APLANET » Risk Management and Due Diligence in the ESG Era | Robert Adamczyk | ATALK 24
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Risk Management and Due Diligence in the ESG Era | Robert Adamczyk | ATALK 24

by APLANET, APLANET

Feb 07, 2024

About this ATALK

Join us in this insightful episode of ATALKS as we chat with Robert Adamczyk, a seasoned ESG professional. We delve into the intricate world of risk management and due diligence within the ESG framework, exploring how these aspects have evolved.

𝗞𝗲𝘆 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀:

✔️ 𝗥𝗶𝘀𝗲 𝗼𝗳 𝗘𝗦𝗚 𝗶𝗻 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗦𝗽𝗵𝗲𝗿𝗲: How ESG has become integral at the corporate level, influencing decision-making and operations.

✔️ 𝗗𝘂𝗲 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗶𝗻 𝗘𝗦𝗚: Examining the role of thorough due diligence in enhancing ESG strategies and outcomes.

✔️𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗮𝘀 𝗘𝘃𝗲𝗿𝘆𝗼𝗻𝗲’𝘀 𝗥𝗲𝘀𝗽𝗼𝗻𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆: How to integrate sustainability across all levels of a business, akin to health and safety standards.

✔️ 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 𝗶𝗻 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁: Insights into the complexities of modern risk management, balancing opportunities and threats in the ESG era.

✔️ 𝗠𝗮𝘁𝗲𝗿𝗶𝗮𝗹𝗶𝘁𝘆 𝗮𝗻𝗱 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴: Tips on effective ESG disclosure, from establishing responsible teams to understanding materiality for your business.

Dive into this fascinating conversation with Adamczyk, and gain a deeper understanding of the dynamic field of ESG risk management and due diligence. Perfect for professionals seeking to navigate the evolving landscape of corporate sustainability.

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Transcript

You can find the full transcript of their conversation below.

ATALK 35 with 𝗝𝗼𝘀𝗲 𝗖𝗮𝗿𝗹𝗼𝘀 𝗙𝗲𝗿𝗿𝗲𝗿 𝗔𝘃𝗶𝗹𝗮 and Pauline Lamouille from APLANETWelcome to ATALKS where sustainability is a voice. I’m Pauline Lamouille, Chief Marketing Officer of APLANET and your host for today’s discussion on a very crucial and timely topic, which is sustainability in sports. Today we’re joined by Jose Carlos Ferrer Avila, a distinguished expert in the field of sustainable development. Jose Carlos has very large experience working internationally on sustainable development with various governments, with the UN, international organization and multinational companies. And he’s here today to help us explore how the sports industry can take a proactive stance in sustainable development and in environmental and social responsibility. So, Jose Carlos, welcome to ATALKS.

Thank you very much, Pauline. My pleasure to be here. But first of all, thank you very much. I don’t consider myself an expert. I think being an expert in sustainability is very hard because legislation is just coming up now and I understand sustainability as well as a new approach. OK. You have very good professionals in general equality, in environmental issues and economic development in sustainable development. But having a, a common and a global approach that can tackle the specifics of environmental, economic and social issues is, is very hard. Let alone the fact that, as you well know, the regulatory landscape is totally new. We are facing almost every morning different EU regulations, recommends directives. So it is hard, it is hard to be an expert. I thank you very much for that, but I wouldn’t consider myself as such.

Thank you. So then, can you define and explain a bit what is your professional background and why did you end up as a sustainability expert?

Thanks. Thanks a lot. Thank you very much. Well, I have a background in international business and International Development. OK. So I’ve always been very concerned about social issues and public private partnerships. As a matter of fact, I studied economics and political science, which at that time didn’t match very well. Nonetheless, I think it is great that I had that chance to study those two degrees. And well, I come from before, as I said, from international business. I was foreign train advisor in Turkey. And then I moved to more political science and the Ministry of Foreign Affairs as an advisor. OK, we will edit this as an advisor, but the most important part is when I started working directly in, in development cooperation in sustainable development, where were all these movements of sustainable development, sustainability, the impact of companies, how companies should work with international frameworks and supporting the SDGs. I think that gave me the, the, the background to, to create your chief sustainability officer, which is the company that I lead now. And the idea behind all this is helping companies and organizations to create a positive impact in the environment, the society and the economy that they operate in. I think that is sustainability. Again, if you were to ask me what sustainability is, in a world, I would use empathy. If you are an empathic person, an empathic company, an empathic organization, you will consider your impacts and try to improve them. And that is what sustainability in my humble opinion is about. Trying to, to generate better conditions for the environment and society and the economy that you are operating. And if it is possible, if you can generate that positive impact through your business, through your regular business activity, that is what I think that companies are going to aim at in the 21st century. And that is a deal now I would, I would say.

So you’re saying that it’s a change in business model?

Absolutely, Absolutely.

You need to integrate it from.

I think we have now exactly two different business approaches. On the one hand, we have traditional companies that are trying to transform themselves into more sustainable companies. This is what we do. We have them transition and we have them walk that path. And then you have companies that are born with the idea of providing a solution, a profitable, profitable solution to a challenge. This is the two, the two, the two models that we are, you know, seeing now. And I think that it is not my, my, my sentence, but I think it’s definitely we are in a transition from a business model of shareholders to a business model of stakeholders. I think that companies are not the, the, the traditional agents that they used to be. I mean, what are you bringing to the table? Is what stakeholders are asking.

So including the whole value chain.

Of course, the, the, the, the value chain is, is crucial. Now we are well, just, I think it was yesterday or very recently this year’s CSDDD has finally been approved. It will be, well, it will start to be in, in the different EU countries in 2026 as compulsory national legislation. But the, the, the thing behind it is that the responsibility of the company does not end at the door of the company. That is the whole point here. And I see it myself as the new common agrarian policy, if I may say so. What is the European Union looking for, looking at when implementing this? It is trying to break the social dumping that companies operating outside the European Union are benefiting from. So one of the biggest instruments that the European Union has is the market. So you want to be part of that market, you have to behave under certain rules. And I think this is very good for all of us.

Given your experience in developing countries with the UN, European organization and lastly with EFRAG, What do you think about the current regulatory landscape and how will it affect companies, particularly in the European UNION?

Sure. Thank you. Well, I mean this is changing the landscape. The way of doing business is going to change. First of all, I think that the European Union has a very clear objective. All these regulatory tsunami as it is called like do no significant harm deforestation, Green claims directive, CSRD, CSDDD mean almost 30 different rules and regulations from the European Union have clear and simple objectives which are which are I think first of all is the transition from a very polluting model to a net 01 to A to a model that is not that is more environmentally friendly. They are looking for a decarbonization of the economy and the production process. And then the EU rule maker is willing to create a scenario where the stakeholders can make informed decisions. So all the CSRD, all the, the, the reporting landscape, all these, the, the objective behind it is that the different stakeholders that can have a say in what companies do, can make informed decisions so that through capital, through consumption, through investment, through lending money, this transition can be made. So, this is the, the, the, the idea in my humble opinion, behind all these regulations, you know, like tsunami or landscape so that stakeholders can make better decisions and through their economic decisions, through profitable businesses, change the economic system.

So they are just a tool. So we need to go from compliance to sustainability.

I don’t think sustainability has anything to do with compliance for example, like you need to comply and, and to comply with EU regulations. But I think the market, the consumers, and the stakeholders are going to very clearly differentiate between companies, institutions, organizations, proposals, models that are willing to bring solutions to the table in a profitable manner and those that are just reporting in Reporting is important. We need to report so that we can make clear decisions. But reporting is a tool which is not the objective. Yeah.

It’s not the end goal.

Definitely not.

OK, so now let’s go into sports.

Fantastic.

So now that we’ve talked of all this regulatory new landscape, the sustainable development of companies, European companies, but also the ones that have business outside of Europe, how do you think that this new landscape and sustainability regulation will affect the sports industry?

Thank you. Thank you, Pauline. I think it’s a very relevant question. It will affect the, the, the sports landscape, the sports industry in different ways. First of all, we need to understand that most of the sports industry is led by multinational garment and textile companies. So these are going to be key actors on the transitions on the transition towards more sustainable sports. So, and in the end of the day, these multinational companies or national companies that produce shoes, textile balls, you know, all, all the apparel that is needed to, to, to, to do sports are going to be very directly affected by, by all the European legislation. Then we have the teams, you know, the professional teams, the professional practitioners which are going to be affected as well because All in all they are private companies, profit that make profit and that are going to be subject to the CSDDD, to the CSRD, to the Green Claims Directive, to the Deforestation Directive. And therefore, as a stakeholder, they are, they are they, they will need to report and explain how they are facing the environmental, social and economic challenges and what is the proposal that they are bringing to the table. So I think the sports industry is going to be very much affected in, in, in these two areas and as well in the organization of events, which is something that we do a lot. We help event organizers in creating an added value, a positive value.

So it’s key for sports to have a positive impact, not just thinking of mitigating, they need to adapt really, to get a positive impact.

I think so. I think that currently the Green Deal, the European legislation, national legislation, the trends are very much focused on mitigating negative environmental impacts, which is great. This is, but sustainability is not only environmental issues. And when speaking about sports, particularly sports events, Sports Club, professional leagues, I think that the environmental elements are important but are not the key issue. The key issue in sports is how you transmit values. How you generate a positive impact on the society and the economy that you are operating in. Why? Because a sport event has a CO2 impact, which is relatively easy to measure, but the social and the economic impact is not so easy to measure, let alone to, to, to generate a positive impact. So, that is why we try to help these events, these companies, not only to, to, to say it, but to do it. How can through my Sports Club, through my Olympics, through my World Cup, through my games, some other games, whatever, how, how am I generating a positive impact that is sustainable, sustainable in time, sustainable in terms of economy? OK, it’s because of the CO2 emissions or the GHG emissions of a given event action. It is important to mitigate that, but that is not very difficult. A difficult thing is that what you do is relevant and impactful.

OK. So these events should have a good and positive impact beforehand, during the event and after the event.

Especially after.
So saying that, now that you have explained a bit what you think, why do you think sports should adapt its model towards a sustainable development model? Could you name an event that is or has been sustainable for you and maybe explain why?

I think the most sustainable international sports event to date has been the Barcelona 92 Olympics.

A Spanish one.

Yeah, a Spanish one. Not a coincidence though. Well, for many reasons, for example, particularly from the social and the economic perspective, I think the Barcelona 92 Olympics changed or helped to change the, the, the landscape, the structure of the city. It generated a lot of infrastructure that has been used through time. The infrastructures that were built specifically for those Olympics are into use as of today. Thinking about the swimming pools, the P Cornell swimming pools, Olympic Villa, the Forum, almost everything is still being used and has generated a positive impact and A and a positive pole of growth for those areas. And as well, they generated a very interesting critical mass. What am I trying to say here is that a lot of people contributed to the success of the Barcelona 92 Olympics. And we’re speaking about the early 90s, which was not so easy. You know, like not a lot of people spoke English. Like it was a challenge for the country, for the region and for the city. And I think they were very much up to the expectations. So, a lot of people generated a way of doing business, developing management skills, developing language skills, developing social skills that impacted the city and the region and the country for many years to come, let alone infrastructures. That is why I think they were the most sustainable international event as of yet.

So maybe within the current landscape with all the sports events that we’re now talking about, the UFA, UFA, EUR 2024, the Paris Olympics coming on the Tour de France, everything that is taking place right now. Why, with all that you’ve been saying until now, why is it crucial for the sports industry to really adapt to sustainable practices now more than ever?

Well, first of all, because we have a regulatory landscape that we did not have in the 90s, OK. And then from a more like, you know, business oriented or social oriented perspective, these events need to generate value and they need to generate a legacy in order for them to be impactful and relevant. There’s no, what is the point of organizing an Olympic venue, an Olympic game, if that is not going to generate positive value to the people that live in that city, to the people that live in that country, to the people that visit that country and that city. There are a lot of examples of creation of infrastructures and events that have generated totally the country. So I think the idea is to generate formulas and that is what we try to do with our customers and with and with our supporters and with our stakeholders to generate a mechanism so that we guarantee that the investment is good for all the stakeholders and not just for a small percentage of the population.

OK. And then maybe given your background with sustainable development goals, the SDGs that are key that are like framing the development of sustainability and also I know that you have experienced gender equalities and different aspects of the SDGs. How can sports organizations reincorporate these SDGs into their core strategies and operation, you know, and particularly in the context of these big upcoming events?

Thank you. Yes, well, I was very lucky and I worked in the first SDG fund in UNDP in 2013. Fourteen even even before the SDGs were like you know, published and were like set in the resolution 70 slash 2152030 agenda and so on. So the SDGs are very important in terms of providing a framework of sustainable development. So, they provide an agenda, they provide the item, they provide the objectives, the outcomes and the whys. OK. Why do this? Regarding sport, of course we could speak for hours about the relationship between SDGs and sports, but there are two or three SDGs that I would like to highlight or two or three ideas. For example, SDG 3 health and well-being has a total link with sports. I mean sports and health and well-being. There’s no need for me to explain. So, so how, how the how to use sports in order to promote that well-being and that health is clear. Another SDG that has a lot of relationship with sports or that can be leveraged through sports is definitely SDG 4 Education. Why? Because sports is a very good tool to to transfer knowledge, to transfer know-how and to transfer values. Therefore, regardless of it being like a sportsman, a sport, women, you name it, a team, whatever they generate values, they, they, they, it is a very, very, very good channel of communication for those values sports and that benefits for the population. Another SDG that is key. I was very lucky as well to work in or with UN Women and I, I was very lucky to be in a very specific team in partnerships and private sector. And we worked a lot with women in sports and the, the impact of sports in, in sustainable development programs is huge in terms of reducing gender gaps, creating awareness for women and for, for, for girls and, and to empower women and girls, which is what gender equality is about. Not the, the women’s empowerment, girls empowerment and the, the, the, the reduction of gender based violence also. So, sport was a very, very, very impactful tool for that. Of course, reduction, reduction and reducing inequalities are very much linked to what we have just spoken. And the last one, which is my favorite one, which is SDG 17 partnerships. I dedicate myself to generate partnerships and, and, and I think sports is the perfect venue, this perfect field to develop profitable and fruitful partnerships for, for sustainable development and for sustainability. And for example, the story of the Olympics and the Olympic Games. It’s a very interesting story that can be linked to SDG 16. We, we can speak about the Olympic truths or how through or during the Olympics, countries, cultures have been able to to discuss to each other, to talk to each other sometimes in a, in a, in a how to say, how to speak in a subtle way, you know, in a subtle manner. OK, maybe during the Cold War, it was a very, very interesting venue to speak and, and people speak through sports. No.

OK, so it’s a way to communicate.

And it is a way to communicate and to establish and to generate the space for communication.

So maybe given your experience in private public partnership, I wanted to tackle sponsoring.

I think it’s key.

So maybe how can we use these levers to maybe advance in sustainability within this sector?

Yeah, absolutely. Thank you. I think it’s a very, very good and very relevant question because either the venues and the teams are going to push sponsors towards more sustainable practices in order to be part of their business model or the other way around. Sponsors are going to push and to promote and to enhance sports practitioners, venues, leagues, events in order to become more sustainable and thus being sponsored by them. Not sure what we are now. What is the equilibrium now? I think that well, you have leaders in, in, in the sponsors and leaders in the venues that are like, you know, but this is something that is going to come and definitely sponsors are going to play the key role in, in, in the organization of sports event and in the, in the transition towards a more like sustainable sport. Practicing, you know, always speaking in professional terms like professional sports rather than amateur, but definitely textile industry apparel garments we’ve spoken about that is going to be key in, in the transition towards a more sustainable sport.

In regards to private Public Partnerships, do you have any examples or?

Well, I think that when practicing sports, public private partnerships are key due to the fact that we need public and private investment. OK, like the creation of infrastructures for sports many times is publicly owned or publicly financed, but the exploitation and the practice of sport is many times privately led. OK, so I think sports generate the perfect combination, the perfect formula for public private partnerships. Plus, for the practice of sports, be it amateur or professional, we need the so-called public common goods or the public Commons, which are the environment, the water, the sea, the mountains. So, so, so, I mean it is so intertwined that definitely sports, particularly professional sports are the perfect venue for development of profitable, impactful and sustainable public private partnerships.

Great. And now I wanted to tackle another issue which is more environmentally oriented in terms of climate action, because we know that climate change, we’re talking now about, climate change is affecting a lot of every industry, but I think it will impact and affect the sports industry a lot. So maybe how can the sports industry adapt to climate change? Because I don’t think that we should talk about mitigating only. We need to really adapt in order to reduce and reach the net 0 objective. So I don’t know if you can explain a bit more what your opinion is about this and if you have I don’t know an example to make.

It really well, definitely the practice of sport whether it is a material or or professional has to adapt to climate change. The issue or the thing with climate change that we are witnessing now is the high level of uncertainty. So uncertainty is very bad for business no matter what kind of business it is and for sports as well. So in terms of organizing Olympics, organizing venues, leagues, if you don’t have a certain level of certainty regarding how climate is going to behave, it is going to be very difficult. We are, I think we’re witnessing now temperatures of almost 47-48°C in India. There’s no sport that can be played outdoors at that temperature. And on the other hand, sustainability, if you have a good sustainability advisor, a good sustainability plan, a good sustainability strategy, what you are doing is reducing to the maximum that uncertainty. So sustainability is all about supporting and helping businesses and organizations to reduce uncertainty that is going to affect them. So that’s how I see the relationship.

So what do you think are the relevant opportunities and challenges that you’ll foresee for the future in this industry?

Well, as you just said, yes. 
As you said in this adaptation, I think that the sports industry needs to do leagues again, leagues, teams, events. They need to, to understand what is happening in terms of environmental issues, social issues and, and the economic issues. And the more and the better they can adapt to that level of uncertainty, the more successful they will be. This is my, my, my opinion. So I mean, winter sports, it’s an example of change. I presume that, and this is a guess that many winter sports are going to adapt to, to new to new arenas. If you allow me the expression like I am already seeing some kind of I used to ski on grass when I was a kid, you know, that disappeared and now it’s happening again. You know, I, I, I went to this, this very nice place in, in, in nearby Barcelona, in Catalonia, in Spain. And we used to ski grass in summer. I think that the grassy ski is going to be all year long, OK. And maybe in a different, in a different model or in a different one with different support. But definitely the sports industry is going to have to rethink itself on how they are going to be able to, to, to, to be economically sustainable. And I’m thinking about multinational companies like ski companies, shoe companies, like, I don’t know, athletic apparels, you know, they, they, they need to, to, to understand that how sport is practiced and supported as of yet is going to change.

And if we integrate, like technology to maybe, you know, take out these challenges linked to climate change, talking about, I don’t know, winter sports or Winter Games.

Well, you can definitely use technology. The technology is, it is key for many businesses and for all businesses now. And in terms of reduction of uncertainty, definitely I think prediction models are going to be very, very interesting in terms of the use of technology. But we can see that for example, now in Formula One when they are predicting weather conditions that change a race and that is worth millions, if not billions of dollars. So you have an example there. You have as well the Formula One, the electric cars. Now this is a change. They are adapting themselves. So, I think that you can see already good examples of how technology is being used to, to to to to this adaptation. Even the example that I put you previously with with skis, you know, this grass ski was like with wheels. Now I think they just slide. No, they are products of technology. I presume. You know how you can use the same ski but with a different surface so that it can slide in something that is not snow or sand. I don’t know, maybe we will soon see a slalom on top of a dune. I wouldn’t be surprised. OK.

So your conclusion would be that they should adapt.

Think out-of-the-box.

Think out-of-the-box that climate change is coming and we need to adapt in order to survive. That public private partnerships are key.

Definitely.

Definitely key and that the sports industry at the end should not be seen as a tool to mitigate all the environmental issues, but should have a very positive impact on the society, the economy.

And I think it has to be impact driven that the sports industry should look towards how to create value to the society and the economy that they are in rather than limiting themselves to mitigate potential environmental issues, which of course they have to, you know, take care of emissions and compensation. But I think that the core sustainability issue in sports is, as you said, it’s all about public private partnerships. Sustainability is about public private partnerships and definitely a way of generating long term added value to stakeholders.

To all the society and the stakeholders.

OK.

Lastly, we always ask this question at the end of a talk. Who would you like to see in the next episode of this season? OK, talking to me here. Do you have a person in mind?

Well, one person comes to my mind now. Yeah, yeah. I would suggest a former boss, a current very good friend and a lifetime mentor, which is Paloma Duran. She is currently working for Unitar and the Training and Education Agency of the United Nations. She’s a former director in OECD’s DAC. She was director of the first SDG fund in UNDP. She has an amazing international career and he’s one of the persons that better understands sustainable development that I know. I think she could, she could have a say in all this. Definitely, yeah.

If you are listening or watching us, well.

This is a small ambush. She does not know. I didn’t expect the question. I’m going to call her now, but I think she definitely can contribute. Of course. Yes. Great. Thank you very much. Thank you, Pauline. It’s been a pleasure.

Thank you, Jose Carlos, for those insights. It was very interesting talking to you about the sports and sustainable development. I think it’s an industry that we haven’t talked about yet in ATALKS, so it’s very interesting.

All yours.

Thank you for being here for your availability, and if you want to see more or gain more insights about sustainability, just subscribe to our channel to watch us or listen to us on any podcast platform. Thank you.

Thank you, Pauline. My pleasure.

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