January 29, 2024 roundtable meeting

Summary

At the Arison Center for ESG at Reichman University, we place great importance on embedding sustainability into the culture and DNA of the business sector, putting these principles into action, and harnessing the leadership and employees of various corporations to effectively apply the principles of ESG to create value for the economy, society, and the environment.

The first roundtable meeting of the Arison Center for ESG was held on January 29 at Reichman University, led by Mr. Yair Avidan, former Supervisor of Banks and Chairman of the center’s Advisory Committee and Fellows Forum. Attended by CEOs and executives from a broad range of sectors, the meeting explored key issues including the importance of business leadership with an emphasis on value-driven leadership; the perception of environmental responsibility among Israeli businesses; the relationship between the academy and industry with regards to these issues; the need to deal with pockets of resistance and provide practical recommendations to decision makers; the correlation between social and environmental value and economic value; and the role of the regulator.

The participants concurred that implementing ESG in the business world presents a considerable challenge. It demands dedicated attention, resources, measurement tools, and training for both managers and employees. Additionally, fostering an understanding of ESG’s importance among the younger generation of employees is crucial.

The meeting's discussion contributed to an initial assessment of the business landscape in Israel regarding the implementation of ESG principles. It also helped identify opportunities and challenges for the center, providing direction for its future initiatives.

Key insights that emerged from the meeting, as summarized by Yair Avidan:

1. Avoiding discrepancies in the overall implementation of ESG standards between Israel and developed countries, particularly those with which we maintain trade relations.

2. Emphasizing the importance of ESG’s contribution to corporate value — companies will not act unless there is an economic benefit.

3. Addressing the challenge of balancing regulatory obligations with incorporating ESG into a corporation’s culture and DNA.

4. Emphasizing the need to engage management and employees, including integrating ESG into the company’s strategy and compensation objectives.

5. Emphasizing the importance of addressing ESG factors throughout the corporation’s supply chain.

6. Highlighting the critical role of “Tone at the Top” in realizing value-driven leadership — a comprehensive leadership approach relevant to the state, business, political and social levels — focused on maximizing long-term shareholder profit.

7. Broad consensus that the world is moving toward strengthening and expanding the social impact of corporations, with this shift becoming increasingly evident among the younger generation, who represent the future workforce.

8. Importance of defining clear rules for corporations that promote value creation, ensuring the organization maximizes its economic value.

9. Even when the “cannons are roaring,” — amidst crises — ESG implementation is important.

10. Addressing challenges in measurement; the practicality test.

11. The critical role of public pressure in influencing companies to align with necessary processes.

12. Significant importance of legislation, regulation, and enforcement with regards to these issues.

13. The challenge and necessity of educating the relevant market on these matters.

14. The need to address and overcome pockets of resistance.