Latest industry views and advice

September 21

The worlds of business and investing have traditionally – and unsurprisingly – been “all about the bottom line”. But, today, there’s a “significant movement” among company boards towards Environmental, Social and Governance (ESG) issues and associated measures.

So says Angus Blair – no, not a member of Extinction Rebellion but an investment banker, analyst and asset manager.

During a recent Chartered Institute of Public Relations webinar about how to communicate effectively about ESG and sustainability, he said: “For companies, part of every board’s risk scenario is how to make a sustainable business for the future.”

And that includes knowing whether your business activities are affecting the environment, such as emissions, use of plastic and having plant operations around the world. But knowing is no longer enough. Blair added that, in most stock markets, it’s “essential companies have risk committees, a sustainability officer and a plan,” which are now imperative to board discussions and risk planning.

The business case for going green

A company that appears to provide the template for sound ESG policies as well as communications is Unilever.

Priya Sarma, its head of sustainability and corporate affairs, noted how organisations need to “step forward, be accountable, reduce waste and their footprint”, not least because of the emissions, deforestation and impact on drinking water created by population increase and migration to cities.

However, as well as an ethical stance, this is equally good business – in fact, the future of leading FMCG companies, she said, depends on the health of both planet Earth and its population.

The response of businesses like Unilever is a welcome development for Eleanor O’Keefe, senior director – corporate sustainability EMEA at Edelman and former communicator in the UK Government’s COP26 Unit.

Where inspiring action on the environment had previously been like “pushing a boulder up a hill”, she’s been excited to see a “mobilisation” among the business community across the developed world.

Coincidentally, a McKinsey Sustainability article – Does ESG really matter, and why?published in the same week as the CIPR webinar, concluded that despite business objections to it, ESG ideas “are imperative for companies to earn their social license – that is, the perception by stakeholders that a business or industry is acting in a way that is fair, appropriate and deserving of trust.”

But what does this mean in practice for businesses?

 ESG = active change and communicating truth

It would be naïve to think that a focus on the financial bottom line for shareholders will suddenly stop because of ESG. However, as Angus Blair pointed out, “businesses will have to be more accountable”.

Being accountable in Blair’s eyes equates to active change within companies. As a current example, he cites Unilever’s move to making washing capsules from plant-based ingredients and packaged without plastic.

And so how does this then feed into credible communications that sidestep the “perils of greenwashing” and the scrutiny that attracts:

  1. Start with the facts

Only communicate what you can stand up and say is true,” O’Keefe said. “Start with understanding where you are and audit operations, impact, supply chains and emissions.

What are [you] doing about this, then decide how to communicate.

“Be transparent. It’s OK to say you haven’t got all of the answers but are putting in effort and making progress,” Sarma added.

  1. Share with stakeholders

Putting your ambitions and intentions “out there” means you become obliged to find the ways to fulfil these promises. Sarma said that Unilever had done just this since 2010; engaging with customers, partners and government to support progress.

  1. Involve employees

Employees are a key part of the ESG picture, spreading the agenda internally throughout the organisation; ensuring all teams are engaged and have “line of sight” of what the business wants to achieve.

  1. Identify metrics

Blair highlighted the need for identifiable metrics, such as Unilever’s removal of plastics from packaging. “The moment a company board [decides to appoint] a sustainability officer, the onus is on them to produce the metrics.”

However, the threat to this way of thinking in some quarters of the business community remains: Blair cites the case of Danone, whose ESG-focused CEO was pushed out by hedge funds. He sees the lack of engagement by investors driven more by short-term gain versus longer-term, institutional shareholders as a key debate in encouraging institutions to change course.

Does your business need to communicate its ESG goals and successes? Contact Metamorphic PR.

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