Sustainable business and sustainable financial markets go hand in hand. Both have long been a theme of global politics, from the G20 to various UN bodies to the EU. The basic idea is that companies develop business models that conserve energy and resources, protect the environment, preserve biodiversity, create technologies to help us adapt to climate change, and respect human rights.

This calls for a universal transition, as set out in the United Nations’ global Sustainable Development Goals (SDGs). If they are to reach these goals, consumers must be enabled to discover sustainable options and business models. Society, but also companies, are increasingly calling on policymakers to set standards as well as a regulatory framework for a sustainable economy.
Especially in the private sector, delivery of the SDGs is still in its infancy, yet relies on industry solutions. As such, SDG 17, “Partnerships for the goals”, is of particular relevance. The RNE brings together NGOs, academics, policymakers and companies – also in regional clusters – to discuss and develop joint solutions. It also promotes networking on the topic with the Germany-wide RENN network (Regional Hubs for Sustainability Strategies).

Paris Agreement

In April 2016, 175 countries, including the United States, China and Germany, signed the Paris Climate Accords, usually referred to as the Paris Agreement, to replace the Kyoto Protocol. With the United Nations Framework Convention on Climate Change (UNFCCC), the member states agreed under international law to limit global warming to well below 2°C above pre-industrial levels, and preferably less than 1.5°C. Reaching this target, according to the Paris Agreement, requires an 80–95% reduction in global CO2 emissions by 2050. To report on how they are meeting their climate mitigation responsibilities, companies use criteria 11–13 of the Sustainability Code to describe, for instance, their goals and the measures they employ for reducing greenhouse gas emissions.

The RNE’s mission is to promote the idea of sustainability in the business world. Companies impact sustainability according to the depth of their supply and production chains, and as such have a major role to play here. Globalisation, for example, presents particular challenges, having led to a worldwide network of supply relationships between companies. As such, the RNE has been working on the concept of Corporate Social Responsibility (CSR) since 2006, defining it within the context of Germany’s SME-dominated economy as “entrepreneurial responsibility for sustainable development”, which applies regardless of the levels of hierarchy or legal structure.

Companies that produce, act and trade with sustainability in mind rely on the trust of their business partners and customers. The RNE considers first and foremost the disclosure of conflicting goals and obstacles to be a sign of credibility – and less so the overly confident reporting of perfection. We are therefore committed to supporting transparent and comparable reporting by organisations. 

The aim here is not reporting for its own sake, but rather to encourage a kind of competition around sustainable business and support the corresponding management practice and transparency. Performance should be rewarded primarily through the market. Which is why the Sustainability Code is especially important for financial analysts and investors: it facilitates the inclusion of information on environmental, social and governance (ESG) factors in corporate analyses and provides a suitable basis for valuation within portfolio management, corporate bonds, lending and the provision of investor information.

The original German Sustainability Code is part of a national and international sustainability policy, the English version of which can also be used outside Germany itself. We, the RNE, are happy to share our experiences of implementing the Sustainability Code. In fact, we regard it as a form of shareware, which lends itself to further national adaptations in other countries.