How should companies define success when it comes to broad challenges like corporate responsibility? How can they put in practice what they preach in mission statements? Dr. Scott Mason, chief operating officer for EY in Switzerland, and a former CTO of Novartis, shared some of his insights about those questions in his presentation at Knowledge 2020 (free registration required)—and in this brief interview beforehand. Here are a few highlights.
The COVID-19 pandemic could be accelerating sustainability efforts in some sectors while handicapping efforts. What’s your view on the overall impact?
It certainly has been the natural reflex for businesses to focus on immediate needs, such as safety of employees, liquidity, and other urgent matters. Positively, we are also seeing companies reconnecting with their communities, and of course short-term environmental benefits—for example, reduced travel.
However, as the World Economic Forum has pointed out, “in many parts of the world, the pandemic and its effects are exacerbated by the crisis in achieving clean water and sanitation targets (SDG 6), weak economic growth and the absence of decent work (SDG 8), pervasive inequalities (SDG 10), and above all, entrenched poverty (SDG 1) and food insecurity (SDG 2). The World Bank estimates the crisis will push some 11 million people into poverty.”
Now more than ever, we need to promote strategies that respect economic, social and environmental well-being. One opportunity is directing the stimulus into ways that create a more sustainable future. Another is to use this crisis but to rethink corporate governance and business models.
How can companies truly practice what they preach when it comes to sustainability?
“Greenwashing” has been and doesn’t help, but EY’s analysis and many others show that sustainability is also good for business. In 63% of more than 2,000 studies on the impact of environmental, social, and governance (ESG) propositions was positive on equity returns, impacts, and only 8% reported negative impacts.
Notwithstanding sector and market variations, we are likely to observe in the coming recovery period to what degree it matters how deeply ESG practices are being applied. One area we can help with is to make it simpler for smaller companies to implement ESG practice.
How can AI be made to be a sustainable practice for large enterprises when some studies show that a single AI application has a carbon footprint five times bigger than an automobile’s?
If the question is whether we shouldn’t develop AI technology, that cat is out of the bag. As Moore’s Law predicts, we can anticipate progress in AI architectures and training approaches that massively improve efficiency. Case in point are results coming from research labs on low-power adaptive AI chips for edge computing. For example, the latest tests are showing 10x efficiency to current chip designs. I’m expecting AI to increasingly be a major enabler of ESG practices.