Follow The Leader: Laudy Lahdo, Interim CEO And Senior Advisor, Companies Creating Change (C3)
With an increased focus on sustainability in the region, Lahdo is on a mission to help companies and business leaders seamlessly incorporate ESG agendas into their overall frameworks, adding that it is "no longer a 'nice-to-have' but a 'must-have.'"
The discourse surrounding the need for global corporate organizations and business leaders to better adhere to sustainable development goals and social justice causes has been ongoing for well over a decade now. From the pressing issues of climate change and carbon emissions, to the discussions surrounding gender parity in the workplace, there have been constant conversations on why companies need to take more responsibility for the impact of their operations. Over the years, some brands have yielded to the pressure; others have remained deafeningly silent.
But in recent times, what may have been perceived as mere token activism in the past has been receiving growing interest from investors and other stakeholders in the ecosystem. This has partly been due to the United Nations 2030 Agenda for Sustainable Development- a framework of 17 Sustainable Development Goals (SDGs) which was adopted by all UN Member States in 2015. The other major catalyst has been, of course, the ongoing global COVID-19 crisis. "It is no longer a "nice-to-have' but a "must-have.'" That's how Laudy Lahdo, Senior Advisor and interim CEO at UAE-based social enterprise Companies Creating Change (C3), encapsulates the urgency of the need for change in our current circumstances.
During my conversation with Lahdo, there is one abbreviation she brings up repeatedly: ESG. It is a term that is all the rage in the corporate world at the moment, and one that forms the crux of Lahdo's work at C3. ESG stands for "environmental, social, and governance," and it essentially provides a framework for businesses, and its leaders, to ensure that the non-financial impacts of their operations do not have adverse effects on society and the environment as a whole.
And in her role at C3, Lahdo works with CEOs and business leaders across various organizations and family offices in the Middle East to seamlessly incorporate ESGs into the core of their business frameworks. "Essentially, I help companies with their development strategies, and guide them on how to grow and scale and enter new markets, particularly in the Middle East," she explains. "Additionally, I also help them execute their business plans to deliver profitability, but with ESGs as their core focus and center."
Laudy Lahdo, Interim CEO And Senior Advisor, C3. Image courtesy: C3
Now, for Lahdo, who was the former Managing Director at ServCorp Middle East, what she is currently doing isn't exactly new territory for her. During her time at the Australia-headquartered multinational selling virtual offices, office and coworking spaces, to both small and large businesses, she helped grow and scale the enterprise from a single location at Dubai's Emirates Towers to 14 profitable locations spread across the Middle East and Turkey. For Lahdo, this experience has come in handy as she goes about identifying the best ways to incorporate ESG frameworks into business strategies. "In just that role alone, I had dedicated almost two decades of being a facilitator of corporate and enterprise-level businesses, and really delved into understanding what the real issues that impact corporate companies and entrepreneurs in their business growth journey are," she explains.
Before delving further into Lahdo's expertise, it is also important to gauge an idea of the company she works for. With a vision to help social entrepreneurs and enterprises grow their businesses in the MENA region, Dubai-headquartered C3 offers customized flagship programs as well as accelerator and incubator programs. One such program is the C3 Social Impact Accelerator Program, powered by HSBC, currently in its third edition, which has already helped over 600 early-stage to advanced startups in over 11 countries. "We help companies to unlock the financial benefits of having a social mission," explains Lahdo. "Our value proposition at C3 is to really help organizations define their ESG strategy and their theory of change, whilst maximizing their impact on society and helping them embed environmental, social, and governance missions into the core of their business model. So, what we do is develop these tailored flagship programs for advanced and early-stage companies as well as aspiring entrepreneurs, and we help to accelerate their growth and their impact through the help of a network of experienced professionals, experts, and impact investors."
The mention of impact investors is particularly noteworthy here. In the wake of the COVID-19 crisis, there has been a rapid acceleration of impact investing in the Middle East. To those unaware, impact investing refers to an investment strategy that aims to generate beneficial social or environmental effects in addition to financial profitability. This blends in very nicely with what ESG essentially stands for, but Lahdo believes that while the COVID-19 crisis has accelerated the awareness surrounding ESG in the region, there remains a lot of confusion over how to incorporate it into the core of a business framework. "I think with ESG, it's very new to a lot of business leaders and organizations, and everyone's sort of grappling with how to use it as part of their core strategy, and not just have it as an add-on department," explains Lahdo. "While many organizations want to do the right thing in terms of ESG, they don't actually have the right answers."
This is where Lahdo brings in her wealth of knowledge and expertise to adhere to what she calls a "triple bottom line"- people, performance, and profits. Through a focus on all three, Lahdo believes business leaders can be better equipped to cater to the ESG agenda, while ensuring it isn't done as a mere token move. "When it comes to the "E' in ESG, it's about identifying how to minimize the firm's impact on nature," she further elaborates. "Whether it's through its products or services, supply chain distribution, or operations- issues such as waste landfill and carbon emissions need to be minimized. When we talk about the "S,' it is about the contribution of a company to the fairness in society- this includes labor rights, an inclusive and diverse supply base, and a workforce that is focused on inclusion and diversity across all employee designations." Lahdo also notes that inclusion and diversity ranges from ethnic diversity, gender diversity, and pay equality, to human capital development in terms of skills training and employee wellbeing programs.
A screenshot from this year's C3 Social Impact Accelerator Program – Powered by HSBC. Image courtesy: C3
The final aspect of ESG alludes to the issues of government. Lahdo says she has been actively working with the UAE government to look into not only how ESGs can be better used in the ecosystem, but also to identify how it can be aligned with national priorities such as job creation. "I have also had many dialogues on not only supporting government task forces, but also on the importance of accreditation for entrepreneurs to prove their impact on society with their contribution to the UN SDGs," says Lahdo.
The point Lahdo raises about accreditation is rather significant. While all the discourse surrounding faster adoption of ESG agendas and sustainable development is important, there is one elusive facet to it: how can something as intangible as a business' social impact be measured? And how can it be done in a way that can prove its financial efficacy as well? This, in fact, appears to be an issue across the globe. A 2021 Harvard Business Review article argues that current ESG measurement still "fails to capture the complex, systemic nature of social and environmental systems, and indeed that of business organizations themselves."
But Lahdo believes C3 is already positioning itself quite uniquely in the Middle East in this regard by offering the only internationally available accreditation specifically designed to support social enterprises: the Social Enterprise Mark (SEM), awarded by UK-based Social Enterprise Mark CIC (SEMCIC). "We have received the mark seven years in a row, and are currently SEMCIC's exclusive partners in the Middle East," elaborates Lahdo. "We've also launched a pilot program where we are supporting entrepreneurs that are so advanced in their journey that they wish to have support in receiving that accreditation. It's a huge task, and there is a lot of governance involved, but these entrepreneurs are on a mission to prove their impact, and the SEM accreditation will help them do that."
Lahdo also points out that while the issue of social impact accreditation, and indeed the adoption of ESGs, is still an ongoing process, the Middle East is particularly lagging behind in terms of more standardized measurement metrics. The incentive to solve these issues largely lies in attracting more foreign direct investment (FDI), she says. "The FDI in the region is also driving the focus towards sustainability," she adds. "If we start having global investors wanting to see metrics or data on certain ESG criteria, it might push the companies that are lagging behind towards faster ESG adoption. "
As our conversation draws to a close, Lahdo highlights the urgency behind realizing that sustainable development is no longer done in the traditional, one-dimensional way. "The global pandemic has really highlighted the value of ESGs from a multiple stakeholder perspective," she adds. "Sustainability has become the focus of not just investors and corporates, but also customers and employees and governments, as they face the need for a safer, healthier, and more equitable world. So, to make an effective ESG framework, it cannot be set up as a stand-alone department that focuses solely on ESG; instead, it should be the core of business strategy. The tone needs to be set by the top management, and it should filter through to every element of the organization."