Latest news with #MortenJohansen
Forbes
03-07-2025
- Business
- Forbes
From ESG To Genuine Impact: A Sustainable Path To Effective Governance
Morten Johansen is the COO of DP World Americas. At first glance, today's focus on environmental, social and governance (ESG) aligns with longstanding business principles. I've found this to be particularly true for supply chains, where ESG considerations run from labor rights to greenhouse gas output. In effect, corporate governance was integrating central elements of ESG well before the term gained popularity. But ESG is more than a metric—it's also a pathway to resilience. In an era of compounding disruptions, I've seen how ESG-driven strategies can not only foster responsible practices but also serve as buffers against volatility. Whether it's supply chain disruptions, regulatory shifts or climate-induced resource scarcity, companies grounded in ESG principles are often better positioned to adapt, recover and thrive. One proof point is found in an annual report from CDP, which determined that corporate liability for supply chain-related environmental risk could cost upward of $120 billion by 2026. Falling behind on this track could result in decreased competitiveness, exacerbated by the reality that these expenses trend 11.4 times higher than those associated with business operations. In other words, ignoring ESG imperatives directly threatens long-term resilience. Understanding Inconvenient Truths Amid our steep real-world challenges, there is a general consensus for enhanced sustainability efforts to address escalating global climate impact. However, business and government pledges to offset C02 emissions by nearly four gigatons by 2030 are falling short—by about 70%—of achieving the 1.5°C target set by the Paris Agreement. In recognizing these shortfalls, McKinsey Sustainability issued a leadership call to increased sustainable action: • Decarbonized Assets And Value Chains: Companies reducing costs and emissions can gain market share, providing financial support for carbon neutralization. • Climate Technologies, New Green Businesses: Demand for green technologies could generate up to $12 trillion annually by 2030 and facilitate innovations for a more affordable transition. Green transition funds, industrial venture capital and infrastructure growth funds could enable up to $3.5 trillion in annual financing by 2050. • Socio-Economic Implications, Net-Zero Transition Tools: Understanding affordable energy access, investment requirements, jobs impact, growth, competitiveness, lived environment and health can help leaders better define pathways forward. • Collaborative Efforts Against Environmental Threats: Public and private sectors, working with philanthropic organizations, can catalyze solutions. • Early Action: Pace-setters can help define nature-positive progress. These measures aren't only about mitigating harm; they're about embedding durability into the business model. ESG isn't charity—it's strategy. It's about safeguarding the future and adapting to what's already here. Refocusing Sustainability In my experience, staying grounded is important in a time when business leaders are being tugged between the hard financial realities of environmental fallout and the increasing number of legislative proposals that could restrict the use of ESG criteria in investments. While ESG filters provide an external benchmark, I believe that resilient governance requires business leaders to make a deeper commitment to stakeholders. Prioritizing sustainability—along with risk mitigation and cost-efficiency—can set companies apart and attract investors by bolstering regulatory compliance and contributing to long-term viability, flexibility and brand strength. Holding Vendors Accountable Addressing challenges with a balanced mindset is important, and I've found that authentic sustainability efforts can encourage consideration of market dynamics and lead to fair governance. For example, the supply chain is ripe with potential. According to CDP, only 37% of suppliers hold vendors accountable for emissions reduction. Buyers play an important role in fostering transparency and optimizing processes among suppliers, so by recognizing the cost risks associated with environmental impact, leaders can advocate for sustainability across their networks and spheres of influence. Resilience begins upstream. In my experience, when companies set clear expectations with partners and implement accountability mechanisms, they can reduce vulnerability to environmental, reputational and operational disruptions. Use Cases: Google And Walmart Google is at the forefront in adopting renewable energy for its data centers, meeting "67% of its data center electricity needs with renewable sources on an hourly basis" and even reaching about 90% in some facilities. Leveraging AI, they've pioneered cross-industry solutions, including the development of data center load shifting that optimizes energy-intensive tasks to bolster grid stability and align with abundant renewable energy periods. Tying its sustainability initiatives to emerging technologies, Walmart employed blockchain tools to empower real-time traceability of perishable food products along its supply chain, from producer to delivery dock. This provided improved pathways for identifying the sources of foodborne diseases while boosting the efficiency of food delivery and reducing waste—wins for both the bottom line and the environment. Frameworks For Sustainable Business In order to boost your company's financial viability while yielding external benefits, I believe it's important to go beyond mere compliance and align with fundamental sustainability principles. These principles can also increase your organization's ability to absorb shocks, respond quickly to change and seize new opportunities in uncertain markets. While each business approach will vary based on internal and external influences, here are three best practices for creating a unified framework that encompasses impactful sustainability programs: • Integrated Reporting: Combine your financial and nonfinancial information to offer a holistic view of the company's performance, emphasizing its impact on various capitals. • Sustainable Development: Align your strategies to the UN's Sustainable Development Goals to help address global challenges. • Triple Bottom Line: Expand your bottom line to include social and environmental components; this can help hold your company accountable far beyond financial performance. The pursuit of sound, broadly beneficial governance requires real and honest action. In many companies, earnings are the primary focus, which is why leading with strength, purpose and a low tolerance for rhetoric is important to delivering productive sustainability efforts. I believe that by keeping these factors in mind, leaders can steer their organizations on a clear path toward enhanced profitability, stronger resilience and meaningful contribution. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Associated Press
19-02-2025
- Business
- Associated Press
Sustainability as a Financial Driver: How Green Practices Boost the Bottom Line
For years, the relationship between sustainability and profitability in supply chain management was viewed as a zero-sum game. Businesses operated under the assumption that environmentally responsible practices were a necessary but costly obligation — a price to pay for regulatory compliance and reputational safeguarding. That narrative is rapidly evolving. An industry study conducted by DP World and Supply Chain Dive's studioID polled 150 professionals in operations, supply chain, and procurement roles throughout various industries to reveal a decisive shift: 82% of respondents believe companies that prioritize supply chain sustainability experience improved financial performance over time. This data marks a critical inflection point, repositioning sustainability from a burdensome requirement to a strategic lever for financial growth, efficiency, and resilience. These findings — and more — are captured in DP World's report, titled ' Sustainability Drives Financial Benefit Across Supply Chains,' available for download now. The Strategic Rise of Sustainability Sustainability is no longer a fringe concern. It has ascended the strategic priority ladder for corporations globally. According to the survey, 71% of respondents indicate their organizations have increased their focus on supply chain sustainability and decarbonization over the past three years, with 25% reporting a significant increase. This upward trajectory is set to continue, with 80% planning to increase their resource allocation towards sustainability initiatives over the next three years. This evolution is not merely cosmetic. Companies are backing their rhetoric with resources: increased headcount, budgetary expansion, and organizational restructuring. Sarah Mouriño, Senior Director of Sustainability at DP World Americas, notes, 'Sustainability has expanded to encompass diversity and inclusion, data security, and other elements that drive organizational resilience.' Financial Gains and Competitive Advantage While consumer demand and regulatory pressures remain drivers, financial and operational benefits are increasingly steering sustainability investments. Efficiency gains and cost reductions ranked as primary motivations, with 36% of respondents citing these factors as key drivers. Additionally, 30% view sustainability as a means to enhance supply chain resilience—a critical attribute in an era punctuated by disruptions. Nearly one-third (32%) see sustainability as a critical competitive advantage, emphasizing the strategic edge it can provide. Morten Johansen, Chief Operating Officer of DP World Americas, emphasized this point: 'As we observe the transformative shift in supply chain practices, it's evident that sustainability is not just a trend but a foundational element for modern business strategies. This report highlights how integrating sustainability measures can serve as a catalyst for substantial improvements in both economic efficiency and strategic innovation.' Bronwyn Pountney, Environment Manager for DP World Canada, highlighted the tangible incentives driving this shift. 'The Port of Vancouver's EcoAction Program offers shipping lines up to a 75% discount on harbor dues for utilizing shore power,' she explains. Such programs exemplify the growing synergy between environmental responsibility and cost efficiency. Value Propositions Driving Adoption Organizations are increasingly evaluating sustainability through a business-first lens. When assessing the adoption of supply chain sustainability initiatives, the survey identifies compliance with regulatory requirements and risk reduction as top priorities. However, cost savings through efficiency improvements—such as reduced waste, faster processes, and optimized energy consumption—resonate deeply with supply chain managers traditionally measured by cost and performance metrics. Mouriño underscores this alignment: 'Reducing emissions often results from improving operational efficiency. Once companies recognize these parallel benefits, the business case for sustainability becomes undeniable.' Climate Concerns and Cost Pressures Despite this momentum, concerns linger. Cost remains the most significant barrier to scaling sustainability efforts, with 65% of respondents citing it as their primary challenge. Regulatory uncertainty and operational complexity further compound hesitancy. Nonetheless, the trajectory is clear—supply chain leaders are moving forward, driven by a blend of necessity and opportunity. Scope 3 Emissions: The Next Frontier Perhaps the most significant development on the horizon is the focus on Scope 3 emissions—indirect emissions from suppliers and partners. While the U.S. Securities and Exchange Commission (SEC) recently paused mandatory Scope 3 reporting, other jurisdictions like California and the European Union are advancing such requirements. Forward-looking companies are not waiting. According to the survey, leading strategies to reduce Scope 3 emissions include: These moves signify a broader transition from passive reporting to proactive transformation as companies prepare to adapt to anticipated regulations, regardless of the current SEC position. Carbon Accounting as a Business Imperative As organizations pursue emission reductions, carbon accounting has emerged as a foundational capability. The survey reveals that 35% of respondents are enhancing collaboration between accounting and supply chain departments to improve carbon data accuracy. Investment in emission-tracking systems and the setting of reduction targets are also gaining traction. Transportation — a major emission source — is under particular scrutiny. Companies are adopting multimodal solutions, shifting from air to sea freight, and exploring alternative fuels. Apple's transition from air to ocean freight, cutting emissions by 95%, is a widely cited benchmark. UPS, similarly, has made strides toward using 40% alternative fuel by 2025. Partnerships: A Sustainability Multiplier Collaboration is proving indispensable. Supplier sustainability credentials are now pivotal in partnership evaluations, with 46% of respondents stating that a partner's decarbonization capabilities significantly influence supplier selection. Pountney points to DP World's initiatives in Vancouver, where low-carbon fuels and electrified port equipment are transforming container operations. 'When partners see us reducing our Scope 1 and 2 emissions, they realize we can help reduce their Scope 3 footprint,' she says. 'It's a win-win.' Suppliers are increasingly viewed as sustainability enablers. Key expectations include: The Road Ahead The DP World survey findings signal a paradigm shift. Sustainability is no longer a corporate social responsibility checkbox. It is an engine for growth, efficiency, and resilience. Companies that integrate sustainability into their supply chain DNA will be best positioned to navigate the complexities of a rapidly evolving global economy. As Mouriño aptly concludes, 'The business benefits are becoming more widely acknowledged. This evolution will only accelerate.' The future of supply chains is green — and increasingly, it is also profitable. Download ' Sustainability Drives Financial Benefit Across Supply Chains ' today. Survey Methodology DP World collaborated with Supply Chain Dive to conduct an online survey, polling 150 respondents in operations, supply chain, and procurement roles across various industries. The respondents represented a diverse range of sectors, including industrial manufacturing (39%), healthcare/hospitals (20%), consumer products manufacturing (9%), and technology (9%). The largest segment of respondents came from organizations with annual revenues between $101M-$500M (19%), followed by $51M-$100M (16%), and $1.1B-$10B (15%). The survey respondents were based in the United States and Canada.
