Sustainability
Trends 2023
A MESSAGE
FROM OUR CEO
U
pheaval in global markets, geopolitical discord, higher
inflation, and erratic monetary policy have had a
profound impact in the past year, creating appreciable
stresses on global economies. Many of these forces are
not new. We’ve withstood them before. But, even with the
prospect of slowing inflation, the path forward is uncertain.
Amidst this uncertainty, we are facing a world of constant
and often intersecting disruptions. Resilience remains our
key challenge and we need to strengthen our resilience
capabilities (in terms of our geopolitical, climate, food
and water, supply chain, and technology risks) beyond
a survival capacity to enable long-term, sustainable,
and inclusive growth.
Against this backdrop, the concerns that are central
to the sustainability agenda: corporate purpose, social
impact, stakeholder engagement, environmental practices,
geopolitics, and governance, are all intrinsically tied
to a company’s financial health, long-term survival,
and the potential for value creation.
Yet, we are entering a transformative phase in our
sustainability journey.
With three decades of experience in helping organizations
meet their sustainability goals, we see that today the
sustainability agenda is central to business competitiveness.
For global leaders across industries and geographies,
sustainability is integral to their organizational DNA. They
recognize the crucial connection between the well-being
of both people and the planet, and the prospects this
creates for businesses.
At AccountAbility, we guide our clients through the
fast-changing sustainability landscape, bringing into
focus the issues and priorities to which leaders must
pay close attention. Smart ideas, clear thinking, and
practical solutions to sustainability matters are central
to driving value and managing risk for organizations.
The Environmental, Social, and Governance (ESG)
landscape is evolving, underscoring the importance
of taking a holistic approach to the management of
ESG-related risks and opportunities.
Leveraging our global research and consulting experience,
AccountAbility has identified 7 Sustainability Trends that are
shaping the business landscape. To help organizations stay
at the forefront of these important developments, the report
explores each trend in depth, offers our leadership insights
on their implications for business, and delivers valuable
takeaways to help turn trends into sustainability action.
In a perfect world, corporate purpose, strategy, and
ESG would be approached sequentially. However, large,
established companies and those growing at pace operate
under a range of priorities, urgencies, and constraints,
and, as a result, they don’t have this luxury. Their business
reality is one of constant change, where everything must
happen – at once, and right now.
Consumers and society, as a whole, are expecting
more (and different) from business – in an atmosphere
of low trust and high expectations. This is compounded
by a pace of sustainability change that can be dizzying,
and sometimes confusing.
Yet, there is immense potential to advance the
Sustainability / ESG agenda with a careful consideration
of focus, balance, and engaged action.
Enough said.
SUNIL (SUNNY) A. MISSER
Chief Executive Officer
AccountAbility
Consumers and society, as a whole, are expecting
more (and different) from business – in an atmosphere
of low trust and high expectations ... Yet, there is
immense potential to advance the Sustainability / ESG
agenda with a careful consideration of focus, balance,
and engaged action.
1 ACCOUNTABILITY
CONTENTS
7 SUSTAINABILITY
TRENDS THAT WILL
SHAPE BUSINESS
IN 2023
A MESSAGE FROM OUR CHIEF EXECUTIVE OFFICER	 1	
NAVIGATING THE NET ZERO LANDSCAPE 	 3
Against an unprecedented volume of net zero commitments, what are the
risks for those that fail to act, and the opportunities for businesses to lead?
STAKEHOLDER ACTIVISM IS GETTING LOUDER 	 5
As businesses face increasing pressure to take a stance and demonstrate
actionable progress on a range of ESG issues, how best can leaders balance
this with the imperative to maximize shareholder value?
GEOPOLITICS: THE NEW “G” IN ESG 	 7
In an era of increasingly globalized business operations, how can
organizations address the outsized role that the new G (Geopolitics)
is playing in the business landscape?
BUILDING AN EFFECTIVE, FUTURE-FOCUSED BOARD 	 9
As demands and expectations shift, how best to equip future-focused
Boards to meet the requirements of the evolving business environment?
NEXT GENERATION ESG DISCLOSURE AND REPORTING 	 11
A shift from voluntary to mandatory ESG disclosure is set to heighten
attention on corporate sustainability disclosure practices. How will these
changes impact ESG reporting?
THE ROAD TO A SUSTAINABLE VALUE CHAIN 	 13
How can the integration of sustainability criteria into supply chains drive
organizational shifts towards a more context-aware and competitive value chain?
NATURE BASED ASSETS WILL DRIVE VALUATIONS 	 15
As nature-based assets are increasingly recognized for their significant
impact on valuations, what steps can companies take to achieve
nature-based performance goals?
REFERENCES	17
1
5
3
7
2
6
4
3 ACCOUNTABILITY
A
n unprecedented volume of
climate pledges, commitments,
and net zero targets have been
set, and over the next decade, net
zero opportunities may represent
over $1.2 trillion in market value.1
But in the
excitement to set net zero targets, many
companies have not successfully set
credible, supporting business strategies
or milestones to reach their climate goals.
Stakeholders have grown skeptical of
long-term targets—they expect relevance,
clarity, and accountability.
The pressure on organizations to
demonstrate progress towards net zero
targets has increased, globally:
•	 The UK government announced the
findings of a 2022 net zero review that
consisted of 52 roundtables across
industries, governments, and civil
society, and reaffirmed its transition
commitment and ambitions to the
“growth opportunity of the 21st
 century.”2
•	 In Europe, proposals have been
launched to kick start the “green
industrial revolution,”3
a movement
that aims to transform the continent
through a more sustainable and lowcarbon
economy that is propelled by
the development of renewable energy
sources, green technologies, and
other sustainable practices.
•	 The 2022 U.S. announcement of
the Inflation Reduction Act, which
aims to pour billions of investment
dollars and corporate subsidies into
renewable energy development, green
infrastructure, and other initiatives, is
currently the main driver of the U.S. goal
to reach net zero emissions by 2050.
“Net zero” – a balance between the
amount of greenhouse gases (GHG)
emitted into the atmosphere and the
amount avoided or removed from the
atmosphere – is achieved by reducing
current GHG emissions levels in
alignment with the pathways defined
in the Paris Agreement to limit global
temperature rise to 1.5°C by 2050.
Companies hoping to reach true net zero
are setting targets and mapping out clear
and actionable roadmaps to reduce their
GHG emissions across all 3 scopes:
•	 Scope 1 emissions from directly owned
or operated facilities or fleet vehicles;
•	 Scope 2 emissions from all purchased
forms of energy (e.g., electricity
generated by a municipality or regional
source but used by the company); and,
•	 Scope 3 emissions from the extended
value chain (from upstream suppliers
to downstream reaching markets)
Climate change is one of the most significant and complex
challenges facing society: it presents material risks for
businesses that fail to act, and remarkable opportunities
for companies that can establish themselves as
transparent decarbonization leaders.
1
NAVIGATING
THE NET ZERO
LANDSCAPE
2020 2023
OVER
40%(827)
of the world’s largest publicly traded
companies have set net zero targets,
up from 20% in December 20204
(The Net Zero Tracker)
ONLY
50%of companies with net zero targets
have a plan in place to reach
net zero that includes interim
GHG emission reduction targets5
(Oxford Net Zero Tracker)
ABOUT
2/3of companies with net zero targets
annually report their progress towards
emission reduction goals through
corporate sustainability reports6
(Oxford Net Zero Tracker)
47 SUSTAINABILITY TRENDS 2023
START YOUR
NET ZERO JOURNEY
ESTABLISH A BASELINE
The first step for any company is to accurately
map its emissions footprint across the three
scopes throughout its entire value chain,
upstream and downstream. This is key to
understanding opportunity areas, mapping
high emitting assets, suppliers, or sites, and
is a prerequisite to setting meaningful targets.
SET SCIENCE-BASED TARGETS
AND BUILD A ROADMAP TO NET ZERO
Developing a net zero strategy with science-based
targets means prioritizing emissions reductions
over carbon offsets and ensuring targets are in line
with climate science. A credible net zero strategy
is assembled into a roadmap with defined interim
targets as well as longer-term milestones and is
transparently communicated both internally and
to a company’s external stakeholder audiences.
INTEGRATE NET ZERO GOALS
INTO CORE BUSINESS STRATEGY
A company’s net zero roadmap should be
regularly and comprehensively reviewed by a
designated cross-functional leadership team to
assess progress towards goals and understand
where additional resources or recalibrations are
needed. Climate-related impacts to a company’s
core business strategy should be factored into
risk management, finance and capital planning,
operations, and other critical workflows.
TRANSPARENTLY DISCLOSE
RESULTS REGULARLY
Companies should continuously demonstrate
commitment and follow through by transparently
disclosing the results of periodic reviews of
progress towards their net zero goals. Many
frameworks and methodologies exist for credible
climate disclosures, and operationalizing a
robust climate disclosure program will position
companies for future regulatory developments
that make reporting mandatory.
THE WORLD IS MOVING CLOSER TO NET ZERO.
Companies that want to remain competitive and attractive to
investors must establish an externally validated path to reaching net
zero that is accompanied by an immediately actionable strategic plan.
The Science-Based Targets Initiative (SBTi), the most widely accepted and
“de facto” standard for net zero target-setting, defines the methodology,
criteria, and thresholds companies need to apply to credibly align
decarbonization targets with Paris-compliant 1.5°C pathways.
Achieving net zero by 2050 will not be easy. It requires careful
consideration, thoughtful planning, continuous monitoring and adaptive
management, and sufficient allocation of resources. The journey will be
more difficult for some industries, with different sets of tradeoffs evident
in the strategic roadmaps they establish, but the global imperative to
achieve emissions reductions and eventually reach net zero goals relies
entirely on the authenticity and accountability of our collective efforts.
CLIMATE EMERGENCIES CONTINUE TO RISE
While peer-reviewed data has shown the Earth gradually warming
over decades, the effects have been acutely felt with the recent
coverage of certain high profile and shocking climate emergency
events worldwide, such as the heavy flooding that killed 1,800 people
and displaced at least 8 million in Pakistan in 2022.7
In reality, a recent
report from the United Nations Office for Disaster Risk Reduction
revealed that 350-500 medium- to large-scale climate-related disasters
have taken place every year for the past two decades. This number
is projected to rise to 560 per year – averaging 1.5 medium- to
large-scale disasters per day – by 2030.8
BUSINESS IS TAKING ACTION
•	 Moody’s Corporation: Moody’s, a global integrated risk assessment
firm, accelerated its net zero target year from 2050 to 2040, a process
that was validated by SBTi. Key to the company’s path to net zero are
intermediate targets for Scope 1, 2, and 3 emissions and a plan to have
60% of its supplier network setting science-based targets by 2025.9
Moody’s is also in the process of developing a Net Zero Assessment
Framework that will score organizations on the strength of their carbon
transition plans through reviews of the appropriateness of their ambition
and implementation metrics.10
•	 AstraZeneca: Cambridge-based global pharmaceuticals powerhouse
AstraZeneca was one of the first seven companies to receive validated
net zero targets from SBTi. AstraZeneca’s Ambition Zero Carbon
program includes near-, intermediate-, and long-term targets for
emissions reduction with a clear pathway for reaching net zero by 2045.11
(New York Times)
The Top Climate Risks
Across the Globe by 2040
	Flooding
	 Heat stress
	 Water stress
	Wildfires
	 Hurricanes and typhoons
	 Sea level rise
5 ACCOUNTABILITY
C
onsumers, employees, and investors, globally, demand
corporate action on topics from climate change to workers’
rights, to racial inequality. How can businesses balance the
imperatives of maximizing shareholder value, addressing material
ESG issues, and demonstrating empathy and responsiveness to
diverse and emerging customer and investor viewpoints?
Young people increasingly prefer to work for, shop with, and
support companies that consistently take positions on and work
to address salient social and environmental issues like racism,
gender inequality, mental health, deforestation, Indigenous land
rights, and workers’ rights.15
Companies that do so have an
opportunity to strengthen their brand reputation and connect
with the next generation of socially conscious customers.
Employees are taking action within their own companies. There has
been a resurgence of unionization efforts in the United States at some
of the world’s biggest brands, like Starbucks, Walmart, and Amazon.
Analysts attribute the rise in worker activism in the U.S., where
unionization has historically been low, to the impact of COVID-19,
income inequality, and the widespread shortage of workers.16
Employees that were classified as “essential” during the pandemic
are pushing for wages, benefits, job protection, and work conditions
that better reflect their value to employers and to the global economy.
Shareholder activism is on the rise too: a record number of
shareholder votes on ESG issues like human rights; diversity,
equity, and inclusion (DEI); and environmental action were held
during the 2022 proxy season17
and this trend has continued into
this year. Predictions are being made that this will continue to
increase throughout 2023 as investors are increasingly leveraging
their influence to demand that companies act on ESG matters.18
Businesses continue to face increasing pressure on all fronts to take a stance
and demonstrate actionable progress on a range of ESG issues.
2
STAKEHOLDER ACTIVISM
IS GETTING LOUDER
57%OF GLOBAL GEN Z SURVEY
RESPONDENTS feel that brands have
more power to “solve social ills and
societal problems” than governments12
(Edelman)
A RECORD
282CORPORATE SHAREHOLDER VOTES
were held on ESG issues in the 2022
proxy voting season in the U.S.13
(Politico)
UNION APPROVAL
among American workers
is at its HIGHEST LEVEL
SINCE 1965
14
(Vox)
MAJORITY-SUPPORTED ESG
PROXY VOTE RESOLUTIONS 2015-2022
(Sustainalytics, Morningstar)
2015
10
5
10
15
20
NumberofResolutions
25
30
35
40
2016 2017 2018 2019 2020 2021 2022
2 4
4
4
6
9
6
8
5
3
16
10
2
14
6
5
2
4
7
2
4
Human Rights
Workplace Diversity & Pay Equity
Racial Equality/Civil Rights
Political Spending & Lobbying
Opioid Crisis & Gun Safety
Employment-Related
Climate Change & Environment
67 SUSTAINABILITY TRENDS 2023
Responding effectively to stakeholder
activism requires organizations to develop
regular, meaningful, balanced, and
transparent stakeholder engagement
strategies. Being prepared means being
proactive, understanding the trends that
shape activist campaigns, as well as the
positions held by critical stakeholders, and
having protocols in place for effective and
strategic action. While this is an important
first step to take, organizations must also
demonstrate the development of meaningful
programs in response to social issues.
ANSWERING THE CALL
ON SOCIAL ISSUES
The U.S. Supreme Court’s decision in
Dobbs v. Jackson—which overturned
federal protection of the right to access
an abortion—prompted outcry from many
across the United States and has had
ongoing ramifications. Though some
companies publicly opposed the decision,
others were more measured in their
response. Companies from a diverse set of
industries, like JP Morgan, Tesla, Amazon,
Netflix, and Walt Disney, modified their
health insurance policies to provide support
to their U.S. employees who may need to
access out-of-state abortion services.19
Broadening Horizons: Research
conducted by the Royal Society of
Chemistry in 2022 found that zero percent
of chemistry professors in the UK are
Black. To combat this racial inequality,
a group of leading biotechnology firms
in the United Kingdom joined together to
support diverse students in the chemistry
industry.20
Industry leaders including GSK,
Oxford Nanopore, Unilever, AstraZeneca,
and RSSL established their Broadening
Horizons mentoring scheme. The program
supports Black and ethnic minority students
by providing mentoring, internship, and work
placement opportunities to level the playing
field in the biotechnology industry.21
THE PRESSURE HAS
NEVER BEEN GREATER
FOR COMPANIES
to display genuine leadership on a
range of social issues—while balancing
the demands of people and profit.
From shareholders to employees to
customers, stakeholders are pushing
the organizations they engage with to
take a stand. Engage early and often
with the stakeholders relevant to the
business to maximize alignment with
employees, customers, and investors.
ENGAGEMENT BEGINS WITH A PLAN
AccountAbility’s AA1000 Stakeholder Engagement Standard (AA1000SES) is
the world’s most widely used and trusted stakeholder engagement standard.22
The four stages suggested by AA1000SES allow oganizations to understand,
evaluate, and respond to the demands of organizational stakeholders.
PLAN
Companies must develop a plan that addresses the full cycle of stakeholder
engagement in order to maximize effectiveness. To begin, profile all potential
stakeholders and map them based on business importance. Next, decide
on the level and approach of the engagement. Choose wisely based on the
goal of the engagement: every method will require a different level of time,
energy, and resources.
PREPARE
To prepare for the engagement, assemble the financial, human, and
technological resources required for implementation. Build capacity across all
participating team members to ensure every stakeholder feels empowered to
participate. This can be achieved through comprehensive training, and learning
and development opportunities for staff across all key aspects of stakeholder
engagement and empowerment. Finally, be attentive to the possible risks of
conducting an engagement—both for stakeholders and the organization.
IMPLEMENT
Once the groundwork has been set, it’s time to engage with stakeholders.
Invite all relevant parties to participate and communicate the intended
outcomes. During the engagement, set clear ground rules for participation
and document the proceedings. Decide how the organization will act on the
results of the engagement and share this action plan with stakeholders.
ACT, REVIEW, AND IMPROVE
Upon completion, continually monitor, evaluate, and learn from each engagement,
with the intention of building strong relationships and improving the effectiveness
of engagement practices. Act on learnings from stakeholders to demonstrate
a genuine commitment to their demands. To build greater credibility and trust,
publicly report on stakeholder engagement activities on a regular basis.
THE STAKEHOLDER
ENGAGEMENT PROCESS
(AccountAbility)
PLAN
PREPARE
ACT,
REVIEW,
IMPROVE
IMPLEMENT
7 ACCOUNTABILITY
(as measured by the monthly U.S. Federal
Reserve Index) substantially stifles private sector
technological innovation in favor of incrementalist
development projects, with correlated, measurable
reductions in financial returns to companies
and levels of scientific advancement.27
25%	 OF BOARDS ACROSS
	 THE WORLD regularly
consider geopolitical risk
according to a survey of
global executives26
(EY)
94%OF GLOBAL BUSINESS
EXECUTIVES SAID
their company had been impacted
by unexpected geopolitical risks
in the past 12 months25
(EY)
3
O
ver a year after the current
European conflict began, global
businesses and economies are
still navigating the disruption to critical
energy supplies and supply chains.
With increasingly globalized business
operations, companies are just as
exposed to geopolitical risk as nation
states themselves. How can businesses
address the new “G” (Geopolitics)
in ESG while maximizing resilience
to macro shocks and prioritizing
uninterrupted service delivery?
Geopolitics is already playing an
outsized role in the 2023 business
landscape. The World Economic Forum,
in its annual Global Risks Report, states
that we are standing “on the edge of
a low-growth and low-cooperation
era,” with more exacting trade-offs on
climate action, biodiversity loss and
ecosystem collapse, human rights
development, emerging technology
expansion, and future economic growth
impacting even shorter-term business
decision-making.23
Economic policy
will increasingly be used defensively
to build self-sufficiency over critical
resources – what Harvard Business
Review refers to as the “new national
security economy”24
– which will have
profound impacts on the deglobalization
trajectory and may ultimately contribute
to a prolonged, low-investment and
protectionist trade-policy era.
Business leaders should start
with updating and instilling a new, postglobalization
paradigm: geopolitical
competition for access to markets
is now a set of highly interrelated
challenges – tightened supply chains,
restrictive trade policies, changing
labor force dynamics, and more –
and obstacles cannot be viewed
independently or in isolation. Companies
need to ensure they have adopted the
necessary level of complexity in the
geopolitical analytical lens they apply
to decision-making on everything from
Board composition to the adoption
of new technologies. Business risk
must be managed holistically as
opposed to in functionary silos. This
will better position leaders to connect
evolving geopolitical dynamics to their
company’s comprehensive assessment
of operational, technology, reputational,
legal, credit, and other business risks
at regular and defined intervals.
In a post-globalization environment, geopolitics is a
crucial component within ESG frameworks, necessitating
the consideration of risk and uncertainty factors
in assessments and decision-making processes.
GEOPOLITICS:
THE NEW “G”
IN ESG
Even a
1% RISE IN LEVELS OF
GEOPOLITICAL RISK
87 SUSTAINABILITY TRENDS 2023
PREPARE FOR
GEOPOLITICAL RISK
MAKE GEOPOLITICAL RISK ANALYSIS ROUTINE
Real-time geopolitical developments can have a major
impact on an organization. Companies need to establish
regular, holistic risk tracking that identifies potential
future threats and integrates evolving geopolitical
dynamics into the organization’s comprehensive risk
assessment and strategy.
ASSESS GEOPOLITICAL RISK
THROUGH A TRIFOCAL LENS
Short, Medium and Long term – to ensure both
adaptability to fast-changing circumstances, and the
appropriate investments to become more resilient for
longer term shifts in global dynamics.
INCORPORATE GEOPOLITICAL RISK INTO
THE STRATEGIC PLANNING PROCESS
Geopolitics are everchanging, and companies should
have procedures in place to apply these dynamics
to its due diligence strategic and scenario planning
processes. Companies need to apply risk lenses to
everyday decision-making to position themselves
to commit to opportunities confidently.
MULTIDISCIPLINARY BOARDS AND
EXECUTIVES SHOULD BE ENGAGED
IN THE GEOPOLITICAL RISK REVIEW
Geopolitical changes can rapidly impact many
operational units and geographies in a business. To build
the readiness necessary to rapidly respond to detected
geopolitical challenges, companies need to evaluate
the expertise of its Board and its management to better
navigate political geopolitical complexity.
INCORPORATE GEOPOLITICAL RISK INTO
ENTERPRISE RISK MANAGEMENT FRAMEWORKS
Have in place a clear allocation of responsibilities
for management of this risk in accordance with the
three lines of defense model and the principles of
avoidance, mitigation, and management.
With this analytical muscle in place, companies can look
to building geopolitical resilience in other key areas of their
operations. Adding interdisciplinary expertise in both Board and
key leadership positions can help companies navigate political
complexity and add important nuance to urgent questions
facing the business, such as where to locate new manufacturing
facilities. Companies should review their due diligence and
scenario planning workflows to understand if geopolitical analyses
are properly integrated at levels reflective of their importance.
Surfacing potential concerns at earlier stages of a capital allocation
decision may allow for a more well-rounded consideration of its
risks and opportunities, provide a longer runway to seek external
guiding expertise or counsel, and avoid group overcommitment
to a project that can result from the sunk cost fallacy.
Global business is now being shaped by the “new national security
economy” and is transforming companies into unwitting geopolitical
actors. Recognition of the interrelatedness of these challenges
is a first step towards instituting a more holistic decision-making
approach, hiring the necessary expertise, and deploying effective
analysis of business opportunities that centers a geopolitical lens.
GLOBAL RESPONSES
•	 BlackRock: The global wealth manager BlackRock maintains
a Geopolitical Risk Indicator which captures the market’s
attention to constantly evolving geopolitical developments.
A useful tool for investors and business leaders alike, the
Geopolitical Risk Indicator details the top ten geopolitical risks
monthly and keeps track of significant events—like national
elections and central bank meetings.28
•	 Apple: In response to growing concerns about political risk
in the Asia-Pacific region, Apple announced plans to move
a significant volume of iPhone production from China to
India, and MacBook production from China to Vietnam. This
process of “friendshoring”, or redirecting portions of your value
chains to sites deemed “friendlier”, or less likely to experience
geopolitical risk, has been undertaken by several larger firms
with significant global footprints.29
RISK MANAGEMENT FRAMEWORK
MONITOR
MONITOR & REPORT
Actively monitor results,
manage performance,
and communicate
outcomes
IDENTIFY
Determine risks that
are most relevant
to the company
ASSESS
Analyze and assess
the likelihood, impact,
exposure, and
urgency of each risk
(qualitative and
quantitative assessment)
PRIORITIZE
Determine level of criticality and urgency
of each risk with a prioritization matrix
and allocate resources appropriately
RESPOND
Develop a risk
response plan
to effectively treat
and mitigate risks
RESPOND ASSESS
PRIORITIZE
IDENTIFY
(AccountAbility)
9 ACCOUNTABILITY
A
s the mandate of boards shifts,
directors must be equipped to
be leaders on a growing list of
environmental, social, and governance
topics. As the workforce itself grows
more diverse, board diversity has been
slowly catching up. Mandatory measures
to increase board diversity, globally, are
helping to accelerate this change—but
do they go far enough to ensure boards
are fit to confront the challenges they
face in the 21st
century?
An analysis of S&P 500 companies reveals
the number of female and non-white
directors is increasing steadily year
over year. A growing body of research
shows the link between diversity and
financial performance30
. New requirements
to disclose board composition and elect
“diverse” directors are gaining traction
in the world’s largest markets: from the
recently approved Nasdaq requirements
in the U.S. to the proposed rule in Brazil’s
B3, an increasing number of stock
exchanges are demanding that listed
companies diversify their boards.31
These requirements, however, typically define
“diversity” too narrowly, only considering
gender, race, and sexuality. While these
criteria are essential, ensuring diversity across
a wider range of material characteristics—like
age, professional background, disability,
socioeconomic background, and lived
experience—will be necessary to equip
boards to meet the demands of the
evolving business landscape.
Boards will need to ensure that they
demonstrate competencies fit not just
for the present but also future needs. As
organizations operate in a rapidly changing
world, new challenges will be faced.
There are already requirements for
expertise in areas such as geopolitics,
cyber security, and AI. ESG alone
has become a growing competency
requirement, as seen in the live debate
around the Board’s accountability for
sustainability performance, and thus, which
skills and experience should be recruited.
The Chief Sustainability Officer is
increasingly interacting with the Board of
Fortune 500 companies (e.g., Unilever32
).
Equally, organizations are seeing success
by following the more traditional route
of placing responsibility under the Chief
Financial Officer (CFO) role.33
There is no
“one size fits all” response, however, the
impending development and launching of
new standards for reporting, assurance, and
disclosure will amplify this debate further
and require Boards to take a decision on
their future governance arrangements.
AS OF MAY 2022,
27%of board seats globally
are held by women34
(Diligent)
had a professional background other
than former CEO, CFO, or COO35
(Diligent)
4
Corporate boards have long been expected to set a “tone at the top” for organizational
culture, modelling company values and sound business practices. Each director serves as
a “link” in the chain between the company’s core values and ultimate business performance.
BUILDING AN EFFECTIVE,
FUTURE-FOCUSED BOARD
46%OF NEWLY ELECTED
DIRECTORS IN 2022
OVER
70%come from a professional
background versus 15% from
blue collar backgrounds36
(KPMG)
OF BOARD
MEMBERS
107 SUSTAINABILITY TRENDS 2023
A COMPANY IS ONLY AS STRONG AS
THE BOARD MEMBERS ELECTED TO LEAD IT.
Each director serves as a “link” in the chain between the
company’s core values and ultimate business performance.
Focus on building a board that is diverse, committed to the
company, and experienced in a wide array of industries
and business functions—in short, strong enough to weather
whatever storms may come in 2023 and beyond.
MAKE BOARDS A
D.I.R.E. PRIORITY
Building a robust, skilled, and savvy board of
directors is essential for business success. At
AccountAbility we encourage leaders to apply
the D.I.R.E. Framework to attract a truly diverse
and effective board that will be able to navigate
the rapidly changing business landscape.42
DIVERSITY
Boards should have a range of thought,
experience, and characteristics to mirror the diverse
stakeholders, environments, and markets they
serve. With mandatory diversity and reporting rules
on the horizon, ensure your board is fit for the future.
INDEPENDENCE
Independence can be enhanced and
underpinned by regulation and legislation, but this
can often differ between jurisdictions. However,
the role of Non-Executive Directors in providing
independence is universal. It is essential for
the Board to put appropriate measures in place
to ensure that independence is maintained
and maximized for all Non-Executive Directors.
This could be achieved through:
•	 Appropriate term limits for
Non-Executive Directors
•	 A rigorous declaration/conflict of interest
process to alleviate any issues with prior
or existing relationships, and;
•	 Recruitment of Non-Executive Directors
with different perspectives and diverse
sector experience
REFRESHMENT
Continuous refreshment of board members and
committee appointments enables boards to have
fair, balanced, and differing perspectives. Undertake
frequent reviews of board effectiveness to ensure
each director is able to meet the demands of the
company’s evolving business landscape. Undertake
succession planning to guarantee that when
refreshment does occur, critical functions of the
board can continue uninterrupted.
EXPERTISE
A multitude of skillsets, professional backgrounds,
and functional areas makes for a strong board.
Every director’s unique experience can be an
asset to the organization. Regularly map the
current capacity and capabilities of the board,
identify potential gaps and ensure appropriate
development programs are in place to assemble
a board is fit for the present and the future.
(AccountAbility)
Organizations can effectively utilize three key governance levers – the
disciplined enforcement of term limits, regular capacity and capability
reviews, and relevant training and development.
GLOBAL BOARD DIVERSITY ON THE RISE
Goldman Sachs: Goldman Sachs is setting a new standard for
diversity leadership in financial institutions. In 2020, the bank announced
it would require the companies it takes public in the United States
and Western Europe to have at least two diverse board members.
The bank has helped place over 75 diverse board members since
launching this initiative. As part of their overall internal approach to
developing effective leaders throughout their organization Goldman
Sachs uses an expansive definition of diversity to evaluate potential
directors including work experience, military service, personal identity,
culture, and nationality.37
Lloyd’s of London: Lloyd’s established an ESG committee, which aims
to embed social mobility across the organization and the sector that it
operates in. This is facilitated by initiatives, such as opening opportunities
for internships for young people from lower socioeconomic backgrounds
to provide valuable work experience as well as encouraging the
participation in events such as the Dive in Festival, a global diversity
and inclusion festival for the insurance market.
UK Social Mobility Index: The UK’s Social Mobility Index, developed by
the Social Mobility Foundation, has been published each year since 2017.
Employer entrants have grown from 98 in the first year to 149 in 2022.
The index utilizes seven key criteria to assess the level of social mobility
representation by sector and by organization. Boards use this data
to ensure that equal opportunities are available for those from lower
socioeconomic backgrounds, particularly in more senior positions.38
UAE Securities & Commodities Authority (SCA): In 2021, the
United Arab Emirates Securities and Commodities Authority (SCA)
announced that publicly listed companies in the UAE must have at least
one female board member. According to the SCA, this move aims to
“empower Emirati women and encourage them to play a greater role
in the boards of directors of listed companies.”39
Since the rule was
announced in March 2021, the number of board seats held by women
in the UAE has more than doubled, increasing from 3.5% to 8.9%.40
<1%have a disability.41
(Statscan)
OF BOARD DIRECTORS
AND OFFICERS
11 ACCOUNTABILITY
	96%	 OF THE WORLD’S
LARGEST (G250) COMPANIES
report on sustainability or ESG matters45
(KPMG)
	64%	 OF COMPANIES
obtained some level of assurance
over at least some ESG information
in 2021, up from 51% in 201946
(IFAC)
5
R
egulators in the European Union,
the United Kingdom, and the
United States are in various stages
of implementing rules and legislation that
will require companies to disclose data
related to ESG performance and future
planning. Although the EU’s Corporate
Sustainability Due Diligence Directive
(CSDDD), Corporate Sustainability
Reporting Directive (CSRD), and Green
Claims Directive, and the proposed
Securities and Exchange Commission
(SEC) rule in the U.S. have significant
differences, each is designed to create
new ESG information requirements and
enable stakeholders to better understand
the material impacts of related risks
on companies across the world.43
These regulations, among many
others globally, will pose new, stringent
disclosure challenges for companies
that are not prepared. Those with a
formalized sustainability strategy, clear
governance framework, and established
ESG data management mechanisms
will be best equipped to comply.
The seismic shift from voluntary to
mandatory ESG disclosure will heighten
scrutiny on corporate sustainability
practices and the quality of ESG data.
Organizations will need to produce
more meaningful reporting in order
to meet new regulatory requirements
and demonstrate greater transparency
and accountability to stakeholders.
As ESG reporting becomes increasingly
standardized, mandated, and scrutinized,
the days of unsubstantiated,
marketing-driven sustainability reports
will shift to clearer and more consistent
accountability for commitments,
performance, and impact.
Similarly, credibility of the disclosed
data will become a key focus as
stakeholders, such as investors,
need to trust performance data being
reported. In a 2022 Global Investor
Survey, 87% of respondents said they
suspect that corporate sustainability
disclosures contain unsupported
sustainability claims.44
Reporting and disclosure of ESG matters have become
a business imperative as mandatory requirements
increase in some of the world’s largest markets.
NEXT GENERATION
ESG DISCLOSURE
AND REPORTING
	49,900	COMPANIES
are expected to report under the
CSRD, an increase of 422% from current
levels of sustainability disclosure47
(EY)
THE COSO INTERNAL CONTROL-INTEGRATED FRAMEWORK (ICIF)
As the importance of accurate and reliable sustainability reporting escalates, effective
internal control over sustainability reporting will be a necessity. The Committee of
Sponsoring Organizations of the Treadway Commission (COSO) is recognized as
a leading authority on internal control, and its Internal Control-Integrated Framework
(ICIF) has been widely adopted by organizations around the world. Through new
guidance on internal controls over sustainability reporting, COSO will be guiding
organizations in their journey towards establishing and
maintaining an effective system of internal control over
financial and sustainable business information.
127 SUSTAINABILITY TRENDS 2023
EMBRACE NEXT GENERATION SUSTAINABILITY REPORTING
REPORT SELECTIVELY AND STRATEGICALLY
More disclosure does not mean better disclosure. While you
may feel pressure to report against every standard and disclose
to every ESG service, it’s better by far to report and disclose
selectively based on your organization’s unique ESG profile,
goals, and maturity.
LET DATA LEAD SUSTAINABILITY STRATEGY
Mandatory reporting and disclosure will increase scrutiny on
businesses’ sustainability performance and strategy. Make sure
your company is collecting essential data and information on
sustainability topics to establish baselines for goals, metrics,
and future action. Your ESG strategy is only as strong as the
data and information that informs it.
MANDATORY REPORTING HAS COMMENCED
Though the SEC, CSRD, and CSDDD rules won’t all be in force
in 2023, being proactive will make the transition to high-stakes
mandatory reporting smoother the time comes. Review which
requirements will apply to your business to get ahead of the
curve on the next generation of reporting.
CONSIDER THE APPLICATION OF
ESG SOFTWARE AS APPROPRIATE
As ESG data/information becomes more complex,
organizations must take steps to efficiently capture, analyze,
and share their sustainability progress among stakeholders.
Increasing scrutiny and disclosure requirements add to the
urgency of achieving this in ways that have the flexibility
to respond to market and regulatory demands.
Technology, including the rapid rise of AI, has the potential to
significantly impact ESG reporting by improving data collection
and analysis, sustainability performance, and stakeholder
engagement. However, such technology is not a substitute
for human expertise and judgement, and companies must
continue to exercise due diligence in integrating technology
into their ESG reporting practices.
The right software for your company depends on the size
and complexity of your ESG program, the industry you are
operating in, as well as your budget. Prioritize your needs,
goals, preferred features, and look for a provider that
satisfies your needs.
PARTNER WITH ASSURANCE PROVIDERS
The SEC, CSRD, and CSDDD rules all require reports to be
independently verified to ensure accuracy and full compliance.
While companies are familiar with the auditing process for their
financial statements, assurance over ESG information may be
a relatively new undertaking.
Start navigating the assurance provider selection process
early so that you can rapidly find a provider who meets the
needs of your organization. You can also request an assurance
readiness assessment that helps you to understand the
required preparations needed to ensure readiness for future
assurance engagement.
THE ESG REPORTING CYCLEExternal third-party assurance is seen as a solution to
stakeholder mistrust, as the value of assuring non-financial
data is increasingly realized as comparable to that of
a financial audit.
For a long time, the amount of sustainability standards and
frameworks has been abundant, and companies have
found it challenging to understand this confusing landscape.
Companies and investors have called for simplification,
comparability, consistency, and usefulness of ESG
disclosures. As a result, ESG standards and frameworks
have undergone consolidation, and several new and specific
standards are being introduced in response to these
stakeholder needs.
The International Sustainability Standards Board (ISSB)
was formed, with the intention of reducing the multitude
of standards and frameworks by merging several existing
international frameworks such as SASB Standards, TCFD,
CDSB Framework, Integrated Reporting Framework,
and WEF Stakeholder Capitalism Metrics. The implication
is sustainability reporting that is more harmonized, and
reduction in the burden and complexity for companies.
Review and
benchmark
reporting
practices
Assess
reporting
readiness
and needs
Develop
reporting
theme,
roadmap and
protocols
Identify,
map and
engage
stakeholders
Select
reporting
frameworks
and
standards
Design
and produce
report
Assurance
preparation
and
evaluation
Determine
and prioritize
material
issues
Develop
report
narrative
and content
13 ACCOUNTABILITY
S
upply chains are inclusive
of all the required steps to get
a product to a customer. For
supply chains to enhance business
competitiveness and unlock additional
unrealized value – becoming a value
chain – they will need to incorporate
ESG principles to achieve greater
resilience and long-term viability. How
can the integration of sustainability
criteria into purchasing decisions,
contracts, and relationships drive
organizational shifts towards a more
context-aware and competitive
value chain?
Sustainable procurement, as the
primary operational intersection with the
upstream supply chain, drives progress
on organizational ESG goals by reducing
systemic risk and enabling greater
visibility over wholistic operational
inputs, such as Scope 3 GHG emissions,
materials sourcing origins, and supplier
human rights practices.
Supplier audits, codes of conduct,
and value chain mapping are integral
in enabling a business to increase its
level of enterprise-wide sustainability.51
Higher-capacity organizations with
broad supply networks should
consider adopting more forward-looking
engagement practices with suppliers.
Studies have shown that proactive
feedback loops, including training,
regular check-ins, and guidance for
suppliers on improving the sustainability
of their sourcing and production,
can successfully enhance supply
chain sustainability as a whole,
and help to manage and mitigate
organizational risk.52
As the complexity of regional geopolitics
also continues to grow, various spillover
effects into areas of material sourcing,
labor conditions, and movement of goods
will loom large over company decisionmaking
around its procurement channels.
Companies should set up proactive
internal monitoring systems to try to
anticipate political or legal responses to
geopolitical shifts and to consider near- or
friendshoring supply networks as needed.
Continuous effort to integrate
sustainable procurement practices into
an organization’s corporate strategy
and monitoring the implications
of geopolitical events can reveal
vulnerabilities to be mitigated, potentially
tighten or near-shore a company’s
supply network, and unlock value-add
Organizations must take a holistic approach to achieving a more sustainable supply
chain, incorporating ESG principles that build resilience and economic viability.
THE ROAD TO A
SUSTAINABLE VALUE CHAIN
74%OF COMPANIES SURVEYED
globally had a supplier code of conduct
in 2021, up from 64% in 201948
(Stanford Graduate School of Business)
51%OF COMPANIES SURVEYED
globally had a sustainable procurement
policy in 2021, up from 38% in 201949
(Stanford Graduate School of Business)
63%OF THOSE SURVEYED
globally believe risk mitigation
is a benefit from their company’s
sustainable procurement plans50
(Stanford Graduate School of Business)
6
147 SUSTAINABILITY TRENDS 2023
FORMALIZE YOUR SUSTAINABLE
PROCUREMENT PROCESSES & SYSTEMS
DESIGN A SUSTAINABLE PROCUREMENT STRATEGY
With lots of suppliers to manage, KPIs to track, and supply network locations to
prioritize, designing a supply chain sustainability program can be a daunting task. Start
by prioritizing the highest risk inputs and site locations in your supply chain and create
a matrix of sustainability criteria to evaluate performance of your existing supplier base.
This will allow you to understand the scope of adjustments needed and will provide
a basis for engaging with your supplier network to work towards improvements.
PILOT YOUR PROCUREMENT STRATEGY
With larger goals in mind, test your sustainable procurement criteria on a small
group of suppliers, and try to include at least two organizations with different
profiles (e.g., higher vs. lower capacity) to better anticipate the challenges of
operationalizing this system among a diverse supplier base. Running a pilot
program will allow you to understand the feasibility of implementing your
sustainable procurement criteria, and to make the necessary changes to
the approach with your corporate sustainability commitments in mind.
ACTIVELY ENGAGE AND COLLABORATE WITH SUPPLIERS
Healthy supplier relationships are the bedrock of any sustainable procurement
program. Proactively and regularly engage with your suppliers to make sure they
are aware of your organization’s ESG expectations and are equipped to respond.
Start by implementing a targeted engagement program with regularly planned
feedback opportunities between suppliers and your procurement personnel.
Target key or high impact suppliers for more intensive development as needed,
and institute supply chain improvement programs by setting agreed upon KPIs
with suppliers. Remember to reward progress.
MONITOR GEOPOLITICAL HEADWINDS
It is difficult to predict shifting political relationships and regional conflicts, but
companies must actively monitor developments to stay ahead of risks such as asset
deprivation or devaluation or soaring input costs. Companies should examine their
priority locations, weigh redistribution of their asset concentration to hedge against
deterioration risks, and conduct scenario planning to understand the economic
trade-offs of near- or friendshoring highly impacted portions of its supplier network.
GET SERIOUS ABOUT “SCOPE 3” EMISSIONS
Value chain emissions can make up 65-95% of most businesses’ total
emissions—and will only grow in importance as ESG-related non-financial
disclosures broaden and become more mandatory for larger companies with
expansive operations in Europe and the United States.60
Take action with your
suppliers now to ensure you have the systems and processes to gather the
necessary data, aassess the company’s Scope 3 impact, and to be better
positioned to report on and ultimately reduce your “Scope 3” emissions.
opportunities across the ESG spectrum.
Research indicates that companies that
prioritize sustainable and responsible
procurement practices enjoy higher
valuations than sector peers by as
much as 10%-20%.53
SUSTAINABLE
PROCUREMENT LEADERS
Philips: Health technology company
Philips has actively engaged with its
suppliers to help reduce emissions
across its end-to-end healthcare value
chain and obtained approval from the
Science Based Targets initiative (SBTi)
for CO2
emissions reduction targets
across Scopes 1-3. Through its active
supplier engagement efforts, 41% (based
on spend) of Philips’ suppliers have
also committed to managing emissions
against science-based targets, meaning
the company is well on its way to its
sustainability strategy goal of 50%
of its total supplier spend by 2025.54
Deutche Post DHL: Deutche Post DHL,
a German multinational package delivery
and logistics company, was recently
awared an EcoVadis 2023 sustainable
procurement leadership award for
“Best Value Chain Engagement.”
The award recognized the company’s
excellence in engaging partner networks
in sustainability initiatives and driving
internal engagement to strengthen global
sustainable procurement programs.55
The company has a clear strategy across
multiple pillars that drives its value chain
decision-making and has tied Board
and Executive compensation to the
achievement of sustainability goals.56
The Estée Lauder Companies:
Estée Lauder has been recognized by
EcoVadis for excellence in sustainable
procurement performance. The company
collaborates with its suppliers to advance
sustainability across the whole value
chain and supports partners on their
continuous improvement.57
Estée Lauder
has also advocated finding collaborative
approaches to co-create solutions for
reducing Scope 3 emissions in supply
chains.58
Its work on reducing climate
risk within its own supply chain has
been recognized by CDP that has
placed the company on its Supplier
Engagement Leaderboard.59
15 ACCOUNTABILITY
7
O
ver half of global GDP is
estimated to be linked to
ecosystem services62
, or the
benefits humanity derives from the
natural world, with efforts to centralize
the measurement of impacts on
nature taking on added importance. In
December 2022, following COP15, the
Kunming-Montreal Global Biodiversity
Framework was released, providing an
explicit imperative for businesses to act
on nature and contribute to progress on
respective national-level nature targets.
Nature-based assets, in the form of raw
material inputs vital to company products
and ecosystem services that impact
business operations will drive company
valuations and estimations of longer-term
business viability. These dependencies
on nature take center stage as research
shows the effects of business activity
challenging several existential tipping
points, such as permafrost, ice sheet
collapse, and tropical deforestation.63
While strides have been made in
historically prominent sectors to account
for issues of scarcity and nature impact,
such as oil and gas and minerals, the
business impacts on other natural
capitals, such as soil and water, have
received far less attention. Also absent
from balance sheets so far are company
impacts on biodiversity, which plays a
key role in the health and regenerative
capacity of ecosystems.64
Nature-focused stocktaking and
materiality analyses are essential first
steps for companies to understand which
impacts, dependencies, and geographies
are crucial to address. Companies can
then access methodologies, such as
the Capitals Coalition’s Natural Capital
Protocol65
, to assign values to natural
inputs and services to understand the
true cost of its operations. Supplementary
guidance to the Protocol is available for
financial institutions for portfolio analysis66
,
and the Natural Capital Finance Alliance
has also created specific step-by-step
risk assessment guidance on natural
capital for banks.67
There is a growing emphasis being
placed by investors and other
stakeholders on non-financial disclosures
and external target setting around nature.
The Science Based Targets Network
(SBTN)68
, the Taskforce on Naturerelated
Financial Disclosure (TNFD)69
,
and the Global Reporting Initiative (GRI)70
There is a hidden $145 trillion per year economy linked
to the air we breathe, the water we drink, the land we
inhabit, and the natural capital we depend on—but our
mismanagement of invaluable ecosystem services
is driving billions in annual declines.61
NATURE BASED
ASSETS WILL
DRIVE VALUATIONS
In a UN review, approximately
	25%OF PLANT AND ANIMAL SPECIES
STUDIED WERE THREATENED
WITH EXTINCTION72
(Intergovernmental Science-Policy
Platform on Biodiversity and Ecosystem Services)
	 $44 TRILLION
	 OF ECONOMIC VALUE—
	 MORE THAN HALF OF
GLOBAL GDP—is moderately
or highly dependent on
ecosystem services71
(World Economic Forum)
	 EXPOSURE TO RISK
	 DUE TO NATURE LOSS
	 is highest in India and Indonesia,
where highly dependent sectors
respectively comprise
33%and 32%of national GDP73
(World Economic Forum)
167 SUSTAINABILITY TRENDS 2023
have developed target-setting frameworks, nature impact measurement
methodologies, and reporting standards for businesses to manage their
nature footprint. A commitment to transparent disclosure and nature
management will position companies in advance of future mandatory
reporting on nature, which has already arrived for some companies
operating in Europe.
Market perceptions of nature and biodiversity are shifting dramatically
as new valuation methodologies and frameworks enable organizations to
realize the true size and value of the ecosystems that underpin the global
economy. Companies will need to define the impacts and dependencies
they have on nature across their value chains with the aim of minimizing
negative impacts and disclosing nature management steps. As the Earth’s
systems continue to experience painful transition effects that directly
touch humanity’s quality of life, companies will be expected to take
on a proportionate role in addressing these joint challenges.
TARGETED NATURE-BASED REPORTING
Science Based
Targets for Nature
(SBTN)
Taskforce on
Nature-related
Financial Disclosure
(TNFD)
GRI Biodiversity
Standard (GRI)
Equips companies
and cities to set
science-based
targets for water,
land, biodiversity,
and ocean
Enables organizations
to report and
act on evolving
nature-related risks
Enables organizations
to disclose their most
significant biodiversity
impacts and how
they are managed
TAKE ACTION TO
ACHIEVE NATURE BASED
PERFORMANCE GOALS
REVIEW AND CALIBRATE AGAINST LEADING
GLOBAL BIODIVERSITY FRAMEWORKS
The Kunming-Montreal GBF is a landmark
international pact coming out of COP15 in 2022
that aims to serve as the unifying driving effort to
halt and reverse biodiversity loss by 2030.74
Dubbed
“the Paris Agreement for biodiversity,” the GBF calls
on businesses to monitor, assess, and disclose
their impacts on biodiversity, and notes their
crucial roles in helping nations meet nature targets.
MAP MATERIAL IMPACTS AND
DEPENDENCIES ON NATURE
While measurement of nature impacts and
dependencies can feel like a daunting task, there
are many “no regrets”75
actions that businesses
can take as they prepare for broader and more
formalized voluntary and regulatory-driven
disclosure needs. Companies should undergo
a nature-focused materiality assessment process
that maps material impacts and dependencies
on nature and helps prioritize key value chain
sites where effects are greatest. This will arm
your company with a holistic understanding of its
material engagement areas as it prepares to take
further steps towards nature-positive management.
COMMIT TO ONGOING MEASUREMENT
AND TRANSPARENT DISCLOSURE
Commitment to establishing continuous
measurement processes to assess your
company’s nature impacts and dependencies
and transparently disclosing the results of your
company’s nature footprint signals marketplace
leadership in a rapidly emerging area of investor
interest. Understanding your company’s
nature-focused materiality concerns and
high-priority geographic contexts also positions
you well for understanding data collection and
analysis needs, and will allow you to lay the
groundwork for disclosures that may become
mandatory through future regulatory action.
NATURE BASED PERFORMANCE
IS NOW INTRINSICALLY A PART
OF CORPORATE SUSTAINABILITY
REPORTING AND ASSET VALUATION.
Assigning value to biodiversity, land, and
water can help companies understand hidden
nature dependency costs associated with their
services and recognize risks to longer-term
business viability.
ACCOUNTABILITY IS PARTNERING WITH
THE ACCOUNTABILITY ACCELERATOR
OF THE GLOBAL COMMONS ALLIANCE
to develop a navigation tool that synthesizes leading naturepositive
guidance resources and nature disclosure instruments
for companies to simplify the journey to taking action on nature.
Available in Summer 2023, this guide aims to drive corporate
accountability for nature action by driving awareness of the
landscape of nature management tools and disclosure instruments.
1
Assess
2
Interpret
& Prioritize
3
Measure,
Set &
Disclose
4
Act
5
Track
• Materiality
screening
• Value chain
assessment
• Determine
target
boundaries
• Interpret
& rank
• Prioritize
• Evaluate
feasibility&
strategic
interest
• Model selection
through
stakeholder
consultation
• Measure
baseline values
• Determine
maximum
allowable
pressure
• Set targets
• Avoid
• Reduce
• Restore &
Regenerate
• Transform
• Monitor
• Report
• Verify
A TARGET SETTING PROCESS
(Science Based Targets Network)
1.	NAVIGATING THE NET ZERO LANDSCAPE
	 PAGES 3-4
1
	EU Commission, https://commission.europa.eu/strategy-
and-policy/priorities-2019-2024/european-green-deal/
green-deal-industrial-plan_en
2
	UK Government, Responding to the Independent Review of
Net Zero’s Recommendations (publishing.service.gov.uk)
3
	Reuters, EU announces plans to lead green industrial
revolution | Reuters
4
	 Net Zero Tracker, https://zerotracker.net/
5
	Net Zero Tracker,
https://zerotracker.net/analysis/net-zero-stocktake-2022
6
	Net Zero Tracker,
https://zerotracker.net/analysis/net-zero-stocktake-2022
7
	Center for Disaster Philanthropy,
https://disasterphilanthropy.org/disasters/2022-pakistan-
floods/#:~:text=Key%20facts,million%20people%20
require%20humanitarian%20assistance.
8
	UN Office for Disaster Risk Reduction, https://www.undrr.org/
gar2022-our-world-risk#container-media
9
	Science Based Targets Initiative,
https://sciencebasedtargets.org/companies-takingaction/
case-studies/net-zero-case-study-moodys
10
	Moodys, https://live.moodys.io/2022-11-miu19885-request-
for-feedback-net-zero-assessments-for-non-financial-
corporates#about-tab
11
	Science Based Targets Initiative,
https://sciencebasedtargets.org/companies-takingaction/
case-studies/net-zero-case-study-astrazeneca
2.	STAKEHOLDER ACTIVISM IS GETTING LOUDER
	 PAGES 5-6
12
	Edelman, https://www.edelman.com/trust/2022-
trustbarometer/special-report-new-cascade-of-influence
13
	Politico, https://www.politico.com/newsletters/
thelong-game/2022/07/28/shareholder-activists-
makeinroads-00048445
14
	Vox,https://www.vox.com/recode/2022/8/30/23326654/2022-
union-chartselections-wins-strikes
15
	Edelman, https://www.edelman.com/trust/2022-
trustbarometer/special-report-new-cascade-of-influence
16
	Vox,https://www.vox.com/recode/2022/8/30/23326654/2022-
union-chartselections-wins-strikes
17
	Politico, https://www.politico.com/newsletters/
thelong-game/2022/07/28/shareholder-activists-
makeinroads-00048445
18
	Conference Board, https://www.conference-board.
org/topics/shareholder-voting/2023-proxy-season-
preview-compromise-and-conflict-ahead#:~:text=In%20
fact%2C%20the%202023%20proxy,aims%20to%20
change%20corporate%20strategy.
19
	New York Times, https://www.nytimes.com/2022/06/24/
business/abortion-roe-wade-companies.html
20
	Royal Society of Chemistry, https://www.rsc.org/
newperspectives/talent/racial-and-ethnic-inequalities-in-
thechemical-sciences/
21
	Royal Society of Chemistry, https://www.rsc.org/newsevents/
articles/2022/sep/broadening-horizons-launch/
22
	AccountAbility, https://www.accountability.org/standards/
aa1000-stakeholder-engagement-standard/
3.	GEOPOLITICS: THE NEW “G” IN ESG
	 PAGES 7-8
23
	World Economic Forum, https://www.weforum.org/reports/
global-risks-report-2023/digest/
24
	Harvard Business Review, https://hbr.org/2022/11/how-
companies-can-navigate-todays-geopolitical-risks
25
	EY, https://www.ey.com/en_jo/geostrategy/theceoimperative-
how-will-the-shifting-world-order-affectyourglobal-strategy
26
	EY, https://www.ey.com/en_jo/geostrategy/theceoimperative-
how-will-the-shifting-world-order-affectyourglobal-strategy
27
	Harvard Business Review, https://hbr.org/2022/03/
research-when-geopolitical-risk-rises-innovation-stalls
28
	BlackRock, https://www.blackrock.com/corporate/
insights/blackrock-investment-institute/interactive-charts/
geopolitical-risk-dashboard#risk-summary
29
	New York Times, https://www.nytimes.com/2022/09/01/
business/tech-companies-china.html
4.	BUILDING AN EFFECTIVE,
FUTURE-FOCUSED BOARD
	 PAGES 9-10
30
	McKinsey, https://www.mckinsey.com/~/media/mckinsey/
featured%20insights/diversity%20and%20inclusion/
diversity%20wins%20how%20inclusion%20matters/
diversity-wins-how-inclusion-matters-vf.pdf
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	 PAGES 13-14
48
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49
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50
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51
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REFERENCES
17 ACCOUNTABILITY
ACKNOWLEDGEMENTS
This report was thoughtfully researched, reviewed, and compiled by a cross-functional AccountAbility team led by
Sunil (Sunny) A. Misser, CEO; Daniel (Sherpa) Metzger, Associate Director; Peppi-Emilia Airike, Head of Standards
and Research; Jon Packer, Head of Marketing and Communications; Sarah Fuller, Advisory Manager;
Thomas Mytton, Advisory Manager; Joshua Solomowitz, Senior Associate; and Julia Short, Research Associate.
Design by Campbell Symons Design.
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