The primacy of trust at the centre of APEC 2021 LIVE with Business event
22 October 2021
The rate at which the world is changing shows no signs of slowing – and it’s up to businesses to keep pace, according to leaders at the latest APEC 2021 LIVE with Business event: The Business of Trust.
Hosted by CEO Summit Premier Partner, PwC, the 21 October live, virtual session brought together policymakers and business leaders from New Zealand and across the APEC region to discuss how businesses globally are adapting to change and shifting their focus to earning and maintaining trust with a broad range of stakeholders.
Outlining the situation, PwC CEO and Senior Partner (New Zealand), Mark Averill highlighted some of the “new realities” business face today, including the global pandemic, digital disruption and an increased focus on environmental and governance-related issues.
“We’ve seen the world change at a scale and pace unlike anything we’ve seen before,” says Mr Averill. “Businesses also need to change. It means responding to the rising expectations and playing a greater role in solving some of society’s most important issues.”
Trust has become an essential factor in the way businesses operate and deliver their strategic ambitions, explained Mr Averill, pointing to common threads including openness, transparency, accountability, and an increased focus on relationships – the ultimate currency for businesses, and the basis of their social license to operate.
The change, says PwC Chair and Senior Partner (United States) Tim Ryan “is not random,” describing an “adapt framework” taking place around the globe, driven by asymmetries in wealth, access to education, healthcare and clean energy. This disruption, compounded by the pandemic, shifting demographics and polarisation, has put an increasing pressure on trust.
Today, says Mr Ryan, “the number of topics required for business to consider and be trustworthy on is increasing, and the stakes are getting higher,” pointing to customer data protection, environmental action and issues of diversity, equity and inclusion as examples.
“We are seeing an increased focus on broader stakeholder engagement, and a shift in thinking around people versus profit … Companies are coming to the realisation that by better engaging stakeholders and gaining more trust, they can also drive more profit,” says Mr Ryan.
The private sector cannot meet these challenges alone, says New Zealand Minister of Climate Change, Hon James Shaw, citing new legislation, which would make climate-related disclosures mandatory for some organisations in New Zealand.
“I have just come back to my office from the [New Zealand Parliament] debating chamber where we have just had the third reading of the bill on climate-related financial disclosures.”
The bill, which would introduce a mandatory reporting regime, received sweeping support from the business community during consultation, says Minister Shaw, with 86% of respondents coming out in favour. That, he says, is because there is heightened awareness of the material risk of climate change, and businesses understand how this risk can negatively affect the total value chain if it remains unvalued and unknown.
“Government can facilitate the private sector to take more action than it may otherwise be able to, and to have higher-quality, trusted relationships with each other, with investment communities, other stakeholders and customers,” says Minister Shaw.
Michele Embling (New Zealand) is Chair of the External Reporting Board (XRB), the independent Crown entity which would issue the reporting standard(s) for the bill once enacted. Ms Embling cautioned that for businesses, the time to act is now.
“Society’s expectations are increasing, reflected in the information needs and choices of investors, suppliers, customers, employees and really importantly, the providers of finance. We will increasingly, see financiers asking for this type of information.
“Don’t wait until the final standard to ask the question, and to challenge the resilience of your business strategy,” says Ms Embling.
Chief Sustainability Officer of City Developments Limited (Singapore) Esther An also pointed to the opportunity of environmental, societal and governance (ESG) and sustainable finance.
“In 2020 ESG funds tripled, sustainable finance and bonds doubled, and it is still growing very fast,” says Ms An.
“To tap into the fast-growing ESG funds and sustainable finance, businesses need to be able to dish out very good ESG report cards. Your ESG data needs to be credible and externally assured in order to give trust to potential financiers.”
APEC 2021 - LIVE with Business
APEC 2021 – LIVE with Business: The Business of Trust was the fourth in a series of events bringing together prominent business figures and thought leaders to set the scene for APEC CEO Summit 2021, 11-12 November.
Held annually, the CEO Summit is one of the Asia-Pacific’s premier business forums. It attracts a wide range of influential CEOs from some of the largest companies in the world. The 2021 CEO Summit will be a virtual event linking government, business and thought leaders from across the APEC region with attendees from around the world. The event will be filmed and broadcast as live from Aotea Centre in Auckland, New Zealand.
To register as a delegate for the APEC CEO Summit click here.
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