June 9, 2025 • 25 mins
If you work in sustainability or ESG, you’re already grappling with a rapidly evolving regulatory and policy landscape, all while proving the ROI of your sustainability strategy. What other crucial issues should sustainability executives prioritize for the remainder of 2025?
Join Steve Odland and guest Andrew Jones, PhD, principal researcher at The Conference Board Governance & Sustainability Center, to find out how AI is affecting sustainability work, the importance of .css-j9qmi7{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:row;-ms-flex-direction:row;flex-direction:row;font-weight:700;margin-bottom:1rem;margin-top:2.8rem;width:100%;-webkit-box-pack:start;-ms-flex-pack:start;-webkit-justify-content:start;justify-content:start;padding-left:5rem;}@media only screen and (max-width: 599px){.css-j9qmi7{padding-left:0;-webkit-box-pack:center;-ms-flex-pack:center;-webkit-justify-content:center;justify-content:center;}}.css-j9qmi7 svg{fill:#27292D;}.css-j9qmi7 .eagfbvw0{-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;color:#27292D;}Mark as PlayedTranscript
Episode Transcript
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Steve Odland (00:00):
Welcome to C-Suite Perspectives, a signature
series by The Conference Board.
I'm Steve Odland from The ConferenceBoard and the host of this podcast series,
and in today's conversation, we're goingto talk about the top 10 sustainability
priorities for the rest of 2025.
Joining me today is Dr. AndrewJones, principal researcher at
our Governance & SustainabilityCenter at The Conference Board.
(00:23):
Andrew, welcome back.
Andrew Jones (00:25):
Thanks so much, Steve.
Always a pleasure to be with you.
Steve Odland (00:27):
So we're going to do this top 10 in reverse order, Andrew.
And starting with number 10, whatis the number 10 priority for
sustainability executives in 2025?
Andrew Jones (00:37):
So we think the number 10 priority is AI, artificial intelligence.
So I think we all know that companiesare obviously investing so much in AI,
it's a time of accelerating AI adoption,but it also has big opportunities to
advance sustainability goals whilealso introducing some risks, as well.
Steve Odland (00:55):
Tell me how AI works in the sustainability world.
Andrew Jones (00:58):
I think it's interesting cause obviously,
sustainability and ESG, they areinherently data-driven disciplines.
They've been built on thecollection of large data sets across
operations and suppliers, emissions,resource usage, energy, et cetera.
So companies alreadygathered this data, right?
So there's a big opportunityto apply AI to that data.
And I think we're seeing signs ofcompanies really starting to use AI
(01:19):
to advance their sustainability goals.
And I think an obvious one isregulatory compliance and reporting.
We know that AI tools can streamlinethe preparation of reports and
ensure consistency, but there's alsosome really interesting, innovative
approaches emerging where it'saround analyzing big data sets.
So, for example, looking at big emissionsdata sets or big water usage data
sets to really identify opportunitiesfor efficiencies and optimizing and
(01:42):
looking across the supply chain.
So there's some really excitinguse cases of AI emerging when it
comes to sustainability, Steve.
Steve Odland (01:49):
Yeah, so those sound, not the really advanced kind of AI tools,
more of the normal kind of analyticaltools: large language models, data
analysis tools and that sort of thing.
Andrew Jones (02:01):
That's right.
Yeah, I think, as you say, theobvious use cases for AI, we're
seeing across functions and acrossdisciplines where it comes to reporting,
communications, data analytics.
But also, yes, some more advanced,cutting-edge science, where it's
around scenario modeling and looking,for example, modeling extreme
weather events or climate risks.
Or even developing moreoptimized packaging and products.
(02:22):
I think there's a lot more tocome in this area, for sure.
Steve Odland (02:26):
All right, moving on then.
What's the number nine priority forcompanies' sustainability efforts.
Andrew Jones (02:32):
So number nine is communicating and storytelling,
and specifically, telling yoursustainability story in a way that
resonates with key stakeholders.
And that includes some of thelongstanding key audiences like
investors and regulators, butalso broader spectrum, including
employees and consumers and users.
Steve Odland (02:51):
Yeah.
You don't think of storytellingas in sustainability in the same
sentence, but you've written on this.
And it is interesting, becauseevery company has a different set of
objectives, they're in a differentindustry, they've got different issues.
And so explaining to their constituentswhat that package of issues are and
(03:12):
how they're addressing it becomeskey to the success of their efforts.
Andrew Jones (03:17):
It really does.
I think that's really nicely put, whereyeah, there's this different kind of, I
guess there's a different constellationof stakeholders around each company.
And obviously they vary bypositioning and market and industry.
And we know, for example, investors andregulators have been seeking consistent
materiality, focused disclosures,and progress against targets.
(03:38):
But on top of that, there's also, Ithink there is this need for more
thoughtful and creative storytellingwithin those parameters that does
really tell what the company's doingwhen it comes to innovation and
strategy and long-term value creation.
I think this can be a reallyimportant tool for competitive
advantage and differentiation.
Steve Odland (03:57):
Yeah.
And they don't teach storytellingin law school or finance school.
So this takes a differentmuscle when you're thinking
through how to present this.
Everybody is focused on frameworksand the data, as you said before.
And so it really requires communicationskills and therefore, some
cross-functional work across the C-Suite.
Andrew Jones (04:17):
It really does.
And I think you're right that thisdoesn't necessarily always come
naturally in this kind of field, though.
It is a field that, particularly for thelast few years, has been dominated by data
and assurance and harmonized frameworksand consistent disclosure metrics.
And I think, yeah, there's a realopportunity to humanize some of that
messaging and pair that hard datawith case studies and testimonials
(04:38):
and stories of transformation.
And that clearly does require input frommarketing, from communications, from
the experts who do that day in, day out.
Steve Odland (04:46):
Yeah.
And it's far easier to listento as one of the constituents
than just simply reading tables.
Andrew Jones (04:51):
It really is.
Yeah, it really is.
And I think numbers alone, particularlywhen they're big, abstract numbers
don't always resonate, for sure.
Steve Odland (04:58):
Yeah.
Number eight on our hit paradeof sustainability priorities.
Andrew Jones (05:04):
So this is an interesting one.
Number eight is integratingsustainability into the business.
So particularly, as sustainabilityhas matured as a discipline there's
this sort of ongoing drive across manyindustries to embed sustainability
more into the core business.
And what we mean by that is really theday-to-day operations, the culture.
So it's not a sort of siloed sideinitiative, but it really is part and
(05:27):
parcel of the fabric of the business.
Steve Odland (05:31):
And you've written about this, too, that when
sustainability efforts startedin companies, people hired an
expert or an outside firm to do it.
But it was basically, youguys go over there and put the
metrics together or whatever.
Now people are realizing that,OK, you can't just do that.
If you're going to make progress,you have to link your strategic
(05:54):
plans, your long-term strategicplans, and every element of it
with your sustainability goals.
Because the actions, or the tactics, thatneed to be driven through the organization
cover so many different areas.
And so this is what you mean by,the integration of sustainability
into the plan and into thefabric of the organization
Andrew Jones (06:16):
Yeah, so nicely put, Steve.
Yeah, it's really that, that closerlinkage to where it's like in enterprise
risk management or supply chain strategy,product development, financial planning,
the really core of the business, right?
Where, as you said, sustainability perhapsdidn't always play, didn't always interact
because of the history of the function,I guess, it being a sort of more recent
function in looking at the longer term.
(06:37):
But it's worth saying companieshave made some big strides here.
And actually, in a survey we did just lastyear, we found only 7% of sustainability
leaders felt they were fully integratedinto the strategy and operations.
I think that makes sense.
There's still some work to go,but more than 60% felt they
were moderately integrated andmoving in the right direction.
I think there's been alot of progress here.
I think companies are now grapplingwith how do you move to the next phase?
(06:59):
How do you really have the right—whetherit's the right team structures, the
right governance processes, the rightoversight mechanisms in place to
really drive that to the next level.
Steve Odland (07:10):
Number seven on our list of priorities for sustainability executives.
Andrew Jones (07:16):
So number seven is something that I think is gradually
moving up the list here on here, which isbiodiversity, along with natural capital.
And what we mean by biodiversity isbiological diversity, the variety of
all living things on earth that underunderpin the health of the planet.
And I think there's been a lotof traction in this space, right?
There's new regulations coming in,there's new disclosure frameworks.
I think general awareness has really
(07:37):
increased of
the critical nature of biodiversity and underpinning,
I guess, not just business,but the whole global economy.
So there's a lot of action on this front,
for sure.
What does biodiversity mean to you
Steve Odland (07:50):
when you're thinking about sustainability in a corporation?
I understand if you're a biologistor a botanist, but in a corporation,
you scratch your head a little bitwhen you talk about biodiversity.
Andrew Jones (08:01):
It's a good question, cause it can appear, it can feel quite
abstract, it can feel quite scientific.
But I think biodiversity and,particularly, the loss of biodiversity,
loss of species variation, it hasreally direct effects on the economy,
on the environment, where it'sperhaps exacerbating climate change.
And there's also some really bigsocial impacts where it comes
to loss of industries, lossof livelihoods, loss of jobs.
(08:23):
And biodiversity is really critical forthe food we eat, the water we drink,
cutting-edge medicines and science.
Actually, the business caseof biodiversity is, I think,
becoming more and more compelling.
It's becoming more direct, andit's clearly not diminishing.
And actually I think there's a strongargument that companies should be
focusing on biodiversity, perhaps justas much as they should be on climate.
Steve Odland (08:45):
And so what are the steps that you're
recommending that companies take?
Andrew Jones (08:49):
So I think what we're really seeing is, first of all, adoption
of an alignment with some of thesenew frameworks that are coming in.
There's a lot of new regulations, onboth the US and particularly in Europe,
and new disclosure frameworks, andwe're seeing some early movers starting
to adopt those, really starting totrack the sourcing of some of their
commodities in their supply chains.
I think, in addition to that first piece,I think we're also seeing companies
(09:10):
perhaps being more proactive and reallydeveloping specific measurable goals,
whether it's ecosystem restoration orconservation or land use management.
We're seeing some proactivepartnerships with local communities,
with conservationists, with Indigenouscommunities who are often affected by
biodiversity loss, and ongoing supplychain mapping, really tracing by supply
(09:31):
chain impacts on biodiversity hotspots.
So there's a lot of thingscompanies can do in this space.
I think it probably starts reallywith just developing that strategy and
not just looking at this in terms ofdisclosure, but as a strategic exercise.
Steve Odland (09:42):
And every company in the food chain needs to be involved
with this because if we start losingthat biodiversity, you're narrowing
the options for feeding the planet,and that would be disastrous.
Andrew Jones (09:55):
Yeah, completely.
And while biodiversity losscan impact on all industries.
I think it's particularly notable in foodand beverage, agriculture, and related
industries for the reason you've laid out.
Steve Odland (10:06):
Number six on our hit parade of sustainability priorities.
Andrew Jones (10:11):
So I think, continuing the previous point's focus on
nature, number six is water.
And specifically, waterstewardship and scarcity.
And I think this is anotherone that's rising up the list.
And Steve, our C-Suite Outlooksurvey earlier this year, we actually
saw water really rank highly asan environmental concern for.
For all CEOs, but particularly CEOsin the US, which I think just reflects
(10:32):
rising risk of water scarcity anddifficulties around water management.
Steve Odland (10:37):
Yeah.
And human beings can go for a whilewithout food, but they can't go for
a while without water, nor can anyof our biodiverse species, whether
they are plant life or animal life.
So this is really the common denominator,and freshwater is obviously key to that.
Whereas most of the Earth's crust iscovered by saltwater, it's freshwater
(11:00):
that sustains life, outside of ocean life.
So you have a changing climate andareas that are becoming more and more
arid, really an important subject.
Andrew Jones (11:10):
It really is.
And I think we're really seeingit move up the list when it comes
to sustainability priorities.
It's an escalating concern, particularlyin those regions that perhaps are arid
or have experienced water scarcityand water risks in recent years.
Thinking, again, similar industries tothe previous point: agriculture, food and
beverage, also technology, and huge usageof water and cooling and data centers.
(11:31):
And I think the combination, thereal perceived risk, along with
investor expectations and physicalconstraints and regulatory risks,
are pushing this into a top tierof material sustainability issues.
Steve Odland (11:42):
And there's also use issues.
When the Colorado River ran dry, forpeople downstream, that was catastrophic.
So how do you advise companiesto engage on this issue?
Andrew Jones (11:54):
So I, I think companies can really start
by, obviously, mapping, right?
Conducting those water risk assessments,mapping and assessing their operational
and supply chain exposure to water stress.
And that includes asort of the basin level.
And I think for those companiesthat are really at risk or are in
water-scarce areas, it then becomes anissue of setting those science-based
targets, implementing processes.
(12:15):
And then there are many water-usereduction and recycling issues companies
can pursue, including closed-loop systemsand optimized cooling and all these
kind of exciting innovative processes.
And also in collaboration, right?
There's clearly a huge need forengaging with local government and
communities and other firms to managewater resources in a sustainable way.
Steve Odland (12:38):
We're talking about sustainability priorities
for the balance of 2025.
We're going to take a shortbreak and be right back.
Welcome back to C-Suite Perspectives.
I'm your host, Steve Odland, fromThe Conference Board, and I'm
joined today by Dr. Andrew Jones,who's the principal researcher at
the Governance & SustainabilityCenter of The Conference Board.
OK, so Andrew, we're halfway there.
(13:00):
We've gone through number six through 10.
Let's kick off the second halfhere with priority number five
for sustainability executives.
Andrew Jones (13:10):
So priority number five, I think is something that's been top of mind
for many people the last few months, whichis supply chains and, specifically, supply
chain transparency and sustainability.
And this is, I think, has beenan increasingly a focal point
for sustainability leaders inrecognizing that for many companies,
the majority of environmental andsocial impacts often occur outside
the direct operations, right?
They occur in their supply chains, whetherthose are emissions or human rights
(13:34):
issues or sourcing and manufacturing.
So this is top of mind formany sustainability leaders.
Steve Odland (13:39):
Yeah.
And so again, what would you recommend,what steps that companies should take?
Andrew Jones (13:44):
So it's interesting because I think there is, similar to
previous questions, there's been abig regulatory push in this area for
human rights and environmental duediligence in global supply chains,
including new laws coming out of Europe.
So I think again, perhaps, first stepis to assess your regulatory exposure
and where you need to be compliant andwhat directives are coming and what
regulations are coming down the pipeline.
(14:05):
I think on top of that, then it'sreally maybe identifying, assessing
and identifying, the key risksin your specific supply chain.
And that will obviously vary by companyand industry and footprint, but for
many companies, that seems to be somecombination of Scope Three emissions,
value chain emissions, also supply chaintraceability when it comes to human rights
(14:26):
and labor issues, child labor, and so on.
So there's a wide range of areas wherecompanies are at risk here, from a
reputational, legal financial perspective.
And companies are really, I think,developing new ways of mapping their
supply chains and engaging with theirsuppliers and building the capacity
of their suppliers to really increasetheir visibility into these issues.
Steve Odland (14:46):
Yeah, and you need supply chain resilience.
We've learned this with some of thegeopolitical issues that we've had.
We've also learned this over andover again with disaster-recovery
issues, whether it's hurricanesor tsunamis or tornadoes or these
weather events or earthquakeswhere the supply chain is risky.
I remember one company who, I don'tknow why, built a data center right in
(15:07):
the landing path at Atlanta HartsfieldAirport, and you kinda look up and you
go, that's really probably not a verygood place to put that data center.
But you have to think through all theaspects of the supply chain and the
potential gray and black swan optionsthat could come down the road, and
make sure that you're hardening andmaking your supply chain resilient.
Andrew Jones (15:28):
You really do.
It's a really fascinating example, andfor me, it just perhaps underscores
how a broad holistic ESG perspectivecan be really helpful here.
Both in terms of integrating thatinto supply chain planning and
investments, and also on the samehand integrating supply chain
considerations and tariff considerationsand trade restriction considerations
into the ESG and sustainabilitystrategy at the same time, as well.
(15:50):
Yeah, this is a fascinating area, and Ithink we'll continue to see a lot of focus
on this, given some of the geopoliticaldevelopments we've seen recently.
Steve Odland (15:57):
Number four in our list of priorities.
Andrew Jones (16:00):
So number four is, I think, one of the most persistent
areas of sustainability strategies,which is climate, climate strategy.
And we all know that climate change isa longstanding sustainability priority.
It's seen as material andmultidimensional risk for most, if
not all, businesses in some way.
And it intersects across financialrisk and regulatory compliance.
(16:21):
And it remains a core area of focus.
And as companies have done a lot onclimate in the last few years, whether
it's building capacity to track andmitigate their emissions or assessing
their various risks and implementingnew strategies, this continues to be
top of mind for sustainability leaders.
Steve Odland (16:36):
Yeah.
And I think we got waylaid for a whilein this whole argument about manmade
global warming and is it or isn't it?
And that isn't the question.
The issue is the climate's beenchanging since the Earth was formed,
and it's going to continue to change,whether it's exacerbated by man's
influence on the Earth or not.
(16:58):
And the point here is companies needto look at what they're doing and their
impact on it and try to mitigate that.
Andrew Jones (17:08):
Yeah, putting those kind of debates, which can become
politicized, they can becomeunhelpful, they can become intractable.
But ultimately, climate changedoes pose risks to many companies.
And companies across sectors are facingphysical risks, also transition risks.
And there is a business case here.
There's a business case for addressingclimate, for improving resilience,
for reducing costs, and that isincreasingly tied to stakeholder
(17:32):
expectations, including regulators.
Steve Odland (17:35):
OK, Andrew, we're coming down to the final three, the big three.
What's the third?
Andrew Jones (17:41):
The big three, indeed.
And I think number three is a bigone, and something that's really been
top of mind for many sustainabilityexecutives, which is demonstrating
business return on investment, ROI.
I guess to give some context here, Ithink we've spoken through this discussion
about how sustainability has matured,and it's become more integrated into
the business, and perhaps it's becomemore sophisticated and has widened into
incorporate a broader range of themes.
(18:03):
And I think as it's done so, I thinkwe've also seen a maturing of how
sustainability is viewed from a sort ofinternal cost and investment perspective,
where boards and CEOs and CFOs areincreasingly requesting evidence of
sustainability's tangible contributionsto the firm's bottom line, right?
Whether that's cost savingsor risk mitigation or brand
(18:24):
and reputational impacts.
And this is something that's been steadilyincreasing for the last few years.
And we've definitely seen that this year,amid political and economic uncertainty
and disruptions, that these expectationshave only further intensified.
And there's a big imperative here forsustainability teams to really be able to
measure and show the linkage between theirwork and the firm's economic performance.
Steve Odland (18:47):
There's been this ESG backlash, but really what that
is it is people saying, look, youcan't take one constituent and
focus solely on one constituent.
If you say, our only focus here ison the environment, that means by
definition that you don't care about yourcustomers, your employees, or your owners.
So, too, if your onlyfocus is on the owners.
(19:08):
So it can't be only, it has tobe all the above, and I think
that's the whole point here.
So demonstrating ROI is acknowledgementthat there are multi-stakeholders in
this, and you've got to balance all of it.
Andrew Jones (19:19):
It is.
And I think it's also an acknowledgementthat, yeah, I think going back
to what we said earlier, thatsustainability, there's an ongoing
push to integrate that into the firm.
We want sustainability to be moreweaved into the fabric of the firm.
We don't want sustainability to betreated as a side project or a special
case that requires special treatment,but therefore it also has to be
articulated in the same kind of languageas other business investments, right?
(19:42):
And that's how we build resilienceinto those projects that outlast
headwinds and swings back andforth in the broader sphere.
Steve Odland (19:51):
All right, number two on our list of priorities for sustainability.
Andrew Jones (19:56):
So number two is sustainability reporting regulations.
And I'm smiling as I say this becausewe work with so many sustainability
leaders, and reporting regulations havebeen the perennial question and issue
for a few years for a few years now.
And we've touched on some of this already,as we've discussed, but sustainability
reporting regulations have really, they'vecome a long way in the last few years and
have developed in multiple jurisdictions.
(20:17):
And we're seeing a kind ofongoing shift from voluntary
reporting to mandatory reporting.
Many big focus areas that we'vediscussed today, like climate emissions
or supply chains or biodiversity.
And companies have been gearing upand preparing for these now for a
few years, in particular, the bigmultinational firms that are subject
to some of the big regulations comingout of Europe, such as the CSRD.
Steve Odland (20:39):
All right, coming down, drum roll, ready?
The number one priority for sustainabilityexecutives for the rest of 2025 should be?
Andrew Jones (20:48):
Navigating ESG policy changes.
You may have heard, Steve, it's becomesomewhat of a truism to observe that
the political, legal, and regulatoryenvironment has shifted significantly this
year, whether it's in the US and globally.
And the new administration, obviously,has launched a pivot on many issues,
but this has included a significantshift on some sustainability-related
issues, in particular climate and energy.
(21:11):
And we've seen the new administrationadjust climate policy, has adjusted
some of the incentives for renewablesand fossil fuels, has initiated some
deregulatory initiatives and changed someof the disclosure rules, and has also
initiated a withdrawal from some of theinternational frameworks and agreements.
So we've seen a big change here, andthese in the process have also adjusted
some of the signals, incentives, drivers,and regulations that shape corporate
(21:35):
sustainability efforts, particularly forthose companies headquartered in the US.
Steve Odland (21:38):
Yeah, it is interesting that it's the political and policy
environment that is the number onepriority, which doesn't sound like
anything to do with caring forthe environment or any of these
other more tangible things.
However, that's the backdrop, right?
It's part of dealing with themultiple constituency world.
(21:59):
And it's not that you play defense,it's that you just have to acknowledge
that things shift, priorities shift.
Think of it as that, ratherthan just running from one
side of the boat to the other.
And we do that in our own businesson various things as times change,
as customer needs change, we shiftpriorities, and that's what we're
(22:19):
seeing out of Washington and Brussels.
The pendulums swing, and, unfortunately,sometimes they go a little bit too far
and they have to be dialed back, but itdoesn't change the overall objective of
what we're trying to accomplish, does it?
Andrew Jones (22:34):
No, it doesn't.
I think really nicely put that yeah,times do change, and along with times
changing, language changes and framingschange and different ways of working
come and go, and perhaps certainissues come in and out of vogue.
But I think the ultimateunderlying goal remains.
I think it's a really important point.
Yeah, we can get caught up inthe moment and the perception
(22:54):
of radical, rapid change.
But I think when it comes tosustainability, there is a need to
keep it all in perspective, right?
And federal government or EU governmentactions are just one factor among many
influencing sustainability strategy.
There's also many of the stakeholders wediscussed today, whether it's investors,
customers, regulators, supply chains,the employees, and all of these together
(23:16):
continue to drive sustainabilityforward, and the particular balance and
particular positioning might change.
But I think the underlying focus onvalue, on resilience, on managing
risks remains just as pertinent as ever.
Steve Odland (23:29):
Yeah.
And our members can stay up to date, andalso the public, by logging onto tcb.org
and looking at the Sustainability Center.
You are updating this world almostdaily in terms of what's happening and
what people should be thinking about.
The Governance & SustainabilityCenter of The Conference Board is
(23:50):
a wonderful resource for what'shappening and what you should be doing.
Andrew Jones (23:56):
I appreciate you saying that, Steve.
And yeah, we do our best to keepour members and broader stakeholders
up to date on the issues thatmatter in a nonpartisan way.
Steve Odland (24:04):
Dr. Andrew Jones, thank you for sharing the top 10
sustainability priorities for 2025.
Andrew Jones (24:10):
Thanks so much, Steve.
It was a pleasure to join you today.
Steve Odland (24:13):
And thanks to all of you for listening to C-Suite Perspectives.
I'm Steve Odland, and this series has beenbrought to you by The Conference Board.
Welcome to C-Suite Perspectives, a signature
series by The Conference Board.
I'm Steve Odland from The ConferenceBoard and the host of this podcast series,
and in today's conversation, we're goingto talk about the top 10 sustainability
priorities for the rest of 2025.
Joining me today is Dr. AndrewJones, principal researcher at
our Governance & SustainabilityCenter at The Conference Board.
(00:23):
Andrew, welcome back.
Andrew Jones (00:25):
Thanks so much, Steve.
Always a pleasure to be with you.
Steve Odland (00:27):
So we're going to do this top 10 in reverse order, Andrew.
And starting with number 10, whatis the number 10 priority for
sustainability executives in 2025?
Andrew Jones (00:37):
So we think the number 10 priority is AI, artificial intelligence.
So I think we all know that companiesare obviously investing so much in AI,
it's a time of accelerating AI adoption,but it also has big opportunities to
advance sustainability goals whilealso introducing some risks, as well.
Steve Odland (00:55):
Tell me how AI works in the sustainability world.
Andrew Jones (00:58):
I think it's interesting cause obviously,
sustainability and ESG, they areinherently data-driven disciplines.
They've been built on thecollection of large data sets across
operations and suppliers, emissions,resource usage, energy, et cetera.
So companies alreadygathered this data, right?
So there's a big opportunityto apply AI to that data.
And I think we're seeing signs ofcompanies really starting to use AI
(01:19):
to advance their sustainability goals.
And I think an obvious one isregulatory compliance and reporting.
We know that AI tools can streamlinethe preparation of reports and
ensure consistency, but there's alsosome really interesting, innovative
approaches emerging where it'saround analyzing big data sets.
So, for example, looking at big emissionsdata sets or big water usage data
sets to really identify opportunitiesfor efficiencies and optimizing and
(01:42):
looking across the supply chain.
So there's some really excitinguse cases of AI emerging when it
comes to sustainability, Steve.
Steve Odland (01:49):
Yeah, so those sound, not the really advanced kind of AI tools,
more of the normal kind of analyticaltools: large language models, data
analysis tools and that sort of thing.
Andrew Jones (02:01):
That's right.
Yeah, I think, as you say, theobvious use cases for AI, we're
seeing across functions and acrossdisciplines where it comes to reporting,
communications, data analytics.
But also, yes, some more advanced,cutting-edge science, where it's
around scenario modeling and looking,for example, modeling extreme
weather events or climate risks.
Or even developing moreoptimized packaging and products.
(02:22):
I think there's a lot more tocome in this area, for sure.
Steve Odland (02:26):
All right, moving on then.
What's the number nine priority forcompanies' sustainability efforts.
Andrew Jones (02:32):
So number nine is communicating and storytelling,
and specifically, telling yoursustainability story in a way that
resonates with key stakeholders.
And that includes some of thelongstanding key audiences like
investors and regulators, butalso broader spectrum, including
employees and consumers and users.
Steve Odland (02:51):
Yeah.
You don't think of storytellingas in sustainability in the same
sentence, but you've written on this.
And it is interesting, becauseevery company has a different set of
objectives, they're in a differentindustry, they've got different issues.
And so explaining to their constituentswhat that package of issues are and
(03:12):
how they're addressing it becomeskey to the success of their efforts.
Andrew Jones (03:17):
It really does.
I think that's really nicely put, whereyeah, there's this different kind of, I
guess there's a different constellationof stakeholders around each company.
And obviously they vary bypositioning and market and industry.
And we know, for example, investors andregulators have been seeking consistent
materiality, focused disclosures,and progress against targets.
(03:38):
But on top of that, there's also, Ithink there is this need for more
thoughtful and creative storytellingwithin those parameters that does
really tell what the company's doingwhen it comes to innovation and
strategy and long-term value creation.
I think this can be a reallyimportant tool for competitive
advantage and differentiation.
Steve Odland (03:57):
Yeah.
And they don't teach storytellingin law school or finance school.
So this takes a differentmuscle when you're thinking
through how to present this.
Everybody is focused on frameworksand the data, as you said before.
And so it really requires communicationskills and therefore, some
cross-functional work across the C-Suite.
Andrew Jones (04:17):
It really does.
And I think you're right that thisdoesn't necessarily always come
naturally in this kind of field, though.
It is a field that, particularly for thelast few years, has been dominated by data
and assurance and harmonized frameworksand consistent disclosure metrics.
And I think, yeah, there's a realopportunity to humanize some of that
messaging and pair that hard datawith case studies and testimonials
(04:38):
and stories of transformation.
And that clearly does require input frommarketing, from communications, from
the experts who do that day in, day out.
Steve Odland (04:46):
Yeah.
And it's far easier to listento as one of the constituents
than just simply reading tables.
Andrew Jones (04:51):
It really is.
Yeah, it really is.
And I think numbers alone, particularlywhen they're big, abstract numbers
don't always resonate, for sure.
Steve Odland (04:58):
Yeah.
Number eight on our hit paradeof sustainability priorities.
Andrew Jones (05:04):
So this is an interesting one.
Number eight is integratingsustainability into the business.
So particularly, as sustainabilityhas matured as a discipline there's
this sort of ongoing drive across manyindustries to embed sustainability
more into the core business.
And what we mean by that is really theday-to-day operations, the culture.
So it's not a sort of siloed sideinitiative, but it really is part and
(05:27):
parcel of the fabric of the business.
Steve Odland (05:31):
And you've written about this, too, that when
sustainability efforts startedin companies, people hired an
expert or an outside firm to do it.
But it was basically, youguys go over there and put the
metrics together or whatever.
Now people are realizing that,OK, you can't just do that.
If you're going to make progress,you have to link your strategic
(05:54):
plans, your long-term strategicplans, and every element of it
with your sustainability goals.
Because the actions, or the tactics, thatneed to be driven through the organization
cover so many different areas.
And so this is what you mean by,the integration of sustainability
into the plan and into thefabric of the organization
Andrew Jones (06:16):
Yeah, so nicely put, Steve.
Yeah, it's really that, that closerlinkage to where it's like in enterprise
risk management or supply chain strategy,product development, financial planning,
the really core of the business, right?
Where, as you said, sustainability perhapsdidn't always play, didn't always interact
because of the history of the function,I guess, it being a sort of more recent
function in looking at the longer term.
(06:37):
But it's worth saying companieshave made some big strides here.
And actually, in a survey we did just lastyear, we found only 7% of sustainability
leaders felt they were fully integratedinto the strategy and operations.
I think that makes sense.
There's still some work to go,but more than 60% felt they
were moderately integrated andmoving in the right direction.
I think there's been alot of progress here.
I think companies are now grapplingwith how do you move to the next phase?
(06:59):
How do you really have the right—whetherit's the right team structures, the
right governance processes, the rightoversight mechanisms in place to
really drive that to the next level.
Steve Odland (07:10):
Number seven on our list of priorities for sustainability executives.
Andrew Jones (07:16):
So number seven is something that I think is gradually
moving up the list here on here, which isbiodiversity, along with natural capital.
And what we mean by biodiversity isbiological diversity, the variety of
all living things on earth that underunderpin the health of the planet.
And I think there's been a lotof traction in this space, right?
There's new regulations coming in,there's new disclosure frameworks.
I think general awareness has really
(07:37):
increased of
the critical nature of biodiversity and underpinning,
I guess, not just business,but the whole global economy.
So there's a lot of action on this front,
for sure.
What does biodiversity mean to you
Steve Odland (07:50):
when you're thinking about sustainability in a corporation?
I understand if you're a biologistor a botanist, but in a corporation,
you scratch your head a little bitwhen you talk about biodiversity.
Andrew Jones (08:01):
It's a good question, cause it can appear, it can feel quite
abstract, it can feel quite scientific.
But I think biodiversity and,particularly, the loss of biodiversity,
loss of species variation, it hasreally direct effects on the economy,
on the environment, where it'sperhaps exacerbating climate change.
And there's also some really bigsocial impacts where it comes
to loss of industries, lossof livelihoods, loss of jobs.
(08:23):
And biodiversity is really critical forthe food we eat, the water we drink,
cutting-edge medicines and science.
Actually, the business caseof biodiversity is, I think,
becoming more and more compelling.
It's becoming more direct, andit's clearly not diminishing.
And actually I think there's a strongargument that companies should be
focusing on biodiversity, perhaps justas much as they should be on climate.
Steve Odland (08:45):
And so what are the steps that you're
recommending that companies take?
Andrew Jones (08:49):
So I think what we're really seeing is, first of all, adoption
of an alignment with some of thesenew frameworks that are coming in.
There's a lot of new regulations, onboth the US and particularly in Europe,
and new disclosure frameworks, andwe're seeing some early movers starting
to adopt those, really starting totrack the sourcing of some of their
commodities in their supply chains.
I think, in addition to that first piece,I think we're also seeing companies
(09:10):
perhaps being more proactive and reallydeveloping specific measurable goals,
whether it's ecosystem restoration orconservation or land use management.
We're seeing some proactivepartnerships with local communities,
with conservationists, with Indigenouscommunities who are often affected by
biodiversity loss, and ongoing supplychain mapping, really tracing by supply
(09:31):
chain impacts on biodiversity hotspots.
So there's a lot of thingscompanies can do in this space.
I think it probably starts reallywith just developing that strategy and
not just looking at this in terms ofdisclosure, but as a strategic exercise.
Steve Odland (09:42):
And every company in the food chain needs to be involved
with this because if we start losingthat biodiversity, you're narrowing
the options for feeding the planet,and that would be disastrous.
Andrew Jones (09:55):
Yeah, completely.
And while biodiversity losscan impact on all industries.
I think it's particularly notable in foodand beverage, agriculture, and related
industries for the reason you've laid out.
Steve Odland (10:06):
Number six on our hit parade of sustainability priorities.
Andrew Jones (10:11):
So I think, continuing the previous point's focus on
nature, number six is water.
And specifically, waterstewardship and scarcity.
And I think this is anotherone that's rising up the list.
And Steve, our C-Suite Outlooksurvey earlier this year, we actually
saw water really rank highly asan environmental concern for.
For all CEOs, but particularly CEOsin the US, which I think just reflects
(10:32):
rising risk of water scarcity anddifficulties around water management.
Steve Odland (10:37):
Yeah.
And human beings can go for a whilewithout food, but they can't go for
a while without water, nor can anyof our biodiverse species, whether
they are plant life or animal life.
So this is really the common denominator,and freshwater is obviously key to that.
Whereas most of the Earth's crust iscovered by saltwater, it's freshwater
(11:00):
that sustains life, outside of ocean life.
So you have a changing climate andareas that are becoming more and more
arid, really an important subject.
Andrew Jones (11:10):
It really is.
And I think we're really seeingit move up the list when it comes
to sustainability priorities.
It's an escalating concern, particularlyin those regions that perhaps are arid
or have experienced water scarcityand water risks in recent years.
Thinking, again, similar industries tothe previous point: agriculture, food and
beverage, also technology, and huge usageof water and cooling and data centers.
(11:31):
And I think the combination, thereal perceived risk, along with
investor expectations and physicalconstraints and regulatory risks,
are pushing this into a top tierof material sustainability issues.
Steve Odland (11:42):
And there's also use issues.
When the Colorado River ran dry, forpeople downstream, that was catastrophic.
So how do you advise companiesto engage on this issue?
Andrew Jones (11:54):
So I, I think companies can really start
by, obviously, mapping, right?
Conducting those water risk assessments,mapping and assessing their operational
and supply chain exposure to water stress.
And that includes asort of the basin level.
And I think for those companiesthat are really at risk or are in
water-scarce areas, it then becomes anissue of setting those science-based
targets, implementing processes.
(12:15):
And then there are many water-usereduction and recycling issues companies
can pursue, including closed-loop systemsand optimized cooling and all these
kind of exciting innovative processes.
And also in collaboration, right?
There's clearly a huge need forengaging with local government and
communities and other firms to managewater resources in a sustainable way.
Steve Odland (12:38):
We're talking about sustainability priorities
for the balance of 2025.
We're going to take a shortbreak and be right back.
Welcome back to C-Suite Perspectives.
I'm your host, Steve Odland, fromThe Conference Board, and I'm
joined today by Dr. Andrew Jones,who's the principal researcher at
the Governance & SustainabilityCenter of The Conference Board.
OK, so Andrew, we're halfway there.
(13:00):
We've gone through number six through 10.
Let's kick off the second halfhere with priority number five
for sustainability executives.
Andrew Jones (13:10):
So priority number five, I think is something that's been top of mind
for many people the last few months, whichis supply chains and, specifically, supply
chain transparency and sustainability.
And this is, I think, has beenan increasingly a focal point
for sustainability leaders inrecognizing that for many companies,
the majority of environmental andsocial impacts often occur outside
the direct operations, right?
They occur in their supply chains, whetherthose are emissions or human rights
(13:34):
issues or sourcing and manufacturing.
So this is top of mind formany sustainability leaders.
Steve Odland (13:39):
Yeah.
And so again, what would you recommend,what steps that companies should take?
Andrew Jones (13:44):
So it's interesting because I think there is, similar to
previous questions, there's been abig regulatory push in this area for
human rights and environmental duediligence in global supply chains,
including new laws coming out of Europe.
So I think again, perhaps, first stepis to assess your regulatory exposure
and where you need to be compliant andwhat directives are coming and what
regulations are coming down the pipeline.
(14:05):
I think on top of that, then it'sreally maybe identifying, assessing
and identifying, the key risksin your specific supply chain.
And that will obviously vary by companyand industry and footprint, but for
many companies, that seems to be somecombination of Scope Three emissions,
value chain emissions, also supply chaintraceability when it comes to human rights
(14:26):
and labor issues, child labor, and so on.
So there's a wide range of areas wherecompanies are at risk here, from a
reputational, legal financial perspective.
And companies are really, I think,developing new ways of mapping their
supply chains and engaging with theirsuppliers and building the capacity
of their suppliers to really increasetheir visibility into these issues.
Steve Odland (14:46):
Yeah, and you need supply chain resilience.
We've learned this with some of thegeopolitical issues that we've had.
We've also learned this over andover again with disaster-recovery
issues, whether it's hurricanesor tsunamis or tornadoes or these
weather events or earthquakeswhere the supply chain is risky.
I remember one company who, I don'tknow why, built a data center right in
(15:07):
the landing path at Atlanta HartsfieldAirport, and you kinda look up and you
go, that's really probably not a verygood place to put that data center.
But you have to think through all theaspects of the supply chain and the
potential gray and black swan optionsthat could come down the road, and
make sure that you're hardening andmaking your supply chain resilient.
Andrew Jones (15:28):
You really do.
It's a really fascinating example, andfor me, it just perhaps underscores
how a broad holistic ESG perspectivecan be really helpful here.
Both in terms of integrating thatinto supply chain planning and
investments, and also on the samehand integrating supply chain
considerations and tariff considerationsand trade restriction considerations
into the ESG and sustainabilitystrategy at the same time, as well.
(15:50):
Yeah, this is a fascinating area, and Ithink we'll continue to see a lot of focus
on this, given some of the geopoliticaldevelopments we've seen recently.
Steve Odland (15:57):
Number four in our list of priorities.
Andrew Jones (16:00):
So number four is, I think, one of the most persistent
areas of sustainability strategies,which is climate, climate strategy.
And we all know that climate change isa longstanding sustainability priority.
It's seen as material andmultidimensional risk for most, if
not all, businesses in some way.
And it intersects across financialrisk and regulatory compliance.
(16:21):
And it remains a core area of focus.
And as companies have done a lot onclimate in the last few years, whether
it's building capacity to track andmitigate their emissions or assessing
their various risks and implementingnew strategies, this continues to be
top of mind for sustainability leaders.
Steve Odland (16:36):
Yeah.
And I think we got waylaid for a whilein this whole argument about manmade
global warming and is it or isn't it?
And that isn't the question.
The issue is the climate's beenchanging since the Earth was formed,
and it's going to continue to change,whether it's exacerbated by man's
influence on the Earth or not.
(16:58):
And the point here is companies needto look at what they're doing and their
impact on it and try to mitigate that.
Andrew Jones (17:08):
Yeah, putting those kind of debates, which can become
politicized, they can becomeunhelpful, they can become intractable.
But ultimately, climate changedoes pose risks to many companies.
And companies across sectors are facingphysical risks, also transition risks.
And there is a business case here.
There's a business case for addressingclimate, for improving resilience,
for reducing costs, and that isincreasingly tied to stakeholder
(17:32):
expectations, including regulators.
Steve Odland (17:35):
OK, Andrew, we're coming down to the final three, the big three.
What's the third?
Andrew Jones (17:41):
The big three, indeed.
And I think number three is a bigone, and something that's really been
top of mind for many sustainabilityexecutives, which is demonstrating
business return on investment, ROI.
I guess to give some context here, Ithink we've spoken through this discussion
about how sustainability has matured,and it's become more integrated into
the business, and perhaps it's becomemore sophisticated and has widened into
incorporate a broader range of themes.
(18:03):
And I think as it's done so, I thinkwe've also seen a maturing of how
sustainability is viewed from a sort ofinternal cost and investment perspective,
where boards and CEOs and CFOs areincreasingly requesting evidence of
sustainability's tangible contributionsto the firm's bottom line, right?
Whether that's cost savingsor risk mitigation or brand
(18:24):
and reputational impacts.
And this is something that's been steadilyincreasing for the last few years.
And we've definitely seen that this year,amid political and economic uncertainty
and disruptions, that these expectationshave only further intensified.
And there's a big imperative here forsustainability teams to really be able to
measure and show the linkage between theirwork and the firm's economic performance.
Steve Odland (18:47):
There's been this ESG backlash, but really what that
is it is people saying, look, youcan't take one constituent and
focus solely on one constituent.
If you say, our only focus here ison the environment, that means by
definition that you don't care about yourcustomers, your employees, or your owners.
So, too, if your onlyfocus is on the owners.
(19:08):
So it can't be only, it has tobe all the above, and I think
that's the whole point here.
So demonstrating ROI is acknowledgementthat there are multi-stakeholders in
this, and you've got to balance all of it.
Andrew Jones (19:19):
It is.
And I think it's also an acknowledgementthat, yeah, I think going back
to what we said earlier, thatsustainability, there's an ongoing
push to integrate that into the firm.
We want sustainability to be moreweaved into the fabric of the firm.
We don't want sustainability to betreated as a side project or a special
case that requires special treatment,but therefore it also has to be
articulated in the same kind of languageas other business investments, right?
(19:42):
And that's how we build resilienceinto those projects that outlast
headwinds and swings back andforth in the broader sphere.
Steve Odland (19:51):
All right, number two on our list of priorities for sustainability.
Andrew Jones (19:56):
So number two is sustainability reporting regulations.
And I'm smiling as I say this becausewe work with so many sustainability
leaders, and reporting regulations havebeen the perennial question and issue
for a few years for a few years now.
And we've touched on some of this already,as we've discussed, but sustainability
reporting regulations have really, they'vecome a long way in the last few years and
have developed in multiple jurisdictions.
(20:17):
And we're seeing a kind ofongoing shift from voluntary
reporting to mandatory reporting.
Many big focus areas that we'vediscussed today, like climate emissions
or supply chains or biodiversity.
And companies have been gearing upand preparing for these now for a
few years, in particular, the bigmultinational firms that are subject
to some of the big regulations comingout of Europe, such as the CSRD.
Steve Odland (20:39):
All right, coming down, drum roll, ready?
The number one priority for sustainabilityexecutives for the rest of 2025 should be?
Andrew Jones (20:48):
Navigating ESG policy changes.
You may have heard, Steve, it's becomesomewhat of a truism to observe that
the political, legal, and regulatoryenvironment has shifted significantly this
year, whether it's in the US and globally.
And the new administration, obviously,has launched a pivot on many issues,
but this has included a significantshift on some sustainability-related
issues, in particular climate and energy.
(21:11):
And we've seen the new administrationadjust climate policy, has adjusted
some of the incentives for renewablesand fossil fuels, has initiated some
deregulatory initiatives and changed someof the disclosure rules, and has also
initiated a withdrawal from some of theinternational frameworks and agreements.
So we've seen a big change here, andthese in the process have also adjusted
some of the signals, incentives, drivers,and regulations that shape corporate
(21:35):
sustainability efforts, particularly forthose companies headquartered in the US.
Steve Odland (21:38):
Yeah, it is interesting that it's the political and policy
environment that is the number onepriority, which doesn't sound like
anything to do with caring forthe environment or any of these
other more tangible things.
However, that's the backdrop, right?
It's part of dealing with themultiple constituency world.
(21:59):
And it's not that you play defense,it's that you just have to acknowledge
that things shift, priorities shift.
Think of it as that, ratherthan just running from one
side of the boat to the other.
And we do that in our own businesson various things as times change,
as customer needs change, we shiftpriorities, and that's what we're
(22:19):
seeing out of Washington and Brussels.
The pendulums swing, and, unfortunately,sometimes they go a little bit too far
and they have to be dialed back, but itdoesn't change the overall objective of
what we're trying to accomplish, does it?
Andrew Jones (22:34):
No, it doesn't.
I think really nicely put that yeah,times do change, and along with times
changing, language changes and framingschange and different ways of working
come and go, and perhaps certainissues come in and out of vogue.
But I think the ultimateunderlying goal remains.
I think it's a really important point.
Yeah, we can get caught up inthe moment and the perception
(22:54):
of radical, rapid change.
But I think when it comes tosustainability, there is a need to
keep it all in perspective, right?
And federal government or EU governmentactions are just one factor among many
influencing sustainability strategy.
There's also many of the stakeholders wediscussed today, whether it's investors,
customers, regulators, supply chains,the employees, and all of these together
(23:16):
continue to drive sustainabilityforward, and the particular balance and
particular positioning might change.
But I think the underlying focus onvalue, on resilience, on managing
risks remains just as pertinent as ever.
Steve Odland (23:29):
Yeah.
And our members can stay up to date, andalso the public, by logging onto tcb.org
and looking at the Sustainability Center.
You are updating this world almostdaily in terms of what's happening and
what people should be thinking about.
The Governance & SustainabilityCenter of The Conference Board is
(23:50):
a wonderful resource for what'shappening and what you should be doing.
Andrew Jones (23:56):
I appreciate you saying that, Steve.
And yeah, we do our best to keepour members and broader stakeholders
up to date on the issues thatmatter in a nonpartisan way.
Steve Odland (24:04):
Dr. Andrew Jones, thank you for sharing the top 10
sustainability priorities for 2025.
Andrew Jones (24:10):
Thanks so much, Steve.
It was a pleasure to join you today.
Steve Odland (24:13):
And thanks to all of you for listening to C-Suite Perspectives.
I'm Steve Odland, and this series has beenbrought to you by The Conference Board.
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