Materiality had some sober moments at the GRI Global Conference in Amsterdam this May. It was evident that established reporters are asking more pertinent questions about the value of the materiality determination process. Some are starting to do it less frequently (for example every three years, not annually). This raises three important questions:
- The frequency or timeliness of the materiality determination processes;
- The level at which the process is conducted - for example from local community engagement to global "expert" stakeholder panels; and
- The extent to which reporters build in a forward-looking dimension and ask stakeholders about "actual" versus "potential" significance.
On the time dimension, RobecoSAM noted during the Sustainalytics Master Class that the time horizon it applies for specific issues is typically three to five years. Applicable time frame is influenced by both the industry sector and the issue context involved. In the case of an issue such as climate change, significant events can range from very long term to very short term developments. The Conference featured findings from the first report of the Financial Stability Board (FSB)'s Task Force on Climate-Related Financial Disclosures. The report states that climate risks can result in disruptive events, and that such cases require a timely update of climate-related disclosures. At the same time its recommendations expect longer term, forward-looking information that is backed up by scenario analysis. The implies adequate research. Note that international reporting standards typically recommend five tests for applying the principle of materiality (see Materialitytracker for a comparative overview). They imply not only stakeholder engagement but also a fair amount of desk research. In its materiality methodology the Sustainability Accounting Standards Board (SASB) has described it as examining evidence of interest, evidence of financial impact and consideration of forward-looking impact (including possible systemic disruption). With respect to time frames in the context of specific industry sectors, ABN AMRO noted that private banks (working with family money) would tend to think longer term, corporate banks would tend to focus more medium term and retail banks more short term. Compared to other financial subsectors, retail banking is more regulated and exposed in offering products of relatively small amounts at high interest rates to for example households. Being more regulated and exposed to consumer pressure also leaves retail banking or consumer finance with topics such as affordability and privacy as highly material issues according to the sector standards of SASB. On the other hand, SASB does not list business ethics as a material topic for consumer finance, but rather for commercial banking, investment banking and asset management among seven subsectors of the "financials" sector category.
For leading reporters the prioritization of stakeholder groups are becoming more refined. This includes being more focused in targeting certain business unit leads, rating agencies and investors for engagement. Experts on global stakeholder panels can provide valuable advice to multinationals, often free of charge mind you, but after years of operation some of those "critical friends`' can become too "friendly". Some business managers express the sentiment that much of the materiality determination process boils down to common sense or gut feeling, and that there is little need for doing an extensive process every 1-3 years. For some simply going through the materiality process annually becomes a "tick the box procedure" that risks no longer being strategic.
Some exclude from the materiality determination process discussion of topics seen to be "universally material" - topics such as governance and ethics noted Deloitte in its Materiality Master Class. Describing its approach, RobecoSAM explained that some "cross-cutting topics" are evaluated irrespective of their position on its industry sector materiality matrix. These are topics such as corporate governance, codes of conduct and reputational risk (assessed through media analysis)
The special status of some topics brings to mind an issue raised by the online hub Materialitytracker, namely level of aggregation and the level of specificity at which material topics are defined. Materialitytracker identifies the key material topics reported across sectors by the DJSI Industry Leaders since three years. Some define material topics at the level of "Aspects" (as per GRI G4), listing topics such as "governance". Others go to a deeper (in some cases indicator) level and prefer to be more specific in defining topics - for example "director remuneration" and "scope 3 emissions" - i.e. subthemes of "governance" and "climate".
In the most recent edition of Defining What Matters (2016), the GRI and RobecoSAM differentiates their definitions of materiality as being about "reporting materiality" versus "financial materiality". A graphic in the report (see below) illustrates that the list of topics that represent "reporting materiality" and "financial materiality" overlaps but that neither fully encapsulates the other. Traditionally, certainly in financial accounting, the assumption is that"materiality" is about content that goes into a report. The question then becomes: Which report?
During a session presentation of their study (covering the three sectors mining, metals and utilities) at the Global Conference, GRI's Alyson Slater posed a question about possible differences between what is reported to be material versus what the sustainability rater finds to be material. Why did some participants expect any difference between what reports from a particular sector disclose to be material versus what RobecoSAM in its analysis of that very same group of reporting companies may found to be most material. I argued it depends which report you are looking at. If it were a sustainability report, its content may be highly material in the eyes of diverse stakeholders. However, if it were an integrated report, the content may more specifically be "financially material" in the eyes of the providers of financial capital. RobecoSAM is quick to point out that its sectoral materiality matrices reflect the views of RobecoSAM as investor (asset manager). Its focus on "financial materiality" or what I would call "integrated materiality" therefore resembles the content one would expect in an integrated report as defined by the <IR> Framework of the International Integrated Reporting Council (IIRC).
The Sustainalytics Master Class included a panel discussion with RobecoSAM, ABN AMRO , E&Y and an academic from City University London. Sustainalytics highlighted the findings by Harvard researchers Khan, Serafeim and Yoon (2015) that firms with good performance on material sustainability issues significantly outperform firms with poor performance on those issues. This is based on their examination of the stock performance since the 1970s of 2307 firms from the MSCI KLD dataset and cross-referencing sector-based material topics as identified by SASB in the USA. They conclude that investments in sustainability issues are indeed shareholder-value enhancing.
In describing its value-added analysis to support more informed investment decisions, Sustainalytics noted that certain "key ESG issues, if unmanaged, may have significant negative impacts on an issuer's business and/or the environment and society". This raises the possibility of certain issues - such as human rights - not being viewed as "financially material" to a reporting organization even though it may have significant negative impact on society.
RobecoSAM described how it feeds "financially material sustainability data" into its integrated analysis to determine fair value. Just to be clear, the latter refers to the value of a share price. Based on its assessment of sustainability risks and opportunities, a certain percentage gets added or subtracted from share price to determine the eventual "fair value". Annual reportback by members of the UN Principles for Responsible Investment (PRI) suggests that this integration with the fair value analysis of listed equities is still a minority practise. While possibly half (USD 60 trillion) of Assets under Management (AUM) world-wide are signed up to the PRI today, this obviously does not imply that all signatory members overnight apply all the principles to 100% of their portfolios. In the recent independent evaluation of the PRI following ten years of its existence, the PRI itself acknowledges that its signatories' implementation still lacks depth
RobecoSAM assured participants that it considers both the downsides (risks) and upsides (opportunities) when adjusting value, despite using (like IIRC) the risk analysis matrix and considering magnitude alongside probability as framing criteria. Its integrated analysis involves assessing financial materiality by examining impact on the business value drivers - namely revenue growth, profitability, capital efficiency and risk profile. This is based on the financial value drivers identified by Alfred Rappaport in the 1980s, as I highlighted before (see Integrated Reporting of 21 November 2014). They are also employed in the methodology of Sustainalytics, which in its Extended Shareholder Value Model makes the link between ESG issues and the financial value drivers - including cost of capital and tax rates.
The "financial" impacts are also the focus of the FSB Task Force, which highlights the lack of "reporting regimes" or disclosure instruments that specifically extend the analysis to this level (in particular financial risks). The first of its seven recommended principles for climate disclosure addresses materiality, stating that "Disclosures should present relevant information". In explaining this principle, it zooms in on "business model and strategy" (like the IIRC <IR> Framework). It argues that a company "should provide disclosures to the extent the underlying aspects can have a significant impact on the business model, strategy risks, or future cash flows". Traditionally, the latter is of primary interest to financial analysts and investors. The primary interest of the Task Force is financial reporting (considering disclosure venue / placement), and it displays greater concern about "risks". Its definition of "materiality" describes it as being about "information on economic, environmental, social and governance performance or impacts that should be disclosed" (own emphasis).
Back at the Conference master classes, Jean-Pascal Gond of Cass Business School described the focus on the financial dimensions of ESG impacts as a form of legitimization. With it comes the risk of being too narrow or reductionist in focus. Heather Lang of Sustainalytics described it as thinking more about financial materiality as you narrow it down. Their approach to thresholds in determining materiality is not focused exclusively on "financial" materiality though. It is not a simple mathematical formula of determining significance only in financial terms. Clearly the unpacking of costs and benefits is not an exact science (as yet). Even financial accounting standards have always made clear that materiality involves (experienced) judgment, one that considers of both quantitative and qualitative information, as well as financial and non-financial information.
Read Part I on the GRI Global Conference 2016, 31 May
Data was the centre of excitement at the GRI Global Conference held in Amsterdam this past May of 2016. Having been part of the GRI process since its foundational days, it has been fascinating to see the movement evolve from the early mission "for sustainability reporting to become as routine as annual financial reporting" to the new mission "to liberate sustainability data from reports". Only in this way can the data be analyzed and integrated in a meaningful way, argues GRI chief executive Michael Meehan.
And while many assume that more data will bring us closer to solutions, wise words at the Conference came from statistics professor Enrico Giovaninni from the University of Rome. He cautioned that data also creates new divides. For one, the data debate tends to be dominated by IT specialists, statisticians and consultants throwing about the latest jargon. It tends to be a technical or expert debate that may very well leave many GRI stakeholders feeling alienated. This brings the challenge of turning complexity into simplicity, an art for which one needs Steve Jobs-type technology visionaries.
As we weigh the opportunities offered by more data, do not forget the old phenomenon of "information carpet bombing". It is one that sustainability thought leaders like John Elkington himself identified in the early 2000s. What is really Big Material in the face of Big Data? During a plenary debate at the Conference someone mentioned that the predictions made by the Club of Rome in the early 1970s are still surprisingly accurate. The global trends and exponential growth in world population, food production and resources depletion as focused on by the Limits to Growth (1972) computer simulation study may indeed leave us with global system collapse by 2050. If they were so accurate and common sensual over fourty years ago, based on data available back then, what more do we really need today? At what point does common sense kick in? What should make us conclude that so much more data in the 2010s will suddenly help us to see the light of day and dramatically transform in a ways we have not been able to do in the last five decades?
During the launch event of the 10th anniversary edition of our report Carrots & Sticks with KPMG, UNEP and GRI, I pointed out that the Sustainable Development Goals (SDGs) can be thought of as a "shortlist" of the key material topics for our globe at this point in time. Despite the interest in these themes, what was coming short at the GRI Conference was making the connection between the SDGs, Big Data and the new GRI standards. Often lacking in plenary discussions on data was:
- Associating the data with the performance of individual organizations (i.e. reporting companies), being entity specific and making the macro-micro link as opposed to a generic discussion on all sorts of data (including Big Data); and
- A lack of appreciation of the mass of contextual data that has been collected by governmental institutions and international public research initiatives since decades. (These include the data collected by institutions such as NASA, the World Bank and UN Global Observing Systems.)
The first above is addressed more or less directly by initial recommendations from the new GRI Technology Consortium on the future of sustainability data, made public at the Conference. One of its five recommendations is the need for a public and open global repository of public sustainability data. One could argue that this is provided by platforms like Corporate Register, which hosts over 75000 corporate reports accumulated since the 2000s. But the Consortium's interest is in making it easier to access, extract and compare data outside of "reports", in a world beyond paper and PDF documents. The easier access and comparability of data also makes the case for more specific GRI standards (on subcomponents of the GRI Guidelines).
The focus on digital information presents all sorts of challenges for old disciplines such as the legal profession as I've argued before (see "Good bye sustainability reports, hello sustainability reporting", May 2014). The Consortium recommendation is also different in that it asks for a public good. This is different from the equivalent information service provided on commercial terms by the likes of Bloomberg and Thomson Reuters to investors. An example of what the Consortium may have in mind is the new Wikirate, a platform profiled in a workshop on "Radical Transparency" hosted before the Conference by the Reporting 3.0 initiative. Wikirate relies on crowdsourcing to compile data and information on various aspects (as per GRI G4 and others) of a company's operations. This includes data reported by the company itself, as well as data available publicly from other sources.
The Wikirate approach reminds of recent reports by Thomson Reuters and BSD Consulting on the GHG emissions of the Global 500, in which publicly available information was used to estimate the GHG footprints of almost 150 of the Global 500 who still do not disclose their GHG emissions. As exciting as Wikirate is, the Berlin-based initiative will be challenged in (a) mobilizing public support (beyond mainly post-graduate students from say Europe) and (b) looking beyond the usual suspects, for example a top 100 companies who report extensively, versus thousands of lesser known, large companies world-wide who in many cases do not even disclose significant sustainability data in the first place.
In its latest annual Reporting Awards, Corporate Register (see CRRA 2016) employed "Relevance and Materiality" as one of its criteria. It describes it as focusing on:
- "the report which cuts to the chase and tells us about the material issues (those that are specific to the company performance and sector, the risks and opportunities), clearly and succinctly".
Most will agree that this sounds attractive indeed. Such clarity (or the lack thereof) also has important implications for business model innovation. Being clear on materiality is key for making the business case, having a convincing value proposition and defining a business model that has sustainability built into it. So argued Knut Haanaes, Geneva-based partner of The Boston Consulting Group (BCG) in a recent webinar on their latest annual survey report with MIT Sloan Management Review. The 2016 edition of their Global Executive Study on corporate sustainability highlights that senior executives underestimate the level of interest that senior investment managers are showing in ESG data.
The GRI Technology Consortium members include MIT Sloan. Its survey with BCG hints at a certain skepticism about sustainability ratings today (were they able to predict BP and VW type scandals?) and the possibility that more companies are developing their own benchmarkings in-house. In defence of sustainability ratings, service providers such as Sustainalytics would argue that more advanced rating today has become more dynamic in reflecting changes in the materiality of topics. The new GRI standards approach also recognizes the evolving nature of an ESG agenda and will allow for the formulation of individual topics and indicators to undergo revision on a "when required" basis. Furthermore, agencies such as Sustainalytics would argue that more integrated rating today is also applying more rigorous weighting based on materiality considerations informed by quantitative data analysis. The emerging ESG Ratings Hub of the Global Initiative for Sustainability Ratings (GISR) will provide more transparency about the nature and quality of methodologies applied by rating agencies (including those accredited for applying the GISR principles).
Somewhat data-bombed and lost in translation at the GRI Conference, I attended materiality-focused discussions and two Master Classes on Materiality presented by respectively Deloitte and Sustainalytics. Two themes that struck me was (a) perspectives on the materiality determination process, including how the time dimension is dealt with, as well as (b) making the link between sustainability data and financial data. Let me start with the process.
Materiality process and its value
The master class by Deloitte among others highlighted the apparent disconnect between, on the one hand, (i) a resource intensive process of determining materiality that companies conduct every 1-3 years, involving often diverse stakeholders, and, on the other hand, (ii) the content provided in sustainability reports or content tabled at senior / top management discussions. If a company invests all the effort in determining material topics through an inclusive process, it is puzzling and a missed opportunity if strategic and Board level discussions do not effectively make use of the resultant information. The latest WBCSD Reporting Matters (2015) study found from its examination of 169 WBCSD members' non-financial reports that while 82% of them disclose the use of a materiality determination process, only 30% focus their reporting on those issues they consider to be material to their business.
Talking to South Africa's Mervyn King afterwards, he underlined to me the importance of exposing Board members and ensuring they hear what diverse stakeholders have said. This was echoed in the second Master Class, hosted by Sustainalytics, where Jean-Pascal Gond of Cass Business School (City University of London) argued that the materiality analysis has institutional value in that the matrix tool presents broader societal concerns, helps to renegotiate boundaries and coordinate the actions of people.
Who to involve in the materiality determination process and at what level remains open to experimentation. In the 2000s I worked with AccountAbility in developing The Stakeholder Engagement Manual (2006). Its guidance on how to prioritize stakeholder groups remains highly valuable. Describing its process, ABN AMRO bank highlighted its categorization of stakeholders in four priority groups: clients, investors, employees and society at large. Producing an integrated report based on the IIRC <IR> Framework, it describes its value creation process in terms of the six Capitals. Under Financial Capital, it highlights with respect to inputs its reliance on investor equity and client deposits. Also under Financial Capital, it highlights with respect to outputs the bank's contribution to the national economy by providing debt capital (lending) to households, small businesses and corporates as well as its improving Return on Equity (RoE) to ensure a good dividend paying capacity vis-a-vis its shareholders (investors).
As one of the three biggest banks in The Netherlands, it is no wonder that three of the top material topics reported by ABN AMRO is the privacy, security and stability of digital services to its clients. Another is compliance with legislation and regulations. The new Carrots & Sticks report indicates that financial institutions have received special attention in many new disclosure requirements introduced by diverse instruments (regulations and other) over the last five years. If what is required by law to be included in an annual report (for example a statutory document) were to be material by definition, one cannot help wondering if in some cases what is material may not be strategic.
More on this in Part II of my GRI Global Conference 2016 blog.
As business representative you may have decided to attend the climate convention conference in Paris from 30 November to 11 December 2015. In formal UN-speak it is the 21st Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC). It includes a Meeting of the Parties (MOP) which is the term used to refer to the convening of signatories to the Kyoto Protocol, versus signatory members of the overall umbrella convention. You may be wondering how best you can contribute, why you decided to attend in the first place and what your follow up will be as the new year approaches.
I was involved in the climate negotiations during two years leading up to the Kyoto COP of 1997, the conference that delivered the Kyoto Protocol. As multilateral diplomat at the time, I had the envious task of coordinating our South African delegation. For anybody who has been involved in the negotiations at some point, it is amusing over the years how common misunderstandings of the process and what to expect continue to come up in the public debate and media commentaries. Looking back at environmental negotiations 20 years ago and my subsequent research in this field, let me give you some tips:
First, if you convinced your chief executive or were convinced by peers that you need to be there to "influence the negotiations", you are probably in for a big disappointment. The core negotiations are conducted behind close doors and only members of official country delegations are allowed to participate and take the floor in these. This means that, as part of a crowd of what now is over 40.000 people attending the event, you may be able to sit in as observer during plenary statements but you will in all likelihood get nowhere near the core negotiations. The closest you may get, if you are a paid lobbyist, is tackling delegation members with arguments in the corridors when they exit the negotiation rooms, at lunchtime side-events or evening cocktails that your business organisation may have sponsored. Delegation members will see you for what you are, possibly considering you as a useful source of expert knowledge or as an irritating lobbyist making predictable statements. I've seen NGO representatives in plenary walk up to government spokespersons, giving them a piece of paper while encouraging them to make a certain point in response to what was just said. At the later stages in the negotiations, especially late night sessions of the second week, those governmental negotiators may become increasingly agitated by such interferences.
Here is a tip: If you really want to influence the negotiations during such a conference, make sure you become a member of an official governmental delegation. A number of countries include nongovernmental representatives on their delegations, for example an external scientific advisor and a representative from a national business association. Countries that have traditionally included NGOs on their delegations are Denmark, Switzerland and Canada. This allows the NGO representatives to play a hybrid role, compared to different roles such as that of activist, observer, legitimator or monitor. South Africa was one of the few countries to maintain a multistakeholder delegation, including representatives from not only key government departments but also representatives from key industries, the scientific community, environmental NGO and labour unions. Having such openness is good for constructive debate and pooling of national expertise. It can also be nerve-wracking for a delegation coordinator. On more than one occasion I've had to intervene when an opportunistic representative from a polluting industry tried to talk the Minister (head of delegation) into a new position "in the heat of the moment".
Second, if you decided only during the last three months to get involved in the process and/or attend the Paris conference, you may very well have been better off staying at home. Point is that the climate negotiations is an ongoing process of various preparatory sessions held annually in the lead up to the COP in December. In the Kyoto process we had four two-week sessions annually, which meant regular visits to Bonn. If you therefore wish to influence the negotiations, you need to get involved early in the process.
Another tip: The best place to "influence the negotiations" is not Paris or some other city abroad where the next COP is due to be held. Key rather is to influence the negotiations via national processes convened by Government in the country where you are based. In South Africa we created a National Climate Change Committee (NCCC) in the 1990s. Convened by the Environment Ministry, this multistakeholder consultative body included representatives from diverse government departments as well as key stakeholder groups (including industries more obviously impacted). This is where we had heated debates in formulating our national positions, agreed on follow up after convention meetings and decided on national projects with international support. Bottom line is, this is where key positions are shaped, feeding into and responding to outcomes of the international events. So start getting active locally, especially in the country where your business is headquartered.
Third, you have decided to attend Paris and wonder how to make the best of the situation. Irrespective of the negotiations, the event is a fantastic networking opportunity where hundreds of experts in climate science, climate economics, climate finance, climate friendly technology etc meet up annually. There are other international events where similar networking happens, but this one is particularly effective in convening climate networks. It remains the case even if that networking is happening "off site" at external venues where for example special business and research events are held. Compare the Sustainable Innovation Forum and the Caring for Climate Business Forum convened by the UN Global Compact and others in Paris this December, and the Business & Climate Summit held in Paris during May 2015.
Tip: If you are trying to make sense of what is really happening with the negotiations other than what you take from the political gossiping at cocktail events and what you read in the daily Earth Negotiations Bulletin, do consider the following. In the midst of the negotiations, various chairman contact groups and informal negotiation groups are convened. At the same time parallel discussions are held in the main convention bodies, notably the subsidiary body for scientific and technological advice (SBSTA - incl the latest IPCC science and tech solutions) or the subsidiary body for implementation (SBI - implementing schemes such as emissions trading, verification and financing). All of this means that at any point in time during the circus, no single person knows exactly where things stand and what the final negotiating text will look like. The ones most informed on this are the Ambassador / Minister chairing the overall negotiations, the head of the UNFCCC Secretariat, and the supporting event Bureau with elected governmental representatives. The secretariat has to consider how best to "manage" the process. For 2015 they and the French hosts have done an impressive job in seeking to have the most difficult issues agreed in advance of the December COP.
In the aftermath of the failed Copenhagen COP of 2009, research by IR specialists Gunnar Sjostedt and others have highlighted stumbling blocks to overcome. These are structure-related ones (external context and internal factors such as the structure of the conference and its negotiating bodies), issue-related stumbling blocks (consider the transboundary nature of the problem, exceptional uncertainty, extreme values at stake, extreme complexity, immeasurability and horizontal linkages with other issues such as trade), actor-related stumbling blocks (such as the need to win over brakemen, negotiating capacity and leadership problems) and process-related stumbling blocks (including tactical facilitation and the behaviour of individuals who have been involved in the process for many years).
Fourth, do not be misled by superficial arguments commonly repeated in the public discussions and daily media reports. These are statements such as "developing countries will not commit before developed countries show commitment, and vice versa" or "governments cannot agree because they and their lobbyists do not understand climate science or the urgency of the situation". In many multilateral environmental agreements of the last 30 years the assumption has been that developed countries take the lead in addressing industrial pollution issues (ones they have been most responsible for causing), and that developing countries are given a grace period of often 10 years before they take on similar commitments.
In the climate case, it was therefore always known that it is only a matter of time before developing countries (Non-Annex I Parties to the UNFCCC) will need to take on binding GHG reduction commitments. The fact that they have not taken on these in the 1990s is no excuse for developed countries not to speed up implementation of their own commitments. Also, it must be added, developing countries are late in taking on their binding targets under the climate regime - way back the expectation was ten years after Kyoto i.e. 2007. So it is high time for both sides to take on new binding commitments and not play the game of chicken, even though the binding status of the expected Paris agreement (for example a new protocol under the umbrella convention) is still uncertain. The new Paris agreement will also require further fine tuning. It took a decade for the Kyoto agreement to get to implementation stage.
My final tip: The fact that major governments involved cannot agree is not because their representatives are ignorant and don't get climate science. Even if all understood it and the urgency of the matter, this is no guarantee of an easy global agreement. Back in Kyoto 1997 most of us knew that what was agreed was not enough. The agreement to introduce a market mechanism (emissions trading and joint implementation) at international level was historical, but the GHG reduction targets were more political than science-based and simply not ambitious enough. What will come out of Paris will not be enough as well. Scientific research suggests we are heading for 3 degrees Celsius change - failing to stay below the 2 degrees Celsius temperature change above pre-industrial levels. Paris will produce a long list of individual, voluntary country pledges (plans) that from an implementation point of view makes for a shaky start.
Why this failure to come up with timely, effective and sufficiently ambitious agreements at global level? It is the problem of collective action. Even if you know what would have been the better option, you take a suboptimal decision since you fear that your peers or competitors will not take the optimal decision. It is the equivalent of a Prisoner's Dilemma, where the logical (rational) decision for each side is to defect and end up with a second best, suboptimal outcome. It is maybe not the worst outcome, but it is second best. And with so many players involved, despite the learning opportunities of game repetition, it is simply too tempting to be overcome with a certain fear. It is the fear that if you did what is really required, you may be left out in the cold since others do not do the same as well. The UNFCCC secretariat may be trying its best to have players focus on the bigger picture (sense of being in the same boat). Yet the pressure of global economic and trade competition results in a play of almost 200 countries unable to get themselves collectively to accomplish the scale of transformative action required.
One can think of alternative forms of global problem solving that may produce more optimal results. For example organising two separate conferences, one focused on mitigation and one on adaptation. Involving in each only the key players implied in both cases may result in more focused discussions and agreement. Also, consider that it is really a small group of countries and industries that are most responsible for GHG emissions. You may find that ten countries and ten industries produce the greater part of global emissions. If a mitigation negotiation were to involve only the leaders of these main countries' governments and largest companies of the most implied industries, plus additional representatives from internationally recognised science & technology bodies and international NGOs, such a smaller, multistakeholder group of key players could be tasked to negotiate a solution. Subsequently their agreement could be presented for approval to the rest of the world. My guess is that the smaller group of key players would come up with a much more accurate agreement, one that few would be able to argue against convincingly.
This approach requires going beyond conventional International Relations as maintained by UN institutions and International Law as defined by Delft's Hugo de Groot. It requires a willingness to experiment with global governance that is multistakeholder, engaging only the big players most implied in a problem, and taking on an agenda that is functionally needs-driven and timely. It is the type of approach that organisations such as the World Economic Forum may experiment with. It does not imply a global elitism and dominance by big business. It simply recognises the need, at a certain (e.g. global) level of governance, to engage those players most implied in a problem and its solving. It is the very contrast of endless plenaries with long, repetitive statements by smaller players simply intent on slowing the process as much as they can - something of which I have seen far too much by the likes of OPEC member states.