Wen Yan Jiajia Shi Dan.
id | bmr2004
Cover |Dr. Lv Jianzhong, Deputy Director of the Sustainable Development Management Committee of the Chinese Management Science Society and Vice President of the Green and Low-Carbon Branch of the Shanghai Foreign Investment Association.
At present, whether enterprises can achieve effective results in ESG implementation depends on whether they can change their business thinking mode, analyze their business activities from the perspective of sustainable business, and find out the extendable value chain, expandable growth space and development opportunities. ”
At the 9th Xiangguang Annual Meeting, Dr. Lv Jianzhong, deputy director of the Sustainable Development Management Committee of the Chinese Management Science Society and vice president of the green and low-carbon branch of the Shanghai Foreign Investment Association, said.
In Lv Jianzhong's view, "the traditional business philosophy and business model of enterprises are basically limited to selling their products to customers, and then obtaining profits from sales, and the means used are also simple short-term benefit marketing methods, and the value chain is very short." "This also means that companies need to combine ESG with sustainable business perspectives and business mindsets to extend their value chains and build sustainable competitiveness. The theme of this year's Light-Oriented Conference is "Value Innovation of ESG and Sustainable Development - ESG Ecology Conference".
At the sub-forum on "Social Value Innovation Enhances the Sustainable Competitiveness of Enterprises" chaired by Dr. Lv Jianzhong, four core issues related to corporate ESG practice attracted in-depth discussions from many entrepreneurs in the manufacturing, agriculture, service and consumer goods industries. The questions are: At present, has social value creation been incorporated into the mission, vision, and values of the enterprise?Why and how should companies consider the importance of social value creation in their business activities?How to integrate business value and social value in different industriesCan start-ups take the creation of social value as the pursuit of corporate growth and development at the beginning of their establishment?
Focusing on the above issues, the reporter of "Business School" further interviewed Dr. Lu Jianzhong in depth.
The primary, secondary and tertiary industries face different ESG challenges and risks
Lu Jianzhong thinksBy rethinking business activities with a sustainable business mindset, ESG opens up a new way to create corporate value, social and environmental benefits. The secret of this process is that the consideration of value realization is no longer limited to the short chain of simply giving the product to the customer, but pays attention to the application scenarios of the product, which stakeholders will affect the release of the value of the product after the product enters the use link, and how to recollect, disassemble, sort, reuse and remanufacture after the end of the product life, and then reuse the resources contained in the product and extend the value chain.
This is a new approach to sustainable business thinking with a full life cycle, full value chain, and all-round ecology. It is this kind of ecology in which all stakeholders participate in the whole life cycle and value chain of a product, which will bring new market space and business incentives to enterprises. Lv Jianzhong told the "Business School" reporter.
So, under this unified approach, what are the different ESG challenges and risks faced by the primary, secondary and tertiary industries?And what are the feasible measures to achieve the ultimate ESG goals?
In this regard, Lv Jianzhong told reporters, "First of all, the challenges facing China's agriculture in terms of ESG involve whether it can replace traditional land use and management methods, farming practices and agricultural infrastructure construction with modern, scientific and systematically designed facilities, which requires us to use land resources more efficiently, while protecting and restoring the natural ecological environment." While digitalization makes agricultural production operations more refined and accurate, it is also necessary to implement the concept of circular economy into the agricultural operation process. ”
In fact, in the tradition of China's agricultural operations, there has long been the concept of recycling resources, for example, farmers in the Pearl River Delta will combine mulberry fields with fish ponds, and comprehensively utilize mulberry leaves, fish manure, pond mud, etc., to form an efficient and environmentally friendly circular economy systemFor example, the students of the scientific research team of Guangdong Pharmaceutical University paid attention to the problem of veterinary antibiotic residues in the feed of the aquaculture industry, and in order to solve this problem, they found that an enzyme can be extracted from citrus to replace animal antibiotics, reduce the residue of antibiotics in the animal, and enter the consumption link can also reduce the adverse effects on people. In addition, this "green" enzyme can also make the farming industry more robust, and animal manure can be collected to make organic fertilizer, which can then be fed back into agriculture, thus forming a circular economy.
In the circular economy, there is also a lot of room for business support for agriculture and community development. For example, Budweiser has developed the symbolic brand "059" (representing the provincial code of Fujian Province) with Fujian as an important production base, aiming to use beer brewing as a leader to drive the development of various flavors of fruit tree cultivation and planting in Fujian. Budweiser uses these fruits to produce a variety of popular flavored beers, which not only expands new consumer markets, but also drives the development of the local fruit cultivation industry, increasing the income of fruit farmers and improving their living standards. Although there are huge challenges in agricultural ESG, there is still more room for development in agricultural science and cooperation between farmers and enterprises.
Secondly, the ESG challenges faced by the manufacturing industry are to reduce pollution, reduce carbon emissions, improve energy and resource efficiency, and strengthen workplace safety and environmental protection measures in the manufacturing processAt the same time, it is necessary to maintain the competitiveness of the product. Lu Jianzhong told reporters.
In Lv Jianzhong's view, the competitiveness of enterprise products is not only related to the enterprise side, but also whether manufacturing enterprises can form an optimal production and manufacturing around reducing carbon emissions between upstream and downstream, and can reuse resources in the product life cycle. If the upstream and downstream interaction can be formed to drive the entire industrial chain to reduce carbon emissions, it will bring new growth space.
Thirdly, in response to the ESG challenges faced by the service industry, in addition to reducing carbon emissions and improving service quality, enterprises can also extend the value chain and expand the space for value creation by empowering the industries and enterprise sectors they serve. For example, information platforms and Internet platforms can empower many enterprises in digitalization, low-carbon operations, cleaner production and other links, and financial platforms can empower enterprises in financing, so as to enhance the sustainable development ability of enterprises. Lu Jianzhong said.
It is worth noting that whether it is agriculture, manufacturing, or the service industry, if you want to deal with the challenges and risks brought by ESG, you need to be guided by benchmark management standards.
In this regard, Lv Jianzhong believes that "this is a phased issue in the development of ESG, and the standards will be more converged in the future, for example, a system with GRI, ISSB, CSRD as the main leading standards may be formed, and there will also be standards suitable for China's national conditions." ”
Lv Jianzhong told reporters, "Regarding the benchmarking of standards, you can adopt the 'four plus one' working method, that is, according to their own industry, the target market involved in the operation, and the location of listing, the four levels of ESG disclosure requirements of 'regional standards (such as the European Union), 'national standards', 'industry standards' and 'product standards' (such as the lithium battery management law), as well as the ESG disclosure guidelines given by the listing exchange, to refer to the framework applicable to their own report preparation and disclosure." ”
First of all, it depends on the region in which the enterprise operates, and if it is in the EU region, it is necessary to pay attention to the "carbon border" standard. In addition, it depends on the specific country, if it is in the UK, there are many detailed standards in addition to following the EU's ESG standards. Then, it depends on the industry in which the enterprise is located, such as the chemical industry and the food industry, and the standards are different. Finally, it depends on whether the products operated by the enterprise have special regulations and requirements in the international or domestic market, such as lithium batteries, and the European Union has a special management law on lithium batteries. When enterprises sort out the above four levels of regulations, they will have a more systematic and clear understanding of ESG standards. Finally, "plus one" refers to the fact that companies go public, and they need to accept the guidance of ESG disclosure on the local exchange where they are listed.
Enterprises practice ESG three starting points
Lv Jianzhong believes that ESG is rebuilding the business track while changing the rules of business. Entrepreneurs need to be fully aware of this.
The change in the rules of business is not superficial, but profound. In the CSR era, companies are not required to disclose non-financial performance data, but in the ESG era, there are regulations and exchanges of supervision and management, and companies must disclose ESG data as required. In the CSR era, enterprises pay more attention to brand image, and modern enterprises must not only have corporate image, but also social influence, social trust and social license to operate, only in this way can they achieve a broader and deeper trust and a better business environment in the society. Lu Jianzhong told reporters.
From the perspective of trends, ESG is not only related to the information disclosure level of enterprises, but also affects the selection and portfolio of investment targets on the investment side. Different from traditional financial indicators, ESG information disclosure can more comprehensively reflect and measure the impact of a company's sustainable operation ability, non-traditional risk management and control capabilities, and measures and steps taken in response to environmental and social challenges, helping investors better predict the company's future comprehensive performance.
In Lv Jianzhong's view, "there are three urgent issues for enterprises to promote ESG. The first is to optimize the green, transparent and sustainable chainThe second is carbon reduction and overall planning of carbon assetsThe third is the digitization and intelligence of ESG data. This can also be seen as the three starting points for enterprises to practice ESG. ”
First of all, the green, transparent and sustainable chain is a very urgent and critical part of the company's ESG practice, which not only involves the upstream and downstream, but also involves the external world, as well as the whole value chain from production to consumption, from manufacturing to use. In addition, companies also need to reduce carbon emissions on the consumer demand side on the basis of reducing carbon emissions on the production side.
Secondly, in the field of reducing carbon emissions, there are not only carbon verification, carbon calculation, but also scientific means and technical measures to reduce carbon emissions, as well as how to trade carbon as an asset to form carbon financial assets, which is also a problem that needs to be solved in the next three to five years, and of course this is also an emerging opportunity.
Finally, there is data, without which there is no information disclosure and no ESG management. In addition, data is also the basis for improving the strategic decision-making and competitiveness of enterprises, data digitization can become an asset for corporate decision-making, and the integration of financial and non-financial data can help enterprises formulate strategies and avoid more risks.
The "12345" Five-Step Approach to Practicing ESG** In Lv Jianzhong's view, the fundamental purpose of ESG is to promote the sustainable development of enterprises, which can be called a new value creation activity led by sustainable business strategies. This value creation includes three dimensions: corporate value, social value, and environmental value, and these three dimensions are always the performance considerations of enterprises in promoting ESG paths from the entry point to the foothold, the balance point, and the commanding heights.
How to implement ESG into the process of corporate strategy design and business activities?In practice, Lv Jianzhong has developed a practical and easy-to-operate "12345" five-step formula**.
1. Enterprises must first establish a clear sustainable business purpose. First of all, it is necessary to be clear about the social purpose of the existence of the enterprise, realize that ESG brings new values to the enterprise, and the enterprise should reshape the corporate values, mission and vision around sustainable development. For example, Unilever's corporate purpose of "making sustainable living the norm" serves as the company's strategic guidance and business policyTencent has established "Technology for Good" as its corporate tenet to guide its business model exploration of sustainable social value creation.
"2" refers to two grippers. There are two basic and necessary tasks that companies need to do when implementing ESG, namely stakeholder analysis and identification of material issues. Through the analysis of stakeholders, we can understand the demands of employees, customers, consumers, communities, regulators, policies, natural ecological environment, partners, and businessmen for business activities. Materiality is to analyze these demands, such as the impact of the enterprise on society and the environment, and the impact of the environment and society on the enterprise, and combine the analysis of stakeholder demands and the priority options of response, so as to find the substantive issues that need to be solved urgently, and the establishment of substantive issues also finds the direction for the ESG focus and sustainable business strategy of the enterprise.
"3" means three "real" and stand, and enterprises must be real, pragmatic and down-to-earth in ESG construction. To be true is to understand what ESG really means for an enterprise, to understand it from top to bottom, and then to implement it from the bottom up, it is necessary to advocate and promote the establishment of an ESG practice program at the highest level. Pragmatism means that companies must find out what ESG footholds for their industries, markets, countries, and regions. Because each enterprise has different industries and different products, it faces different substantive problems and different solutions. After finding a solution that suits you, you also need to ensure that it can bring business value, otherwise it will become a pure public good, which is not sustainable. How to be practical?The ESG practice of the enterprise should be benchmarked against international, industry and national standards, so as to establish specific and quantitative indicators of the company's own operation and management, and measure and evaluate the progress of the process of achieving this target.
"4" is the "four elements of the enterprise": core values, main areas, key skills, and comprehensive resources. This is also what Lv Jianzhong has repeatedly emphasized, enterprises should use the four elements to find the social pain points related to them, the pain points of the ecological environment, etc., to find the real challenges and opportunities of the enterprise, and at the same time, to let the comprehensive resources and key skills of the enterprise effectively participate in the governance of these problems and grasp these opportunities. In this regard, Lv Jianzhong also proposed an applicable sustainable business strategy design model - "six-dimensional gem map" (sustainable business strategy system design model diagram), through the analysis of social pain points, and then establish business opportunities, compare in the industry, find applicable solutions or make breakthroughs and innovations under the premise that the industry does not have a solution, and then introduce the application plan into the actual application scenarios of multi-stakeholder relationships, demands, and writing "scenario planning" In this case, the ideal test and scenario planning are carried out in the application scenario composed of multiple stakeholders, and then whether the solution can be combined in the three dimensions of social value, environmental value and economic value, and finally implemented into the design of a sustainable business model of the enterprise.
"5" refers to the five steps of the closed loop of strategy implementation, so as to ensure that ESG is integrated into the production and operation activities of the enterprise. The first link is the entrance link of strategy, which must ensure that it can put the demands of stakeholders and the results of material analysis into the entrance end of enterprise strategic decision-making, so that enterprise strategic decision-making has both economic considerations, social and environmental considerations. The second link is to sink this strategy to business units and functional departments through decoding, which can be broken down into specific tasks and tasks that can be performed by each position and each process every day. The third step is to ensure that the achievement of these tasks is measured by value creation. The fourth link is that when these tasks become value realization, all data should be collected in a structured manner, sorted out in a structured and quantitative manner, and become the main content of corporate ESG information disclosure. The fifth link is to use the PDCA cycle method of lean management to adjust the ESG implementation strategy of the enterprise in a timely manner with the changes in the business environment and the change in the development stage of the enterprise.
By accurately grasping the above aspects, ESG can be implemented in the process of corporate strategic design and business activities, promote the sustainable development of enterprises, and create benefits conducive to social progress and ecological environment harmony while achieving corporate growth and development and obtaining corporate value.
For example, China International Marine Containers (Group) Co., Ltd. (hereinafter referred to as "CIMC"), its main business is to provide equipment and services around logistics and energy, and is practicing the above-mentioned aspects to integrate social value demands into the business segment of the enterprise. They have been doing social responsibility reports for 15 consecutive years to promote management, and they have been conducting stakeholder research reports every year, and then transforming the research reports into topics of concern to the board of directors, and then implementing them through the company's internal operation and management system. CIMC found that stakeholders were most concerned about issues such as green products and services, employees' health, environmental protection, energy conservation and emission reduction. CIMC combines the needs of the country, the pain points or shortcomings of the industry and its own advantages to combine the existing equipment business with fish farming, and does the sewage treatment of farmland through water treatment devices, saving one-tenth of the land area compared with traditional treatment methods, and at the same time, using 5G and Internet technology to form scientific feeding, and finally raising green and healthy freshwater fish.
In fact, the traditional era of evaluating the value of enterprises by a single financial performance is about to pass, and the thinking of entrepreneurs must be changed, from the unity of a single financial performance to the binary world of social logic and business logic to think about corporate strategy. In addition, the transformation and innovation of enterprises need to produce breakthroughs from the social problems that need to be solved urgently, which will bring unlimited innovation opportunities and value creation space in the process.