ESG reporting is non-negotiable
Business conditions are going to get tougher in the next 12 to 18 months
It is a reality we all have to face up to. As ever, some companies won’t survive, some will thrive and most of will muddle through somehow by making cuts where possible and looking for alternative sources of revenue.
But it’s also important to remember that economies will recover. Their waxing and waning is a defining feature of how modern economies function. And by modern, I mean the way economies have been structured in the past 300 years or so in developed nation states. There has been war and pestilence before, followed by better times.
What’s new this time is that we are also facing environmental change that will fundamentally alter the way we live. We all have a duty to act now, to reduce our collective impact to keep the scale of change as low as possible for the long-term, however hard that might be. This is a much bigger challenge than the economic downturn and we cannot let ourselves use the economy as an excuse to stop doing what we can to protect our planet.
A second major difference is increased scrutiny. We all have access to more information than ever before. And people aren’t afraid to use that information to hold power to account. The result is that companies, quite rightly, face increasing scrutiny, in particular regarding their sustainability operations.
That’s what makes Environmental, Social and Governance work such an important part of both what a company does and what it communicates.
What matters most, of course, is the operations. It’s a bigger deal for some businesses that others. On one level, it might be about switching to a provider that supplies energy from renewable sources. It could also mean a major investment in new hardware to transition away from fossil fuels.
What matters most, of course, is the operations. It’s a bigger deal for some businesses that others.
But that is not enough on its own. Every stakeholder – employees, customers, shareholders, suppliers, neighbours – needs to know what you’re doing to be more sustainable.
Look at that list of people again and remember that ESG isn’t just about the E. The Social and Governance aspects are not just add-ons: they need to be an integral part of the thinking, operating and the reporting. In fact, we know that Governance is becoming increasingly important for consumers.
It’s the old cliché of both doing the right thing ad being seen to be doing the right thing. The being seen bit matters. That’s the first reason ESG reporting is so important. An accurate and complete annual ESG report, that is properly communicated to your stakeholders, is rapidly becoming as important as a traditional Annual Report in showing a company’s operations and progress to both internal and external audiences.
The reverse side of that coin is equally important. The absence of an ESG report is a red flag. What are you trying to hide? Are you scared of greenwashing?
And finally, and perhaps most importantly, as with all reporting, compiling an ESG report is an interesting exercise in verifying exactly what has been achieved over the past year and what is in the pipeline. That leads to the question we all need to ask ourselves: what more can we do?
But the big picture is that we cannot afford to allow ESG work and ESG reporting to slide.
Senior Advisor, International Communications, based in London
Charlie is an experienced communications consultant who started Leidar UK in 2010. He is responsible for developing and implementing communications strategies for companies and organisations of all sizes and in many different sectors.