Director Spotlight - Jennifer Roedding

Director Spotlight is a regular feature that provides an opportunity for a prominent director to discuss practical insights and critical developments on climate governance important for boardrooms. Chapter Zero Canada recently spoke with Jennifer Roedding, Director, and Executive in Residence at the Hub for Sustainability Integration at the University of Waterloo. Here are the highlights of our recent discussion with Jennifer about her thoughts on how Canada is progressing on sustainability and specifically climate, how organizations are doing at integrating sustainability into their business, her thoughts on trends in the space, as well as advice to fellow directors.

Jennifer, as the Executive in Residence at the Hub for Sustainability Integration at the University of Waterloo, how well do you think Canadian organizations are doing with integrating/embedding sustainability into their governance, strategy, and business practices?

Let’s take a step back first. I’ll define what I am referring to as “sustainability”- in my mind that's progress towards the United Nations’ seventeen Sustainable Development Goals. So that would be a broad definition of the word, incorporating climate but also social aspects of sustainability. Now let’s look at the hard evidence: the United Nations does a ranking every year of countries’ progress on achieving their Sustainable Development Goals. Last year, Canada ranked 25th. Europe is still quite a bit ahead of Canada as a country. Having said that, we are still progressing, although progress has slowed. We cannot take our foot off the pedal.

I would say as a country we are doing better in some of the social aspects of sustainability than in climate- the UN has ranked Canada such that we are almost moving sideways in terms of progress on climate. Our country goal for 2040 is to reduce emissions by 40% from 2005 levels. Looking at the scientific analysis, we will not achieve that goal unless there are some significant changes and unless organizations really start paying more attention, and boards can really help to drive that. Having said all of that, at an organizational level, businesses are overall doing a really good job at integrating sustainability. Even the ones that are not the heavy emitters. And how are they doing this? By looking at every single decision that the organization is making and asking “How does this impact sustainability?”.

Organisations are being driven by a couple of reporting standards internationally. OSFI, for the banks and financial institutions in Canada, is making reporting for those institutions mandatory this year with Guideline B-15 (Climate Risk Management). That will have a trickle-down effect for companies they invest in and loan money to. And in my eyes, that’s a bonus because anything that you monitor and measure gets looked at.

Forward looking, I would say organisations are getting up to speed, they're starting to learn more, and the boards are more informed. What's really key is going to be putting the metrics in place- looking at what's important for your organisation and setting those targets. Climate is a key area. Even outside of the biggest emitting industries- oil and gas, agriculture and heavy transportation- how are organizations making decisions about how they can most materially contribute to sustainability, establishing their baseline and setting long, medium and short term goals?

How do you see boards playing a pivotal role in driving the integration?

Boards need to be well versed in understanding principles of ESG or sustainability. They need to be educated- and I already see that happening. If you think of a board's role as governing, setting strategy, and managing risks, their biggest role is asking questions to address those issues. But I would say that for boards the thing that is going to really move the needle is oversight of how the organization is measuring progress on sustainability- what is our definition of success? If it's purely profit, sustainability may not be as much a priority. If sustainability is important to an organization, it needs to have metrics in place for the C-suite and organization, to evaluate performance and measure progress.

As a whole, the board's role is to assist in setting those priorities and metrics, and management has to embed sustainability into operations, policies, procedures, capital planning etc.

What do you think the biggest challenges seem to be for organizations trying to make meaningful progress on climate?

If I compare Canada’s progress to Europe’s and look for factors that may be contributing to the difference, Europe has standards and legislation in effect. Europe has a strong North Star on sustainability- it knows where it’s going. Harmonization of the laws has also been critical to Europe’s success and something that would be helpful in advancing Canada’s ESG initiatives.

Also, I would say in Canada the economic downturn we experienced has caused organizations to move focus from sustainability to profitability because it is something with more immediate impacts that they are trying to manage. I think that's where board priority setting is really important- we need to keep sustainability at the forefront and measure it against goals to keep us moving forward. It’s possible to be both economically successful and sustainable- just look at some of the corporations in Europe. We can look to them and what they are doing so that we don’t have to recreate the wheel.

What do you think are going to be the biggest trends in climate governance in Canada over the coming year?

I think one of the biggest trends will be around data. It is so critical when it comes to sustainability because you cannot track your progress without data. Also you can protect yourself legislation-wise by having the data to support what you're disclosing. Investors are looking for sustainability data. So I do think that companies that gather and manage data, and look at economics as well as sustainability, will be quite successful.

What advice do you have for directors who want to continue to make an impact on climate change in this uncertain political environment?

I’m sure there will be a lot of interesting developments this year. I would say to directors: be educated, understand what sustainability is. I'm still seeing a broad range of understanding of what it is. Starting there, but also understanding what can be done about it? What are the options? There are lots of good articles, the UN has great resources, as well as the Climate Institute, as well as the Climate Governance Initiative, of course.

It's important to also understand, from a risk perspective, not only your company’s impact on climate, but climate impact on your company as well- a double materiality view. By really understanding this, your opportunities will come into focus. Then it’s about moving on those opportunities. The companies that are able to adapt and turn risks into opportunities will be quite successful.

Political uncertainty is a challenge for boards. When you're doing your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, there is a threat in this uncertain political climate. That’s a risk. Within the Canadian Sustainability Standards, it will be expected for companies to do scenario analyses around climate change- worst case, best case and what each means for the company. I think that’s always a good practise when you're doing your strategy.

How do you keep momentum up amidst the uncertainty? Keep your eye on your North star. There will be distractions. Boards need to focus on corporate strategy, managing risks, and navigating it in a way that stays true to its sustainability goals . Monitoring for changes in assumptions, conducting scenario analysis, and course correcting as things become known.

 

Full Biography:

Jennifer Roedding, CA/CPA, ICD.D, DEP, GCB.D, CCB.D, MAcc

Jennifer is President of Roedding Associates Management Consultants Inc., which provides business transformation expertise across multiple sectors internationally. She is an accomplished and innovative Corporate Director, Executive Leader, and Business Transformation Consultant. She has a proven track record of adding value, having assisted hundreds of organizations to transform to achieve greater profitability, efficiency, and effectiveness in alignment with their strategies. 

Jennifer’s distinguished career in both audit and consulting includes 25 years at a national firm, where she was National Consulting Partner for telecommunications and technology. Jennifer is a Corporate Director for Ontario Lottery and Gaming (OLG) and Chairs its Audit, Risk Management and Compliance Committee. She was also Chair of the Board of Directors for Alimentiv, an international biotech and clinical research organization operating in 62 countries.  Jennifer is currently an elected member of CPAO Council, serving her second term. Jennifer is the Executive in Residence at the Waterloo Hub for Sustainability Integration.