Meet the expert: Gretchen Jonker to speak at #RISK Amsterdam

Taking place at RAI Amsterdam through September 27 and 28, #RISK Amsterdam examines the trends and best practices organisations are employing to navigate today’s rapidly evolving risk landscape.

Gretchen Jonker is appearing at #RISK Amsterdam day 2 to discuss corporate “purpose” and steps companies can take to set effective boundaries to guide growth. 

Below, Gretchen talks about her professional journey to date, and introduces the key themes in her #RISK Amsterdampanel debate.

Could you outline your career pathway so far?

My career journey has been definitely not followed a straight line. I initially embarked on a path in agriculture, earning my first three degrees in the sector, and began my professional life as a government official, working on agricultural policy and trade.

My first role in United States Department of Agriculture (USDA) was as a plant scientist exploring biodiversity in Alaska. When my life took a turn and I moved closer to family, I continued government work in various agencies in Washington DC, where I spent around 12 years in various policy and trade-related jobs. This opened doors that I never imagined including live and working in a dozen countries giving me access to people and cultures that I had no idea excited. I truly fell in love with the world!

After deciding to set down some roots, I went into private industry. Over the years, I have held diverse roles on a global and regional scale, primarily centred on ethics, compliance, and anti-corruption efforts, with a strong emphasis on behavioural aspects. I had the privilege of working at the World Economic Forum, where my efforts were geared toward combating corruption and promoting transparency.

Ultimately, my passion for addressing human rights violations in the agricultural sector led me to take an educational sabbatical. During this time, I pursued a Master’s degree in Human Rights Law, with a focus on the role of corporations in advancing the human rights agenda.

This is where my interest in ESG and anti-corruption efforts intersect, as I firmly believe that holistic sustainability, especially within corporations, requires a comprehensive approach that includes a strong sense of purpose. Ensuring honest and transparent reporting of ESG data is a crucial part of this equation.

What is meant by corporations having an ESG “purpose”, and why is it significant today more than ever?

ESG, or Environmental, Social, and Governance, is the current buzzword that has taken the place of “Corporate Social Responsibility.” I am not certain that this is a positive change, but it is where we are. On the positive side, this shift reflects a broader and more structured approach to evaluating a company’s impact on these three vital categories. On the other hand, the term ’ESG’ seems to be thrown around more as marketing speak and removes the most important word ‘responsibility’.

The rise ESG’s popularity is in large part a shift in generational momentum, changing investment landscapes, and new regulations. These factors have elevated the importance, and risk, of ESG considerations in decision-making. A significant impetus for this movement is the growing dissatisfaction and restlessness among the younger generation. They are increasingly vocal about their concerns and frustrations with the status quo. In essence, if a corporation wants to secure future customers, then changes must happen.

The urgency of various global challenges, such as climate change fewer resources supporting more people, and geopolitical instability, has put us into crisis. These factors have led to a realisation that the way things have been done in the past is no longer acceptable. The call for change today is far stronger than what we have experienced in history, underscoring the need for comprehensive ESG initiatives and corporate social responsibility.

How do stakeholders spot greenwashing and determine the authenticity of an organisation’s ESG purpose?

In the world of corporate social responsibility, the issue of authenticity has become increasingly important. Many corporations, in their efforts to project a socially responsible image, often project an image that just is not reality – whether it’s greenwashing, blue washing, or any other label.

This is the practice of exaggerating claims or intentionally misleading the public about their environmental or social efforts. This behaviour is a plague to real progress and recognising authenticity in these efforts has become paramount.

One key marker of authenticity lies in a company’s willingness to openly acknowledge its mistakes. Honesty and transparency are crucial. When a company admits to its missteps and openly discusses how they plan to correct them, it’s a positive sign. There’s a company called Tony’s Chocolonely – a prime example of this authenticity.

Founded by individuals who recognised the slavery problem within the chocolate industry, they were driven by a genuine desire to make a change. Even as the company has grown, its core mission remains unchanged – combating slavery in the industry. Tony’s Chocolonely’s honesty and accountability in addressing issues further underscore their authenticity.

Another way to gauge a company’s authenticity is by examining its commitment to sustainability beyond the bare minimum requirements, such as those outlined in the UN Global Compact. True authenticity involves investments of both time and resources to make meaningful change.

Employees should notice changes that range from better parental leave policies, increased diversity, and even more environmentally friendly company restaurants. Employees are the key to success and authenticity is built when companies involve everyone in the efforts rather than a top down approach. It’s about whether a company is genuinely striving for positive outcomes for future generations rather than just meeting compliance standards.

Are these issues being taken seriously at Boardroom level?

The challenge of integrating topics related to CSR, ESG and Corporate Ethics and Compliance into the boardroom discussions is a complex issue. As someone who has worked in various companies, it’s evident that several factors prevent the inclusion of these crucial topics in board-level decision-making.

There is a common perception that these areas are cost centres rather than profit generators. This perspective often stems from a failure to effectively communicate the business benefits of CSR and ESG initiatives. To gain traction in the boardroom, it’s essential for advocates of these causes to articulate how they contribute to the bottom line, foster goodwill, and enhance the company’s long-term sustainability.

Another significant barrier is the traditional focus of businesses on short-term gains. Many companies prioritise quarterly results and shareholder returns above all else. This short-sighted nature can impede efforts to incorporate CSR, ESG, and compliance considerations, which often have more long-term, holistic benefits. All of these topics must be baked into long term strategy as a baseline and with this the short-term results will be evident.

To bridge this gap, it’s essential to emphasise that profit and purpose are not mutually exclusive. Companies can maintain profitability while staying true to a clear, mission-driven purpose. Going back to Tony’s Chocolonely, they have appointed “mission guardians” to their boards who have the authority to veto decisions that deviate from the company’s core mission.

This demonstrates a commitment to purpose even when it may come at a cost, and it sends a powerful message about the company’s values and priorities. This was a very bold move by this board and one that I hope to see other companies do.

Companies that adopt a triple bottom line approach, considering profit, people, and planet, tend to thrive in today’s business landscape. By aligning these elements, they create a sustainable and purpose-driven model that appeals to consumers and investors alike.

A food delivery service that I worked with illustrates the difficult decisions companies may face. This company aimed to reduce plastic waste in the supply chain by using reusable glass and metal containers.

But when faced with investor pressure to return to plastic for cost and quality reasons, they deviated from their original purpose and ultimately went out of business. This example underscores the importance of staying committed to a well-defined mission, even in the face of financial pressures.

In addition to the concept of mission guardians, another structural change that can enhance the integration of CSR and compliance is consolidating various control functions under a Chief Assurance Officer. This approach eliminates silos, streamlines decision-making, and underscores the interconnectedness of corporate culture, ethics, risk management, and compliance. A Chief Ethics Officer, in particular, could play a pivotal role in shaping the company’s culture, aligning it with the mission, and fostering long-term thinking.

What steps should organisations take to promote ESG and drive purpose?

Efficiency and effectiveness in the realm of corporate control functions are paramount, and consolidating these functions under a single umbrella is indeed a key step toward achieving this goal.

Such consolidation not only streamlines processes but also enhances cost-effectiveness by bringing down redundancy and promoting cross-functional collaboration. This approach aligns with modern corporate governance trends that prioritise a holistic approach to compliance and sustainability.

In today’s rapidly evolving business and technological landscape, CEOs should indeed be concerned about the structure and functioning of their control functions within the company. Restructuring these functions to better address ESG concerns, foster long-term thinking, and instil a culture that extends beyond quarterly numbers is a strategic imperative.

Shifting the culture and increasing diversity at the board level to emphasise long-term thinking is crucial. This involves training executives to consider the consequences of their decisions beyond short-term gains. Effective communication of these long-term benefits is essential to drive this cultural shift.

Furthermore, you correctly emphasise the need for a holistic approach that extends beyond the legal aspect. While legal compliance is vital, ESG and CSR initiatives are multifaceted and require a diverse skill set, including auditors, data analysts, and professionals with a broader understanding of sustainability and governance. This approach reduces the need for siloed specialists and promotes a more integrated and comprehensive approach.

The power of data is invaluable in this mission. Through smart systems and AI cost-effectiveness of CSR programs is well within reach. Investing in systems that can automate routine tasks and data analysis not only improves efficiency but also ensures accurate and timely decision-making. Smart

use of data can significantly reduce the need for manual approvals and oversight, allowing resources to be allocated more strategically.