Thriving in the New Normal:
Leading through Geopolitical Volatility and Compressed Transformation
June 7, 2022
By Bloomberg Live
Thriving in the New Normal: Leading through Geopolitical Volatility and Compressed Transformation rounded up a string of expert panels to discuss the state of the world in an increasingly unpredictable business environment.
Serving as a follow-up to this May’s World Economic Forum in Davos, the event saw experts discuss risk, finance, and sustainability and assess how these factors can help industries thrive in the new normal.
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- Pierre Breber, CFO, Chevron
- Paul Lundstrom, CFO, Flex
- Anja Manuel, Co-founder & Partner, Rice, Hadley, Gates & Manuel LLC
- Daniel Klier, CEO, ESG Book
- Zoe Knight, MD of Sustainable Finance Centre, HSBC
- Brad Sparks, Executive Director, The Prince’s Accounting for Sustainability Project (A4S)
- Cynthia Chu, CFO & Growth Officer, Audible
- KC McClure, CFO, Accenture
- Carol Massar, Anchor, Bloomberg Television and Radio
- Meg Szabo, Senior Editor, Bloomberg Green & Sustainability Events
- Tom Metcalf, Finance Journalist, Bloomberg
Volatility & Resilience: The Call for Greater Agility
The three-person panel commenced with Anja Manuel, Co-founder & Partner at Rice, Hadley, Gates & Manuel LLC, discussing the world’s “stormy geopolitical environment.”
“Russia,” Manuel said, “where Vladimir Putin is trying to reunify the Russian Empire – this is not about NATO expansion, it’s about more than that for him, it’s personal.”
Manuel praised the bravery of the Ukrainian people and the West’s unity against Putin, but added that “a quagmire” seems like the most likely outcome, adding pressure to markets worldwide. She also touched on the “extreme political crackdown” happening in China.
Paul Lundstrom, CFO at Flex, was asked to chime in on Manuel’s remarks based on his company’s decades-long presence in China. Lundstrom noted that the past few years were “certainly dynamic” in the wake of the pandemic.
Pierre Breber, CFO at Chevron, was asked about the market volatility and increasing energy demands. “Energy markets are in an up-cycle, the demand is strong,” he replied, describing the situation as the “reverse” of what happened two years ago.
“Clearly the Russian-Ukrainian conflict has strained the already-tightened markets,” the CFO added, “but the commodity cycle was already well underway before the Russia-Ukraine crisis.” Breber also pointed out that markets are expected to rebalance over time.
Pierre also commented on how his company managed to thrive during the crisis, stressing the importance of being prepared for any situation the market and the world might cause.
Manuel stressed the importance of being agile and resilient, adding that while Russia’s actions took most US CEOs by surprise, the company leaders have learned a new lesson on the importance of diversification.
Breber pointed out that as the world population is growing and energy needs are on the rise, so is the need for greener energy sources. He noted that some of the biggest companies in the US are very interested in switching over to lower-carbon solutions, albeit the process will take decades.
Looking at the big picture, Manuel stressed that global affairs have changed in recent years, saying that the “pendulum is swinging back – somewhat, not entirely – from globalization.”
“It’s impossible now to say one thing in China and the other in the United Sites,” she added, stressing that CEOs in the US are now under much more pressure about not adhering to environmental and human-rights guidelines while doing business with China.
The Green Bottom Line: Measuring Sustainability to drive Impact and Value
The conversation commenced with Brad Sparks, Executive Director, The Prince’s Accounting for Sustainability Project (A4S), and Zoe Knight, MD of Sustainable Finance Centre at HSBC, agreeing on the unity within the ESG domain, stressing the willingness to advance and reach new goals.
Daniel Klier, the CEO at ESG Book, chimed in by saying that one of the industry’s “big jobs” is to “uncover the drivers of sustainability” and “actually go down to the substance” to reach higher levels of trust and transparency.
“The more data we have, the better. What is missing at the moment is to make these initiatives substantive,” the CEO pointed out.
Knight echoed Klier’s sentiment, stressing the need for “radical transparency” to achieve progress.
Asked about the key areas CFOs should focus on when it comes to companies’ sustainability strategies, Sparks first pointed out that every CFO should recognize the financial responsibility and opportunity of investing in sustainability strategies.
Secondly, CFOs need to recognize that sustainability connects across the finance organizations, the Executive Director added.
The discussion concluded with each panel member explaining what excites them about the current trends in this field.
Science is telling us loud and clear that more investment is needed in the field of renewable power, Knight pointed out, making areas like transmission mechanisms, infrastructure, and power decarbonization a “massive investment opportunity.”
Klier replied that a “very challenging” period lies ahead. “Frankly, this year, ESG products will underperform,” the CEO added, stressing the importance of maintaining course during 2022.
Sparks said that while we are undoubtedly undergoing a challenging time, he is excited about the level of interest in finance and accounting firms are showing in sustainability, which he described is at “unprecedented levels.”
Need for Speed: Technology as Enabler of Compressed Transformation
The conversation about the transformation of tech and utilization of technology in the field of sustainability started with KC McClure, the CFO at Accenture, discussing the transformation of tech in the past two and a half years of “unprecedented disruptive environment.”
“The exponential pace of technology innovation is here to stay; it’s going to continue,” McClure pointed out, sharing excitement about the impending “unprecedented” period of change and “positive momentum.”
As the technology spending percentage is expected to rise from 5% to 7% of GDP, IT spending is essential, the CFO pointed out.
“It really pays off in times of disruption and uncertainty to invest in technology,” she pointed out, saying that data shows that such an approach has proven to yield business dividends.
Cynthia Chu, the CFO & Growth Officer at Audible, agreed with McClure. She discussed her company’s approach to business during the pandemic, explaining how they adapted and transformed to handle the situation and their users’ new needs.
McClure continued by talking about “industry X,” which encompasses engineering and manufacturing. “That’s an entire new space that will have profound changes in the years to come.
“You have to be comfortable with being uncomfortable,” McClure pointed out about the current state of the world, stressing the importance of making everyone comfortable with the amount of change.
Chu rounded up the conversation by stressing that while creators on the Audible platform are essential, caring for employees is just as crucial for the company’s healthy operation.
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