Three Things to Know About the Future of Sustainability
We are excited to share the next article in our series, “Three Things,” investigating trends and insights in international trade and commerce with experts from BCIU and our global network. This article spotlights corporate sustainability. To learn more about BCIU, visit us at our website, www.bciu.org, and sign up to participate in our programming.
Sustainability is no longer just a business priority, but an integral part of every successful organization’s transformation strategy. In fact, 99% of large-company CEOs agree that issues related to sustainability are important to the future success of their businesses. And one of the top issues within sustainability relates to climate change, which has become an urgent concern for the private sector.
Many organizations are looking to the United Nations Sustainable Development Goals (UNSDGs) to guide their environmental business practices and corporate sustainability policies. We sat down with one of our partners, MetLife Chief Sustainability Officer Jon Richter, to discuss the trends shaping sustainability policies in the private sector.
Investing in a green future
Building a sustainable planet is a global challenge that affects everyone, everywhere, and will require the full strength of all stakeholders to address. Private-sector investment can be a powerful mechanism in working toward United Nations Sustainable Development Goal (SDG) 13, which focuses on taking urgent action to combat climate change by helping lead the world to a greener economy.
UN Secretary-General António Guterres has proposed six climate-positive actions to help shift the world to a more sustainable economy, one of which mentions the need for a “green transition,” meaning investments must accelerate the decarbonization of all aspects of the economy.
Environmental, social, and corporate governance (ESG) are three central factors in measuring the sustainability and social impact of an investment.
“MetLife integrates environmental, social, and governance factors into our investment decision-making processes,” said Richter. “We define responsible investments as those that achieve both a market financial return and promote social or environmental benefits. Our responsible investments focus on infrastructure; green buildings and renewable energy projects; municipal bonds; affordable housing investments; and impact investments.”
MetLife has shown that sustainable investments can see a strong financial performance while also promoting social and environmental benefits. “As they are attractive assets, we have enhanced our portfolio of responsible investments under management, holding more than $70 billion of assets in this area at the end of 2020,” Richter said. Sustainable investing is also a key component of the company’s 2030 Environmental Goals, which include a commitment to originate $20 billion of new green investments and $500 million of impact investments, with 25% allocated to climate change priorities.
Double down on reduction
As CO2 levels and other greenhouse gases in the atmosphere rose to new records in 2019, physical spaces became an emerging area of focus for organizations looking to make a quantifiable impact on climate change. Promoting sustainable construction is a key pillar of SDG 11, which highlights the need to make cities and human settlements more inclusive, safe, resilient, and sustainable.
High-performing green buildings, such as those that are LEED certified, reduce the climate impact of both the structure and its inhabitants. According to Architecture 2030, buildings account for nearly 40% of all greenhouse gas emissions, and you can also add in some of the impact from the transportation sector, which is associated with the functionality of people traveling to and from those spaces.
While in the past we may have only discussed reducing carbon footprints, today long-term climate goals and carbon capture technology are just as important for, if not dominating the conversation around, corporate responsibility. In 2016, MetLife was the first U.S.-based insurance company to achieve carbon neutrality. It has maintained its carbon-neutral status every year since, while occupying 12 million square feet of workspace across the globe. It has also maintained carbon neutrality across its vehicle fleet and employee business travel.
“For MetLife, carbon neutrality involves both immediate actions to address climate change, as well as navigating the long-term transition to a low-carbon economy,” said Richter. “As a carbon-neutral company, our first priority is to integrate sustainability best practices across global operations so we can drive continuous improvements in waste, water, energy, and carbon reductions. Our environmental commitments align with our purpose as a company: to build a more confident future by using natural resources sustainably and addressing issues such as climate change with urgency.
Sustainability is about everyone
But sustainability has never been solely about climate change or the built environment. Creating a more sustainable world depends on our ability to create a basis of diversity and inclusion for all. In addition, it’s been proven that businesses that prioritize diversity see positive changes both in their reputations as global citizens, and also in their bottom lines.
“At MetLife, diversity, equity, and inclusion is a global business imperative and a core component of our sustainability strategy,” said Richter. “We have a strong commitment to creating an inclusive workplace culture where all employees feel seen, heard, and valued for their uniqueness and feel emboldened to make a difference. We’re also working outside our four walls to ensure that we’re doing our part to drive progress toward a more inclusive and equitable society.”
In the coming years, companies will likely become more vocal about the need to deliver on more aggressive diversity and inclusion goals, as well as track public-facing metrics in order to hold themselves accountable. As part of MetLife’s commitment to foster an inclusive, respectful, trusting workplace, President and CEO Michel Khalaf signed the CEO Action for Diversity & Inclusion pledge, which is the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.
A key component of diversity is gender equality, as outlined in SDG 5, which asserts that gender equality is not only a human right, but a necessary foundation for a peaceful, prosperous and sustainable world. Gender inequity is particularly visible in the corporate world, where many women face barriers in achieving upward mobility as senior executives, and the wage gap issue has been well documented.
“In 2020, we continued to build on our commitments to advance gender equity across MetLife, including launching new partnerships with the U.N. Global Compact and U.N. Women to help drive leadership accountability in addressing gender equity in the workplace, marketplace, and community,” said Richter. “Last year, we asked every country manager across the globe to sign the U.N. Women’s Empowerment Principles, reinforcing our focus on building a workplace that works for women and aims to close gender gaps. Globally in 2020, women represented more than 50% of our workforce, more than 40% of our managers, 30% of our Executive Group, and 33% of our Board of Directors.”
With environmental and sustainability issues at the forefront of an increasingly uncertain future, clear and updated corporate sustainability policies are no longer nice to have, but necessary for successful business transformation and performance.
“For MetLife, sustainability is about managing the business for the long term and ensuring we can deliver on our purpose for generations to come,” said Richter. “Living our purpose means ensuring MetLife can remain a force for good in the communities we serve, with a deep commitment to using all our resources to foster a healthier, more inclusive and equitable world. While sustainability and ESG may be gaining increased attention, for us, it’s always been woven into our DNA.”