In the 9th episode of our series of podcasts dedicated to the new EU Corporate Sustainability Reporting Directive, CSRD, we speak with Ross McCluskey, EVP for the EMEA region at Intertek. From his senior leadership position, Ross explains how important is to own and drive a sustainability agenda from the top of an organization, underpinned by a strong corporate and sustainability governance framework, including an integrated risk control and compliance approach.
Job title of speakers:
To gain additional insights about this subject, be sure to explore the other episodes of the CSRD series available on the Assurance in Action Podcast network.
Follow us on- Intertek's Assurance In Action || Twitter || LinkedIn.
In the 9th episode of our series of podcasts dedicated to the new EU Corporate Sustainability Reporting Directive, CSRD, we speak with Ross McCluskey, EVP for the EMEA region at Intertek. From his senior leadership position, Ross explains how important is to own and drive a sustainability agenda from the top of an organization, underpinned by a strong corporate and sustainability governance framework, including an integrated risk control and compliance approach.
Job title of speakers:
To gain additional insights about this subject, be sure to explore the other episodes of the CSRD series available on the Assurance in Action Podcast network.
Follow us on- Intertek's Assurance In Action || Twitter || LinkedIn.
CSRD Podcast 9 Recording - The Impact of CSRD on Your Organisation-Transcript
Catherine Beare Intertek 0:11
Hello and welcome to the 8th in our series of podcasts dedicated to the new EU Corporate Sustainability Reporting Directive, CSRD. I'm Catherine Bear, the Regional Director for Business Assurance in the UK and Iberia, and I'm joined by Ross McCluskey, today, our Executive Vice President for the Europe, Middle East and Africa region and also heads up our Government Trade Services division. Ross is going to reflect today on how CSRD will impact companies, not only from a reporting perspective, but also what challenges they could face in being ready to report.
Ross has been with Intertek Group for seven years now and started his tenure in the financial team, where he held the role of Group’s Chief Financial Officer from 2018 to 2021. Before that, he held various financial leadership roles in Inchcape, Greenhill and JP Morgan to mention just a few.
Hi, Ross, welcome and thanks for joining me today. Now I was really keen to get your take on a few points given your role in Intertek both from a senior leadership perspective and also actually having held the CFO role here. But also now because of your interaction with many of our clients on this topic. So firstly, would you mind kicking us off with some insights into how you view the role of senior leadership on addressing sustainability matters?
Ross McCluskey 1:47
Sure. Thanks, Catherine. And first of all, an absolute pleasure to be on today's podcast and look, thank you very much for the introduction as well. As for this topic, I think as you know, this is a subject I'm super passionate about both now in my current role you just described, but also when I was the Group’s CFO and through both those roles, it's clear that Intertek Sustainability goals have been key and center stage of all of other discussions with the board, our investors, our leadership teams and of course, all of our wider colleagues across Intertek group.
Our unique approach to Sustainability Excellence is absolutely central to everything that we do within this business. It starts with our purpose, first of all - bringing quality, safety and sustainability to life - and as well as our strong value network. It's in our corporate sustainability agenda, including in our net zero targets and indeed in our beyond net zero goals as well.
And I think we strongly believe that doing business the right way with a very systemic approach is the only way to truly deliver sustainable value to all of our stakeholders, whether that be customers, employees, suppliers, shareholders, regulators or the broader community and our sustainability agenda is absolutely underpinned by the strong corporate and sustainability governance framework that we operate, including our integrated risk control and compliance approach.
So within the Senior Leadership team here at Intertek, it is not only a front and center stage agenda item in every meeting, but it also forms risk and control cheques that we use to route those meetings and indeed our strategy sessions as well. We use our very unique and quite differentiated Total Sustainability Assurance, 10 principles to ground the way we look at everything, from our own people, our health and safety, our quality management, communications disclosures, community engagement, you name it.
And by owning and delivering our Sustainability Excellence, the leadership team here are focused and driven to engage with the right expertise both in and outside of the business to educate and form and validate our sustainability thinking and decisions.
And to bring that to life, let me give you a couple of examples, whether it's using our own environmental design consultation, when looking at new building constructions through to the sourcing of the best environmental and leading sustainability materials from our external suppliers, we make sure that we hold ourselves first and foremost to account and govern our decisions to make the right ones. Therefore, for me, senior leadership across any organization and in particular at Intertek, we need to own and drive the sustainability agenda. Creating the right sustainability culture sits and comes from the top.
Catherine Beare Intertek 5:02
Thanks Ross. Very clear now Ross, as you oversee the Europe region as part of your portfolio. I know that CSRD has been a major focus for you and the team of which includes me. And I was keen for you to share with the audience your views on the new legislation in general.
Ross McCluskey 5:25
Yeah, absolutely. A major focus of mine and very much, I know Catherine, a major focus of you as well and obviously the role that Intertek has to play in supporting our customers here is absolutely huge.
Both also from our internal journey on sustainability, we see it as a great opportunity to benchmark ourselves against CSRD KPIs and also ensure that we continue to strengthen our own delivery and reporting in this aspect. I know that during the last few podcasts, you've deep dived into a number of the KPIs under Environment, Social and the Governance pillars so I'm not going to repeat those here but what I think is worth reflecting upon is the impact that this can have on companies from a positive angle. I mean, there's no doubt that there will be a significant amount of effort that goes into compiling the reports and also collecting the data that will underpin that. And trust me, I know that from having done my previous role as the Group CFO here, but if a company sees this as an opportunity to embed or indeed strengthen their governance and management systems around sustainability, it will in turn, a significant return on the investment by strengthening the organization on multiple aspects and facets. A sustainable business is focused, it's competitive, it's resilient, it's agile and it's a business that will thrive both economically and through multiple different cycles. So my suggestion here is to make sure that we take this regulation as an opportunity not only to ensure that we have, you know, a compliance against the regulation, but also to help us tackle the major sustainability challenges that we see out there across the wider economy and countries.
Also, let's face it here you know, net zero has stepped up a notch again, and we all need to recognize that we must move and act faster than ever before. As a result, organizations must be held accountable and they need support to get there, right. It's not going to happen on their own, or indeed overnight and CSRD is helping to push that agenda forward.
But we know that brings with it a whole host of disclosure complexities. So when I'm speaking to a number of our customers, they are not only challenging what they need to report, but also on how they can speed up the delivery against the sustainability goals. And these are great conversations as we can together work as partners to help innovate and what is a very emerging series of work. But again, I think this is such a positive outcome that can come from the regulation that we're talking about at the moment.
And indeed, one final thought on the new regulation itself from CSRD is really around some of the unknowns on it at this stage. You know, we know that the first people to report to those that will be affected by the NFRD which although different means that these companies have some degree of experience on doing these sorts of disclosures. But there is still a lot of queries from, in particular SMEs and also companies outside of Europe about how they will approach reporting from a legal entity and country reporting perspective. So this is definitely a concern for many organizations and one that we need to kind of watch to see as the specific rules coming out governing this will be manifested.
Catherine Beare Intertek 8:45
Absolutely, Ross, and you know we'll keep our audience up to date as we get a hold of those informations. But you know it's great to hear some insights that you're getting from the customers. Could I maybe get you to expand on that slightly more and let us know because you're obviously having you know a lot of C-Suite conversations here, Ross, let us know a little bit more about some of the other challenges that you see organizations facing.
Ross McCluskey 9:13
Yeah, I mean, sure. And I think again, coming back probably to my last rule with the group is CFO in particular one of the big things that's coming up time and time again is around data collection. You know, gathering accurate and comprehensive data on ESG activities, there are impacts and the metrics can be a significant challenge, especially for smaller organizations or companies that have not got to grips with their supply chains fully yet. I mean, clearly we all have good access to financial data.
The level of scrutiny that's going to go on to our environmental data going forward is going to be just as high, but the level of structures in place to get it are not there yet at this moment in time. You know, companies often struggle to collect and report on the wide range of supply chain, environmental and socially related information in particular. And we know that a lot of companies have very little detail in the past on their Tier 1 suppliers and struggling therefore to assess risk properly within their business. They will also therefore struggle to drive sustainability commitments, never mind having a process in place to collect the data consistently and accurately and robustly. So definitely a major hurdle for many to overcome.
I think that measuring impact can also be hard for some of the KPI is particularly around supply chains and affected communities. You know, quantifying the actual social impact of CSR initiatives specifically can be difficult. And as we know, companies often struggle to establish meaningful metrics and benchmarks to track progress in this particular area. And I do think the wording of some of the CSRDKP is here are as prescriptive as they can be, but how companies respond here will be pretty critical.
Catherine Beare Intertek 11:01
Yeah, I think that's a really good point. And it'll be interesting to see.
How the first sets of data is interpreting those. Look Ross, thank you, that was really insightful and interesting to hear what you're discussing with customers. Do you have any final thoughts that you wish to leave the audience with today?
Ross McCluskey 11:22
Yeah, thanks Catherine. Look very happy to have participated today. I don't claim to be in any way an expert in this area, that's you from an Intertek perspective. But I know I'm absolutely privileged to be in a senior leadership position here at Intertek. And given how seriously we take sustainability, I do feel I've learned a huge amount over the last few years. So my final thoughts would be as I have mentioned take this as an opportunity to grow and strengthen your sustainability, governance policies and processes.
Being truly sustainable means much more than simply achieving our net zero targets. It's about demonstrating sustainability excellence end to end in each and every one of your operations. And as we know importantly, you know COVID-19 has simply demonstrated the critical nature of quality, safety and sustainability and how important they are to global supply chains and how vital health and well-being are to all of us as well, of course.
So my advice would be empower your people, your value chains, create a culture that enables them to grow, develop and innovate and move as fast as you can with your sustainability journey.
Make sure that every team and every site has access to the insights that they will need to make effective decision making to help drive your corporate sustainability agenda as well. And of course, offer them the wide range of technical training and education and support that they need. And Intertek is indeed here to help in that regard as well.
Catherine Beare Intertek 13:05
Great. Thank you, Ross, and thank you so much for your thoughts on the matter and indeed, your insights that you've deemed from our customers. I think that was a great set of insights that you shared with us.
So look, as a reminder of how Intertek can help on CSRD, there are indeed just four main ones that we would like to remind you:
1. Number one, to help understand your current CSRD readiness. We can help you to undertake a gap analysis to ensure that you have a clear view on your organization readiness and we'll work with you to define clear action points to address any gaps to prepare you for your first submission.
2. Two through training to ensure everyone understands what is required to prepare for your submission. This can be delivered to a range of different teams and functions across your organisation and will be bespoke to best fit your requirements.
3. Thirdly, we can also provide auditing solutions in some markets. We will also hopefully be able to act as an audit, an audit term auditor of your CSR Directive reports. So a one single provider supporting you from your early preparations through to your audit submission.
4. And finally we have partnered with ESG Playbook, a leading SaaS reporting and solution provider bringing in 1 tool all required for your data collection, aggregation, tracking and reporting ESG needs.
For more information visit https://www.intertek.com/assurance/eu-csrd/
So this concludes today's podcast. Thank you for listening and watch out for further CSRD episodes to help with your journey of compliance.