ESG: S for social inclusion with Therese Baptiste Cornelis

In less than 20 years, the ESG movement has grown from a corporate social responsibility initiative launched by the United Nations into a global phenomenon whose assets are set to balloon to $50 trillion by 2025 from about $35 trillion, according to estimates from Bloomberg Intelligence. Being the topic of numerous discussions and having impact on future enterprise value proves it to be crucial in operating business. 

However, ESG stands for environmental, social, and corporate governance, hence we want to leverage our focus on one of those aspects, namely social. Together with my guest, Therese Baptiste Cornelis, an Advisory Board Member at AKFI Actionable Knowledge Foundational Institute as well as a consultant for organizations in key issues of Digital Transformation, we will discuss the role of ESG in organisations, especially focusing on the social inclusion aspect.  

Michał Grela: Hello and welcome to yet another episode of IT Insights by Future Processing. Therese Baptiste Cornelis is my guest today. A very interesting persona. Uh, a former UN ambassador and currently a lecturer, consultant, keynote speaker, and life coach with varied experience in diversity and inclusion, digital transformation, leadership, change management, and global challenges. Therese, ugh, super happy to have you here with me. Thank you for joining us.

Therese Baptiste Cornelis: Oh, thank you for inviting me. It’s my pleasure.

Michał Grela: Can you give us some sort of understanding of what’s your background? Because I know it’s very vivid and bright. Can you explain a bit about who you are?

Therese Baptiste Cornelis: Yeah, see… let’s see if I can get this in a minute. Um, it’s very varied. My first… I started off in IT and then I moved into business and then I merged both. So I’ve worked in the private director[ship]. Then I entered into, um, politics as a Minister of Health of my country, and then I evolved into being my country’s United Nations Ambassador to Geneva with responsibility for WIPO, WTO, ILO, you name it—all the different aspects that we have in Geneva as well as what we have in Austria and in France. So it was pretty busy, and as well as in Italy, FAO.

And then after that, I be… I came to Belgium because I am married to a Belgian and we decided to settle in Belgium. And there I started back into the profession of teaching, ’cause I was doing teaching just be… simultaneously while I was in the private sector. And I went fully now back into teaching as well as consulting. And now I’ve finally settled at Art of Alda University of Applied Sciences where I lecture in global challenges, um, different courses: international strategy, intercultural communications. All that blends my love of sharing my knowledge with students and as well as looking at the different aspects like of digital transformation and of course I’m really focused on diversity and inclusion—the S in the ESG.

Michał Grela: Exactly. ‘Cause the… the ESG in general is being the topic of numerous discussions and it’s having impact—already having an actual impact on the future enterprise value—uh, which is proves it to be a crucial, uh, let’s say aspect in, let’s say, daily business operations. However, I know that you are known for putting the S in the ESG. So can you elaborate on that some more?

Therese Baptiste Cornelis: Yeah, because ESG has, as I said, become a dominating theme in the context of sustainable business conduct. Um, I think prior to the COVID-19 it was seen as a “nice to have,” and now it’s realized we need it. And why do we need the S is becoming increasingly critical. People and organizations are very conscious and therefore you find the consumers want to know what you’re doing: the communities, the businesses, the employees, the supply chain. And it’s very urgent that we make this change that we need to do.

And of course that social pillar is what we are focused on because, as I said, the COVID-19 made everyone realize people are what makes the organization thrive. And the social inclusion therefore is a must. And to achieve that, we say that organizations need to take that step beyond just checking boxes. Too many times organizations say, “Oh yes, we do have diversity and inclusion, um, modules or effects on different plans in our company,” but it’s really just assimilation. They try to get people to be like themselves.

And then some that say they do diversity and inclusion… to me, I’m alarmed. I was listening recently to, um, uh, let’s say a guest lecture by a university professor talking about diversity and inclusion at their university. And they were so proud that they had set up groups for LGBTQ, they had set up groups for people with disabilities, they had set up groups for people of color, they had set up groups for refugees. And I’m like, this is not what diversity and inclusion is about because you’re actually doing what we don’t want, which is seclusion—saying you belong in different groups.

You need to understand what these numbers mean for success and for sustainability. And that is where technology comes in because it can help you do that with engagement surveys, with inclusion-focused communication, collaboration techniques, impact measurement software. You need to assess the culture. Don’t just do it and say, “Yes, we have diversity.” You go to any company and on their list, “Oh yes, we recognize diversity and inclusion.” And some of them is like, okay, do you want to be that… the token person of color, you know? Are they really including you? Are you really asking people? Are you making your company such that people of different beliefs, different looks, different color skin can feel as one? And that is not really there. And luckily the ESG, the different mechanisms they have, can allow us to look at that aspect.

And what we realize very much, um, in our talk is that sustainability is the new reality for every one of us in the coming decade. Forward-thinking financial services firms that recognize the shift and foster what we say “digital equity” and inclusive finance through innovation to drive that sustainable growth will gain a competitive advantage and they will grow faster.

Michał Grela: It’s very interesting. I… I… I noticed that you are, let’s say, extending the… the S—which is, because S in the ESG stands for Social—but you… you keep extending it to social inclusion. Uh, why… why is that important?

Therese Baptiste Cornelis: Again I say because sustainability will become the top priority. And as allocators of capital and risk underwriters, the financial services have a large role to play in this transition to a more sustainable world that customers and regulators will be demanding. And therefore we see the COVID-19… again I bring it back. I call it the S. The S as the middle child. And we know that they always say the middle child is always ignored, right? And in the beginning, we all focused on the environment. We all focused on the governance, making sure they get to this net zero, which [is] not going to happen. But we… we come up with all these policies. We have all these meetings.

I mean, as a former UN ambassador, I kept saying that the UN does not have teeth. The UN sets policies, but they cannot enforce them. And as such, having been in, like I said, in the belly of the UN, I was a bit shocked at the lack of enforcement possible to the… to the UN. I mean now I see all over the news we have Zelenskyy and all of them saying that yeah, the UN is not focusing, it’s not functioning. And again, it’s… we cannot wait on the UN to do it. We cannot wait on the governments to do it. We ourselves have to do it and we… have the businesses have to do it.

The S, the social aspect, it’s a missed opportunity if you don’t focus on that aspect. Okay? It’s a way to improve people’s livelihood, reduce poverty, advance this economic development in the aftermath of the pandemic. I don’t know if you realize, Michał Grela, that the COVID-19 crisis reversed the trend. We were seeing social and economic development gains that had taken decades to achieve. And then we got the COVID-19 and that really separated the haves from the have-nots. Those who didn’t have have less and those who had got more. Because if you look at all the companies that have grown through that have been the technology companies, but they [are] owned by people who have… people who invested in those things.

That is why the social inclusion aspect is so, so crucial and it really… the pandemic widened inequalities between generations, between nations, between communities. We have WHO talking about, um, vaccine inequity. Women alongside the poor, the elderly, disabled, and migrant have been disproportionately affected. As a former Minister of Health, but I have been looking at it. I mean, people get on as if the COVID-19 is over. Okay? We wish it was over. It’s not over. It is not over. I mean, I saw recently in Philadelphia, they put back on the mask mandate. I’ve been wearing masks since February 26th, 2020. Right? I started before it was even a mandate.

And I’m saying that the rapid digitization brought by COVID-19 has decreased the overall number of unbanked consumers because people were forced to start banking because we stopped in Europe having, um, transfers of money ‘cuz they said whose money was contaminated. But the number of underserved has increased. Okay? They have not been able to get what they need. And this is coming across because an organization’s equality impact is often measured by their willingness to advocate for those without power. Publicly challenge social inequity and ensure their working practices and business do not perpetuate this injustice or exploitation. And that is why social inclusion is so important in the ESG.

Michał Grela: That’s very interesting explanation, but I’m… I’m still wondering, you know, because you… you mentioned that the pandemic actually accelerated the change in a positive way. Um, but I’m… I’m wondering whether there’s any way to… to measure it? How can we actually measure ESG? Can we actually measure or set up specific KPIs, especially in regards to social inclusion? How can we actually prove… have this right to believe that we are where we should be as an organization?

Therese Baptiste Cornelis: Now, I personally can’t measure it, but there are a lot of companies that are involved in this impact measurement and they are looking to see what is causing it. They are looking at the KPIs. Um, I was recently at a presentation where a fellow advisory board member… oh, you… I didn’t mention I’m also on the advisory board of AKFI, Actionable Knowledge, and one of our board members actually is very much… his company is very much involved in that aspect. Um, trying to remember… remember his name of that company because it doesn’t always come to me again. It’s Satskco… SUS TCO. That’s their company. And they empower market participants with a universal scoring and rating system to help determine the company’s sustainable performance and relative impact across environment, social governance, and financial categories.

And there was also another company that I came across ‘cuz when I looked at [it] such they were doing ESG in general but like you said very much into the social inclusion aspect. And that part they did admit that they haven’t fully gone into that with the diversity and inclusion. And in my research so far I came across a company called Small World Solutions. I contacted them to find out about it and they have something called the “New IQ,” which is the Inclusion Quotient. And that is the power of inclusive intelligence providing participants with a road map on how to create inclusive teams. And they actually go into your companies, they put… they look at what different systems you have and… and use metrics. They give you real hard data to show that this is working because again, all these things cost money and shareholders again are interested in the bottom line, the profitability. So they show: is this functioning? Are people coming to meetings? What is the change? Is there a change in behavioral patterns? So they are measuring what happens before you start your training and your different systems and after.

That’s for the… the diversity and inclusion side. But when you’re talking about the environmental metrics, looking at it, and we also see government putting in policies. And that is something I say we have to be very careful of: putting in too much policies that don’t work worldwide. Because for instance some people were asking about, um, I remember during the SustCo presentation someone was asking, “Why is race not put into there as one of the measurements, having people of different races?” And I myself, being of a woman of color, people asked me, “Why don’t you push this race when you talk about diversity?” And I keep saying diversity is not only about race. And if you put race into one of the measurements, it can work against you in some areas. Because in some places, like for instance let’s say in Poland, if you say, “Oh, you must have X percentage of people of a different color,” you’re actually setting up the company for failure where the majority of the people are of one color in that country.

So again, I understand USA, UK, perhaps Canada have these issues. But even myself, I grew up in the Caribbean and people talk about, you know, I never felt I couldn’t be what I wanted to be because in my life I saw women of color, men of color, people of color. They were all around me. That was what we were about. Okay? So, I do think when we try to put race too much into diversity, that’s where diversity gets messed up. Bringing too much of the race talk into it. Okay? It’s not about that. It’s more than just color. It’s about gender. It’s about disabilities. It’s about religion. There are different aspects. It’s about social status. That is much more important than always putting race in all. It [is] not going to work because again the same way… If you go to a country, let’s say in Africa where the majority are people of black color as you say, what are you going to say there then? They must have X percentage of white people in their company? So I’m glad that that… that factor is not part of the measurement of the S. It’s not. And people are asking for it to be. I understand with the Black Lives Matter it became important. But we got to be careful that we don’t exclude companies by putting in factors that are not fair to every single company around the world.

Michał Grela: Um, this is all very interesting and relevant, but I’m still wondering how to maintain this relevancy in the business context, um, the technology context. And what impacts does ESG have on technology itself? Because there’s definitely a lot of talk that how… how positive is the, uh, is the impact, but can you elaborate on that?

Therese Baptiste Cornelis: Well the thing is if you look at technology itself with the ESG, we’re talking about the ethical supply chains. And the ethical supply chains we say also are [a] critical factor as the capital markets and the younger consumers harbor an active interest in how a company is acquiring profit. They’re interested to know if it’s off the backs of racialized, marginalized, or vulnerable populations. And therefore, these measurements are put into place and if that is going on, it needs to stop. We’re not expecting it to stop right away. We know that is not possible. But there are issues where it can be better managed.

Long ago, people used to look at stock price, profitability, revenue, and they judge that quarterly. And but no longer are we looking for pure profit. They want to see the type of profit you make. How is the profit you make benefiting your community? What are you doing? And that is where technology can help. That’s where the digital transformation, the DX that we talk about… okay. So that is one of the aspects I really like and the ESG can help connect those dots and highlight the pivotal role, the interconnections between us and our environment. What is our impact in what we do on our daily business? How do we impact on the environment? What impact do we have on… on each other? What is the impact we have on the world around us?

I mean, we have seen with, um, the like I said the digital transformation, it’s not that easy. You can’t say, “Okay, we do… everybody works from home.” We saw that couldn’t work because some people were in areas where they didn’t have Wi-Fi. They couldn’t work from home. That remote working was not possible. And that is something that we need to take a glance at. We need to look at unreliable internet access, the lack of affordable tools or digital skills, those things that create that digital divide. And that is where technology is very important.

And I mentioned last week about the digital inclusion. The only way we can see digital transformation working with ESG is if we make sure no one is left behind. So significant challenges do remain. We need a better understanding of the opportunities and risk. I am not an expert on that aspect, okay, posed by digital innovations when it pro[vides]… comes to providing access to financial services to all sorts of services. We talk about AI. Recently I had to talk to students about AI linked with SDGs or everything. Technology is impacted on every aspect of our lives. But there are many barriers and challenges of personal circumstance which result in people feeling excluded from what is going on. And unless everyone is included, then we can say no one is.

Michał Grela: Hmh, that’s a… that’s very relevant. Thank you. My last question but not least is, uh, uh, related to the fact that social inclusion is of course the… the vital part of the ESG approach as you mentioned on multiple occasions, but it requires strategy to be implemented. It’s not something you can enforce upon on a government level. It’s not something that can be, let’s say, only brought up down-up. Uh, it has to be something that is, let’s say, governed or approached with a strategy in mind. So how do we make sure that ESG is not something that only looks nice on paper, uh, but only translates… but not only on paper but it translates into actions, tangible actions within organization?

Therese Baptiste Cornelis: Um, well yeah again it has… it comes from the government but the government has a lot… and the problem with government… government and I can say this is lobbyists. Okay? And that is an aspect many men in the street don’t recognize: the total impact of lobbyists have. Because many lobbyists lobby solely for the benefit of what they have in mind. So we do talk about ESG and now with the war going on… I mean first of all ESG was talking about “don’t… don’t invest in weapons of war, don’t invest in defense industries.” And now everyone’s gone back into the defense industries. So the whole aspect the government has to decide what is good for the environment.

But like I said, man, if you keep relying on government you’re not going to go anywhere. Why do you think we keep having all these climate conferences? I mean I’m not hearing anything new now that I didn’t hear back when I was there in 2011, 2012. This is 10 years ago. It’s not changing. And that is where the governance has to come from us. So the industries, the different groups, the chambers of commerce, they are important. They’re important to set the strategy. They’re important to set up advisory committees.

Now, um, I know that for instance, um, I have associates at Future Processing and they’re looking at that aspect as well. So you have different ways. We have platforms that have been developed. Connects platform has a platform where people come together. We have a ESG community there where we can help each other. As I mentioned before, AKFI, we do advisory for strategies. We don’t expect every company to have a strategist linked with ESG. It makes no sense. There are people who specialize in this. They come in, they help you.

I always say, you know what you’re doing, but you need someone to guide you. When I was growing up and I was a consultant, I remember someone telling me, “Just remember, a consultant goes in, takes their watch, and tells them the time,” because many times the information is right there in front of them and they don’t know what to do. And that is where the role of getting people who you know what you’re good at… and I always say, um, it’s something the young people use: “stay in your lane,” right? There are aspects that some people are really good at. Stay in your lane and know what you’re good at and don’t try to be the master of everything.

So that’s why you find I am not going to be talking to people about environment all the time. Yes I was on advisory panel of UNSS and I saw what the problem came and we tried to make it too big to grow… it was… It was so much things you had to do to fulfill the sustainability standards. Many small companies could not cope. They fell through because only the big companies… you had to do this, you had to take that, you had to do that. It has to be done on different levels: what works for startups? What works for companies with X employees? What works for companies with great corporations? Different aspects.

And that is a slight problem I see with many of the laws coming out from the EU. It’s too all-encompass[ing]. It’s not looking at the entrepreneur now part of… not able to capture all those different factors. And that is why we need a collaboration. We need to include the communities. We need to include the chamber of commerces across. And not just in EU—ESG is not about EU only. And I think too many times when we come up with solutions… solutions to what’s going on in the world, we see it with, I say, with blinders on as if we’re horses in a race. Because I find I see people talking about like just now I was watching a show on, um, on TV ‘cuz I like… my students say I live on the television… and they were talking about in Brazil, right, for ESG. They… they upset that they’re cutting down, um, trees and this particular town is just cutting down trees.

What about the… the company? And I’m like, listen people, I’m sure Mike… where you are there were trees and your country cut down those trees to build up your community. So there are ways to do it with the ESG. I’m saying the small companies need help. I’ve already suggested to people: listen, if you don’t want people in reserve to cut down trees, then you take a particular forest that they need for their survival, you lease it, you take charge of it, and whatever income they would have gotten from cutting down the trees, you give to them so that you keep the trees safe, but they still need to survive.

And these are the kind of things that governments need to look at. We want people to do the ESG. We want to save the world. We want this world to survive to 2050, but people need to live till then as well. So we are talking about people need ways to find income and that is where when it comes to setting up all these metrics and doing all these establishments, as SustCo says, you need to look at who you’re working in. So these impact measurements need to look at size of company, location of company, the environment, the GDP of that, and there’s a lot of factors going in but there are a lot of researchers working on it.

Michał Grela: I really like the bit saying when you said that there are experts that you can leverage and that younger and smaller organizations are, let’s say, less privileged in introducing… I think is Jan [unclear]… the large players who have, let’s say, the… the tool set there to… to to actually do something tangible. That was really relevant. Thank you for sharing that and thank you for being the part of IT Insights. It was very interesting. It was super… I’m super happy to have you.

Therese Baptiste Cornelis: Thank you for inviting me.

Michał Grela: Thank you. Take… take care. Bye.

Therese Baptiste Cornelis: Thank you. Bye-bye.