operate’ and is driving a new business ecosystem.

This was backed up by James Kiernan, Director of Relationship Management, Chambers Ireland, who noted that the Irish Chambers were specifically engaging in five SDGs THE 17 GOALS | Sustainable Development (un.org). The benefits for the organisation included brand reputation, marketing, staff attraction and retention and efficiency. However, more information was needed on the importance of sustainability and that is why they had organised a Sustainable Business Council delivering sustainable impact awards Chambers Ireland Website along with an SDG toolkit to encourage engagement. 

Edmund Bradford, Director and co-Founder of The Good Growth Academy GOOD GROWTH INSIGHTS By The Good Growth Academy – Good Growth Academy noted that good growth is an important, holistic concept that transforms the way you do business. However, how to do it is not that easy as Dr Alina Udall from the Warwick Business School explained using her 3P model of promote, preserve, and prevent and looked at what motivated sustainable organisations. 
Sustainability is just one of the challenges facing SMEs. Therese Baptiste argued that digital transformation also needs organisational change which should include a social component involving workforce health and an awareness of the culture of the organisation. Companies should examine their supply chains to make sure they were ethical and shifted their ambitions from not just ‘profit’ but what ‘type of profit’. A good example of a more ethical approach was provided by Urbike a cyclo-logistics cooperative that provides four complementary services to improve the quality of life in the city: delivery, advice, training, and material. Urbike stakeholders include companies employing Urbike and also staff and cooperative members. There are now 400 stakeholders each having one vote. As a cooperative Urbike has a strong ESG focus for staff and promotes permanent contracts and correct contracts for part-time workers.
Manuel Vexler examined how ESG is integrated into what we now term Industry 4.0 and the shift to Industry 5.0 which goes beyond efficiency and productivity as the sole goals and reinforces the role and the contribution of industry to society, placing the wellbeing of the worker at the centre of the production process and using new technologies to provide prosperity beyond jobs and growth while respecting the production limits of the planet.
From a European perspective there are the twin challenges of digital and sustainability. The sustainability arm comes under the ‘Green Deal’. The Green Deal is a  growth strategy alongside a ‘just transition’ The Just Transition Mechanism: making sure no one is left behind | European Commission (europa.eu). However, it is clear that the Green Deal and ESG will need a new mentality but there was some optimism (possibly misplaced in hindsight) that the COP27 could provide this.
Alongside a change in mentality, Barbara Trachte from the Brussels Capital Region stressed the importance of linking the economy to climate and also the need to link the E and the S of ESG. It is important to speed up the transition in order to save jobs. So, SMEs should not miss the train. Within a ‘green’ agenda, there are key areas for emissions such  housing, offices and transport which will provide future opportunities for ESG-minded SMEs. Deep Parekh echoed this point and argued that SMEs need to pivot towards SMEs changing from a compliance to a growth mindset. SMEs need to make ESG their superpower. SMEs also need to invest in data. According to Deep Parekh, SMES are squeezed from three sides: by large companies; governmental requirements and financial institutions. Although CSRD only applies to around 50,000 large companies, SMEs will gradually be squeezed for data. This data will be in the form of The European Union Sustainability Reporting Standards (ESRS) – an upcoming set of EU compliance and disclosure requirements designed to make corporate sustainability and environmental social governance (ESG) reporting within the EU more accurate, common, consistent, comparable, and standardized The EU Sustainability Reporting Standards (ESRS) – Timeline and Overview (brightest.io)
Data provides visibility on costs, supply chains and can reduce costs through more information so you can work on your business not in your business. Data requires reporting but will provide confidence in the firm and provide opportunities for growth. Gene Okun presented the SUSTCO Score which was launched in 2021 and recognised the increasing interest of ESG within professionally managed assets. SUSTCO Scores provide companies with a set of metrics which can provide them a competitive advantage by shedding light on how far they are leading or lagging and their absolute of relative performance. Gene noted there is still a lot of ‘greenwashing’ and so the challenge is getting the right data to the right place.
With the COP27, one of the most important webinars was on Scope 3 reporting and other challenges in a post COP27 world. At COP26, a 1.5 degree Celsius target for the end of the century was agreed and COP27 kept this target alive. COP27 also delivered the Sharm el-Sheikh Implementation Plan CMA4_AUV_TEMPLATE (unfccc.int)  which makes tremendous strides in addressing a just transition into renewable energy. COP27 also agreed to a Loss and Damage Fund supported by the EU which will help the poorest developing countries unable to get loans to tackle climate change. This fund will be defined at COP28. 
Ulrike Shapiro, from Henkel which has 30,000 suppliers noted Henkel’s interest in Scope 3 reporting which is not just an end of pipe figure but requires a circular and integrated approach which is something that SMEs struggle with as Guido Lena reminded us that Scope 3 emissions are a key challenge for most SMEs who have relied on a linear method with little life-cycle analysis.as Henkel is trying to reduce both its own Scope 1 and Scope 2 emissions as well as a 40% reduction in Scope 3 emissions. Reducing Scope 3 emissions is challenging due to a lack of control over suppliers and getting reliable data as noted above.
Scope 3 was also evident in the final webinar on environmental materiality. The companies who presented all had issues with measuring and dealing with scope 3 emissions which require transparency, trust and collaboration. The key messages from this webinar were that the companies who presented were well into their ESG journey, had sustainability as a key driver and had strategies and actions to hit targets. For SMEs this can be a challenge but a bottom-up approach with a what nay be an imperfect methodology is better than waiting. ESG has sticks but also carrots – ESG is an opportunity so it is important that SMEs get on the bandwagon and if they are in a supply chain with a large corporation they will have to provide information on their emissions in the near future. 
So, 2022 brought expert speakers bringing information, ideas and enthusiasm to the ESG debate. As noted in the introduction, ESG is not an easy debate and SMEs especially need support and guidance. The CONNECTS Platform and its ESG communities aims to do that and the 2022 webinars indicate the depth and range of discuss coming from an international perspective. As CONNECTS notes ‘you need a community to build a business’. SMEs, often place-based, also help to build communities and can play a strong role in supporting the reduction of emissions and achieving climate targets for the future of our planet. 


Text produced by Richard Tuffs