PwC stands as a premier global consulting firm, boasting an expansive network of over 364,000 professionals in 151 countries as of March 2024. In Norway, PwC’s presence is marked by over 2,600 employees spread across 27 offices, providing a comprehensive suite of services that include audit, consultancy, tax, and duty. The firm’s reputation is underscored by the trust of 87% of Fortune 500 companies, with PwC advisors working in close collaboration with client management. The demand for sustainability-focused advisory services has seen a rapid expansion in recent years. This growth is driven by increasing awareness of environmental, social, and governance (ESG) issues, regulatory changes, and the recognition that sustainable business practices can offer a competitive advantage.
Stine Ferguson, a consultant with extensive and diverse management experience, from various dynamic companies
We are fortunate to have had the opportunity to engage in a conversation with Stine Ferguson, who serves as the Head of Sustainability at PwC Østfold. Stine’s academic and professional journey has been deeply intertwined with ESG over several years, most recently with Solid Gruppen before her transition to PwC in 2023. As one of the most proficient experts in Østfold, Stine is GRI (Global Reporting Initiative) certified, (the GRI Standards are closely aligned with the new European Sustainability Reporting Standards (ESRS)). Her credentials also include completion of the “Corporate Sustainability Reporting Academy”. (the academy provides seven days of intensive training in the European Sustainability Reporting Standards (ESRS) and assurance on sustainability reporting), and an executive master’s module from BI titled “Sustainability in Practice”. Over the past 15 years, Stine has held various leadership roles in business and served on several boards within the tourism and events industry, in the road marking contractor industry, NHO regionally, as well as non-profit boards.
Stine is deeply committed to making decisions, based on data. Enthusiastically leveraging analytical tools and methodologies for a data-driven approach. With her strategic business acumen and strong execution capabilities, she spearheads the sustainability agenda and is fervently dedicated to demystifying new guidelines and requirements in the sustainability field.
“Meeting the needs of the present without compromising the ability of future generations to meet their own needs.” This collective responsibility requires companies to not only operate profitably but also to deliver sustainable solutions. It’s crucial that we establish a systematic approach to infuse sustainability throughout our organization and value chain. By integrating the environmental and innovation movements while preserving profitability, we can pave the way for a more sustainable planet.” – Stine Ferguson
Sustainability as a competitive advantage
We sought Stine’s perspective on the intersection of sustainability and competitiveness – is there a need to choose between the two? Stine offered her insights: In the foreseeable future, we will see an increasing recognition that sustainability is synonymous with competitiveness. Businesses are proactively striving to lower emissions in line with the Paris Agreement, combat natural resource depletion, and tackle issues of corruption and social inequality. Norwegian companies are also mandated to comply with new regulations and fulfill various reporting obligations under the EU’s Green Deal. The auditing industry has been assigned a significant role in sustainability reporting, posing a new challenge. It’s crucial to understand that this signifies a period of transformation for auditors and a journey of evolution for companies. Reporting must cover the company’s entire value chain, addressing a broad spectrum of environmental, social, and governance aspects. This demands expertise in a variety of fields and careful management of numerous data points. As an audit firm, our deep understanding of the company’s business model, value chain, strategy, and organizational structure positions us to provide valuable insights.
Moreover, PwC prides itself on a team of informed employees who are proficient in the regulatory landscape, capable of identifying relevant systems, processes, and sustainability issues across diverse industries. I am convinced that sustainable strategies and decisions will lay the foundation for future profitability. PwC partners with companies to devise strategies and action plans that ensure the business model and strategy are in sync with the transition towards a sustainable economy and the ambitious 1.5-degree target of the Paris Agreement.
Varied maturity levels and requirements in the corporate landscape
The Corporate Sustainability Reporting Directive (CSRD) was introduced in the EU in January 2023, superseding the existing Non-Financial Reporting Directive (NFRD) from January 2024. In our conversation with Stine about her experience with CSRD in the business context, she underscored the diverse maturity levels and requirements among Norwegian companies. We advocate for a tailored CSRD journey for each business, considering their unique starting point and aspirations. At PwC, we provide support throughout the entire process, from conducting a double materiality assessment, performing gap analysis and creating a roadmap, to developing the taxonomy, sustainability strategy, internal control, and ultimately, reporting and attestation.
Additionally, the EU has introduced a voluntary consultation directive for small and medium-sized enterprises (VSME ESRS). This voluntary standard enables non-listed SMEs to respond efficiently and proportionately to requests for sustainability information, encouraging their participation in the transition towards a sustainable economy. We foresee this initiative easing financial pressures on smaller businesses and simplifying sustainability reporting by introducing a set of three different simplified modules, companies can use to initiate their reporting. These simplified datapoints standards will gradually expand towards the CSRD.
Reducing emissions: a key ESG performance indicator
What key performance indicators are crucial to monitor? While sustainable development may seem straightforward in theory, it demands considerable effort to implement and assess in practice. The bedrock of sustainable development rests on three key pillars: environmental, social, and economic factors (commonly referred to as E-S-G). Ensuring adequate care for everyone worldwide, is vital to support sustainable development. Given the impending threat of global warming, the international community is likely to confront unparalleled challenges. Climate change has the potential to significantly affect all three key areas mentioned above. Therefore, Stine underscores the importance of reducing emissions as a pivotal indicator of progress.
CSRD Fuels Market Growth
Historically, sustainability reporting has grappled with inconsistencies and deficiencies in both quality and quantity. This can be attributed to the absence of specific legal requirements and the presence of various voluntary sustainability standards.
With the EU’s objective of aligning sustainability reporting with financial reporting standards, businesses are now obligated to maintain the same level of reliability and consistency in their data. The introduction of the CSRD enforces definitive reporting criteria and verification processes to ensure the accuracy of both qualitative and quantitative information. This transition from voluntary to mandatory reporting has encouraged more companies to formalize their sustainability initiatives and seek expertise to comply with legal standards.
As businesses adjust to this stringent directive, the demand for skilled resources and guidance on double materiality analysis becomes increasingly evident. Unlike traditional financial reporting, sustainability reporting requires setting clear targets for future impact and obtaining third-party certification. This evolution underscores the escalating importance of sustainability practices in the contemporary business landscape.
Read more about Double Materiality Assessment
Increased Emphasis on Non-Financial Data
We asked Stine about the key challenges PwC has identified for companies aiming to integrate sustainability into their operations. The significance of a company is no longer solely determined by its financial data, as was the case in the past. Non-financial information has become increasingly crucial. The EU has adopted an ambitious environmental agenda, which impacts Norwegian businesses through various means such as reporting mandates and a green activity classification system. Given the impending stringent regulations, it is essential to stay informed and continuously adapt to ensure readiness when these regulations apply to your business. Small businesses must also understand the reporting requirements as they are often part of larger value chains and can quickly be affected by other entities’ reporting responsibilities. This could include demands for sustainability data from clients, financial institutions, investors, or even through competitions and public tenders. Companies must comprehend the significant shift needed to elevate sustainability information to the same level as financial data. This transition will require time, expertise, and robust systems for success. Amidst reporting, it is crucial not to lose sight of the goal, which is steering towards a more sustainable direction, as Stine elaborated.
Sustainability to become integral to top management and board work
In our exploration of sustainability, we delve into our future beliefs. We asked for Stine’s insights, and here is her analysis: The upcoming regulations will ensure that sustainability data provided by businesses is both comparable and reliable, and easily accessible to stakeholders. Moving forward, the transparency and visibility of companies’ sustainability initiatives are set to increase, thereby diminishing the occurrence of greenwashing, Stine says. The overarching goal is for these requirements to lead to more impactful, science-driven strategies and actions, accelerating the pace of our transition. Looking into the crystal ball, I foresee a significant shift in how management and boards across industries view sustainability in the coming years. Mere good intentions will no longer suffice, with those unwilling to adapt or prioritize change facing diminished prospects for success. Sustainability is set to emerge as a pivotal economic factor, likely shaping the bottom line significantly.
Inevitability of technology-driven sustainability reporting
With an abundance of data to collect, businesses are now venturing into unexplored territory in their reporting requirements. Beyond merely amassing vast amounts of data, companies must ensure the accuracy, timeliness, and auditability of their information. Looking forward, technology-driven reporting promises to enhance the quality of information while minimizing human errors.
Companies subject to CSRD regulations must assess their environmental impact and consider how climate change will affect their future value creation. These companies are required to disclose their greenhouse gas emissions, and strategies for reducing them. Utilizing a climate account enables businesses to monitor both direct and indirect emissions, facilitating emission reduction efforts. The GHG protocol is used when compiling climate statements to ensure accuracy and efficiency. By employing tools like LCA.no that adhere to international standards and use research-based data, companies can ensure the quality of their environmental reporting. Additionally, having an independent third party validate the environmental declaration method further bolsters the system’s credibility for environmental accounting purposes.
Guidance for businesses prioritizing sustainability
Navigating through a complex landscape of frameworks and expectations, it can be challenging to prioritize sustainability and reporting in business operations. For companies looking to make sustainability a top priority, my advice would be to conduct a comprehensive double materiality analysis. This analysis will provide valuable insights into the company’s impact on the environment and society, as well as how sustainability can drive long-term value creation. By sharing this information with both internal and external stakeholders, businesses can identify risks, opportunities, and drive positive changes for the planet.
Furthermore, key success factors include leveraging new regulations and sustainability directives to enhance stakeholder engagement and strategy development. The successful implementation of these efforts is heavily reliant on the management and the board taking a leading role in championing them. Implementing the right technology is essential for efficient and high-quality reporting, while fostering a commitment to key sustainability areas internally and externally.
Lastly, remember that a sustainability report should be informative, trustworthy, comparable, understandable, and verifiable to effectively communicate the company’s sustainability efforts.
Common mistakes in companies’ sustainability efforts
Some companies often make the mistake of focusing on small sustainability measures and highlighting them, rather than addressing the significant emission drivers within their core business. Embracing sustainable choices challenges our routines and impacts the lifestyle we’ve cultivated, leading us to resist change. Many individuals and businesses experience a discrepancy between their desired level of sustainability and their actual practices, known as cognitive dissonance. This psychological discomfort arises when our beliefs and actions are not aligned. This challenge is also prevalent in businesses, as it can be difficult to implement behavioral changes across an entire value chain, even if the core business has a substantial impact on environmental, social, or governance factors that may not be immediately visible in day-to-day operations.
Many companies are implementing a variety of sustainable practices, both big and small. While it’s important to showcase these efforts, it’s crucial to effectively communicate information regarding sustainability and social responsibility. However, some companies falter by failing to align their communication with their actual implemented measures, which are vital for the company’s success. Reports often suffer from disorganization, redundancy, and a lack of coherence, sometimes also, making them unnecessarily lengthy.
“Greenwashing involves deceptive marketing tactics, portraying a product or business as more environmentally friendly than it truly is, masking the true impact on climate, nature, animals, biodiversity, and society.” – Stine Ferguson
Making selective claims about a product being “green” or “ethical” based on limited characteristics without considering all significant aspects is a common practice. An example of this is using recycled packaging for a product that is otherwise unsustainable. While this type of greenwashing can sometimes be deliberate if claims are carefully chosen, it often happens unintentionally due to a lack of understanding about sustainability in marketing and communication.
The importance of measure your carbon footprint
Reporting can sometimes be a time-consuming and costly process, especially for companies involved in complex value chains with diverse goods and services across various business models. The importance of Corporate Social Responsibility and Disclosure (CSRD) cannot be overstated. It is essential for companies to annually report on their strategies for addressing social and environmental challenges. To meet CSRD requirements, gathering primary data is crucial. This includes collecting environmental data on purchased products (such as product Life Cycle Assessments) to incorporate into measurements. The reporting and data collection processes must be robust, transparent, and verifiable, with external audits becoming mandatory for CSRD compliance. While social challenges may require a different approach, environmental data can be consistently monitored and measured.
For an accurate, reliable, and readily available environmental footprint, investing in a comprehensive carbon footprint platform is highly recommended. This empowers your business to have control over data, track progress, and conduct yearly footprint assessments.
In this article, you have gained valuable insights into Stine Ferguson and PwC’s dedication to sustainability. Discover practical tips for implementing sustainability practices in your business and understand why ESG is crucial for top management and board decisions. We extend our gratitude to Stine for sharing her expertise and eagerly anticipate her continued impactful advisory work for PwC’s esteemed clients.