THE DIPLOMAT’S SUSTAINABILITY AGENDA –IV
Erdoğan KÖK
Ambassador (Ret.)
Senior Advisor at Ecosolis

Are we ready for the New Normal?

We can summarize the developments in a simple calendar related to sustainability as following:

1972-2000 Meetings and thematic discussions in international institutions and organizations,

2000-2015 Consensus on core principles and clear timetables

2015-Today Signing of key agreements and enactment of implementing legislation, making measurement, transformation and reporting processes mandatory.

As can be seen, we are no longer discussing the basic concepts related to this issue. Great progress has been made in measuring climate change, global warming and the total fight against over-exploitation of resources. Environmental, social, governance, digitalization and sector/product metrics can now be measured at a level that can be scored and all economic, commercial and financial relations are based on these metrics. Value and risk measurement has become a must for trade and investment.

The first reaction I get from business circles and friends when I talk about sustainability is as follows: There is still a long time until it reaches to us; our people will find a solution to get around it. Usually our business circles cite ISO standards as an example, saying that standard certificates can be easily purchased at a nominal price. However, they act as if they are virtually unaware that foreigners who buy goods and services from our country do this trade by prioritizing their own research on standards.

Sustainability reporting has entered the legislation of our country.

Companies in the EU and Western countries are now obliged to examine each company in the supply chain one by one and work with those that comply with the legislation.

If you have paid attention recently, there has been a considerable increase in the number of news, comments, research, articles and books on the future of the world. For example, Yuval Noah Harari’s book Nexus is on the bestseller list. Publications by our citizen Daron Acemoğlu, who won the Nobel Prize for economics. At the heart of all these debates are digitalization, climate change, demographic developments (aging and migrant growth), the weakening of democracies, the re-establishment of geopolitical balances, and the end of abundant money and its circulation in the world. All of these issues are interrelated and ultimately it is possible to fit them all into the concept of sustainability.

We mentioned earlier that companies are moving from profit maximization to value maximization.  It is important for our companies to pay due attention to sustainability and be prepared for what we can call a new “technical barrier” that is coming. Otherwise, they may face significant damages in the coming issues such as “carbon regulation at the border” and “emissions trading”. Sustainability reporting is still mandatory for large companies, but timetables are already published for the SMEs. Actually all companies regardless their sizes will face similar regulations when they are in the supply chain.

Next Posting: Trump and Sustainability