91���˰涶��

In business, results matter. But at what cost?

By considering the potential social, cultural and environmental impact of operations, leaders can make decisions that balance short-term results with long-term objectives. The AGSM 2024 Professional Forum assembled a panel of experts from the superannuation, technology and banking sectors to discuss how business leaders can play a role in building a more sustainable future.

Panel chair Richard Holden, UNSW Business School Professor of Economics, was joined by Richard Gibb, ANZ Group Board Non-Executive Director; Jonathan Rubinsztein, CEO of Nuix Global; and Aware Super CEO Deanne Stewart, CEO Aware Super. 

As environmental, social and governance (ESG) considerations extend beyond a mere box-ticking exercise, more organisations are seeing the value of doing good for a more sustainable future. Here’s an expert take on the leadership required for change.

Investing in a sustainable future

With the assets under management in the Australian superannuation pool nudging – almost two times Australia’s annual GDP – superannuation investment strategies are coming under more scrutiny than ever. Stewart said the industry, by its very nature, works by having a long-term focus.

“At the end of the day, our job is to get the best possible returns for our members for their retirement.”

As one of Australia’s largest profit-for-members industry super funds, Aware Super is renowned for its responsible ownership approach, which integrates ESG considerations into investment processes. 

From Aware’s perspective, companies and assets with sound ESG management are more likely to increase in value. Whereas companies that poorly manage ESG risks have the potential to destroy shareholder value and harm the broader community and environment. 

“If I think about the trade-off between short-term results and ESG, it’s ultimately thinking about what you want to invest in,” Stewart said. “You want to invest in an entity or a company that is managing its climate change risks, because that risk is one of the biggest risks in our entire portfolio.”

She also said more leaders are looking at their own legacy, weighing immediate gains with future goals, and that’s affecting the future of organisations beyond profits and returns. 

“More people think about the legacy they will leave behind. Are you going to be proud telling your family about the next quarter's shareholder returns, or are you going to be proud of the impact that you've had over a long period of time?”

When talking about the trade-off between “good and bad” and tackling big issues like environmental degradation and declining mental health, Rubinsztein said the onus was on government. 

“When talking about the environment, why would we allow new offshore gas drilling when we know that this is not good for the world? Whose job is it to define whether you can drill or not? And I think that's the government's job, defining that boundary.”

Once those boundaries are defined, organisations can decide where they can use their strengths to participate and make a difference. In the meantime, Rubinsztein wants leaders to understand that working to solve the world’s problems can be great for business.

Banking on a sustainable future

Having spent a successful career working in large banks around the world, and now sitting on the board of Australia’s second-largest bank by assets, Richard Gibb reflected on the shift in perspective on the importance of sustainability in banking and finance. 

“When I started in banking many years ago, words like sustainability, inclusion, resilience didn't exist,” he said. 

“More recently those words have real resonance and meaning in terms of how banks, and financial services firms more broadly, operate. It started as a bit of a box-checking exercise at many big organisations. But we're getting to a point where it is becoming an embedded and meaningful part of the way many companies operate.”

Gibb acknowledged a more recent pressure in banking and other sectors to operate more sustainably – pressure not just from shareholders but, more notably, from employees. When competition for top talent is fierce, it’s in companies’ best interest to take notice. And they are.