Ep. 121: Ramesh Shettigar - ESG from a Finance Perspective

Contact Ramesh:
https://www.linkedin.com/in/ramesh-shettigar-9ba1243/


FULL EPISODE TRANSCRIPTAdam: (00:00)
 Hey everyone and welcome to Episode 121 of Count Me In,
IMA's podcast about all things affecting the accounting and
finance world. I'm your host Adam Larson, and I'm pleased to
introduce you to today's featured guest, Ramesh Shettigar. Ramesh
is Vice President of Investor Relations and Corporate Treasurer
at Glatfelter, a leading global supplier of engineered materials.
He joined my co-host Mitch to talk about ESG and its importance
across the organization. Keep listening to hear about the finance
team's role in ESG, prioritizing ESG over return objectives, and
strategies to make ESG truly sustainable.

Mitch: (00:47)
So in your perspective, how have recent events increased the
importance of ESG in business? And obviously for our listeners,
we would like to get your perspective, particularly for the
finance function.

Ramesh: (01:00)
Sure Mitch, I'm assuming by recent events you're referring to the
pandemic, climate issues, social injustice, and corporate
governance matters we've seen play out in 2020. If so I think
companies play a very important role in representing to employees
and their communities where they stand on these topics. The
pandemic for example, has highlighted the importance of ensuring
the health and safety of our employees and the communities where
we operate. With regard to climate, corporations I think need to
be responsible stewards of the environment in the geographies
where they operate and need to abide by all local and federal
environmental standards so that we can all preserve humanity's
long-term health and sustainability for generations to come.
We're seeing this play out in broader mega trends. For example,
this move from fossil fuels and toward alternative energy sources
or the plastics free movement. Working for an engineered
materials company like Glatfelter, I feel incredibly proud that
we have focused heavily on natural and bio-based feedstocks in
our manufacturing process and our product innovation efforts are
heavily focused on minimizing synthetic materials in the products
we make. As it relates to social topics, employees need to know
where their employers stand regarding racial, gender, and
socioeconomic disparities in the workplace and if their companies
are playing an active role in facilitating an environment that
welcomes diversity, equity, and inclusion. Glatfelter for
example, has made it very clear through an internal message from
our CEO that treating people of all backgrounds fairly and
consistent with our core values of mutual respect, integrity, and
social responsibility is of utmost importance. We have committed
to enhancing compliance training that focuses on diversity and
eliminating unconscious biases. Also a meaningful portion of
corporate giving will go towards causes that address social
inequities and racial injustice. From a governance standpoint, I
think ensuring that there is adequate board diversity in terms of
experience, gender, and race is very important for investors
seeking reassurance that company leadership exemplifies and
values diversity. So bringing all this back to the finance
question, which I think you're trying to get to, I think the
long-term returns of these initiatives and the stand we take
regarding ESG will ultimately be positive and rewarding for the
company, its employees, and society. So I think that's how we
think about what ESG does for us, particularly for the finance
function.

Mitch: (03:56)
That really was beautifully said and thank you for taking us
through step-by-step, I think it was a perfect response. Its
great to hear those kinds of initiatives put in place and you
know, your organization really taking a big step forward in
making sure that everybody within the organization is on the same
page. I think that clear communication is vital for making sure
these ESG initiatives are effective, really is what it comes down
to. And you talked about the finance function, the long-term
returns. I think it's been a year now with this pandemic that you
brought up and obviously there is a little bit of a light at the
end of the tunnel. I think some people are starting to see it as
businesses seek to return to their normal and that obviously has
a different definition than it did a year from today. But how do
you prioritize ESG in relation to these return objectives that
you mentioned within finance?

Ramesh: (04:53)
Sure. So you know, the pandemic has clearly appended
organizational priorities when it comes to ESG and I think you
said it well, right? We've we see the light at the end of the
tunnel. We've been through this pandemic now for a year,
organizations have flexed and adapted to the marketplace and what
the pandemic has brought about. But if anything, the pandemic I
think has elevated the social aspect of ESG, which was already
gaining momentum, keeping employees safe, facilities operational,
and servicing customers are high on the priority list I think for
companies and in a way represent the duty of care that businesses
broadly commit to as part of their ESG focus. Therefore, I think
ESG should not be seen purely from a return objective, because
ESG initiatives are simply the right thing to do. Yes, companies
of different sizes and complexity operate in different places
along the ESG continuum depending on their resource allocation to
this important endeavor. And as you know, the ESG evolution is a
journey and some are further along than others, but that progress
should not be driven solely by ratings outcomes or objectives. It
should be guided by a company's core values and commitment to
social responsibility. Businesses seek input from various
constituents like investors, employees, customers, and suppliers
to better understand expectations and what it means to be
responsible stewards in the community and that feedback guides
their actions and priorities.

Mitch: (06:36)
What exactly is your method for communicating these ESG
objectives with stakeholders and ultimately how do you make sure
they understand your efforts and get the buy-in from them?

Ramesh: (06:50)
Sure. So our primary method of communicating our ESG objectives
with stakeholders is through our sustainability report. You know,
in late 2019 we formed a cross-functional ESG steering committee
within Glatfelter with a primary role of overseeing the
sustainability and ESG strategy for the company and providing
implementation support to Glatfelter’s businesses and facilities.
We worked with a third-party consultant to conduct a materiality
assessment to identify our ESG priorities. Particularly since we
went through a meaningful strategic transformation as a company
over the last couple of years and we wanted to make sure our
latest priorities aligned with the new Glatfelter. Our
materiality process included peer and industry research, internal
stakeholder interviews, ESG team workshops, and application of
best practices. We also took into consideration the expectations
and recommendations of leading ESG ratings organizations and
sustainability standards such as the SASB (Sustainability
Accounting Standards Board), the GRI (The Global Reporting
Initiative), and UNSDGs (The United Nations Sustainable
Development Goals). We evaluated topics based on their potential
impact on Glatfelter, the company's ability to impact them, and
our stakeholder’s interest in these topics. And we finally
settled on seven priorities which are organized along the ESG
pillars. Those seven areas are environmental management,
innovation and environmentally responsible products, occupational
health and safety, product safety and quality, community and
employee engagement, corporate governance, and ethics...