Sustainability is more than an ESG report
Sometimes it feels like we’ve been talking about ESG for years. And while the ideas behind it have certainly been around for a very long time, the formulation we know as ESG has only really been mainstream for the past decade or so. The point is that it is still relatively new and it’s evolving.
Much of the drive for more corporate engagement in environmental sustainability, social responsibility and good governance has come from societal pressure. That’s particularly true of sustainability. The pressure comes in many forms, from activist shareholders to, well, activists. Universities and schools across Europe are being shut down by climate change protestors even now, for example.
This pressure is not going away. You might think that is right or wrong but neither your opinion nor mine really matters. What matters is how organisations address it and react to it. The current state of ESG evolution is a heavy focus on reporting. It is, of course, much better than not reporting. However, we are seeing a paradox of reporting becoming more important than actually doing the right thing.
The “what” and the “how” of reporting
There is a real danger of getting caught up in the reporting process and forgetting the focus on the activity behind the report. Or, to be more cynical, it’s very possible to use the ESG reporting process to conceal a lack of action.
It’s also interesting that ESG reporting is in addition to annual reports. There is a strong case that the two should not be separated, reflecting the need for a rethink about how ESG is positioned strategically within an organisation. Is it something keep as an add-on? Or do we need new integrated management models to incorporate the principles of ESG more thoroughly?
Hard laws creating level playing field
I suspect it won’t be a choice. We’ve got new EU regulations regarding ESG coming soon. They will create a level playing field for ESG reporting that will make it harder to use reports to disguise inaction or lack of strategic consideration. The new rules on disclosure will be make it harder to hide anything, in fact. It will also be hard to keep ESG separate from the rest of the organisational strategy.
And it will make the role of public affairs and communications even more important. The combination of the two allows organisations to stay ahead of the legislative and political agenda, and to keep both internal and external audiences informed about what the organisation is doing.
It’s obvious why public affairs is so necessary. The best way to navigate a changing regulatory environment is to have full information about what is happening.
Communications matters because it can support the corporate strategy of ESG integration by linking the organisational narrative to the ESG agenda. An authoritative narrative, based on your organisation’s unique circumstances, can help you help shape the discourse as it applies to you and more widely.
Ultimate goal – creating connections with the key stakeholders
As with all communications, more sophisticated messages resonate more, providing deeper insight into your corporate ESG knowledge. A solid thought leadership programme, supported by senior management, is a very effective way of engaging in the debate. To do that, it is essential to provide a clear narrative, based on the principles of storytelling. That is the very best way to engage and persuade your audiences. It is only by connecting positively with your stakeholders that you protect your implicit licence to operate.
Lukasz Bochenek
Managing Director / Deputy CEO, based in Geneva
Lukasz is Managing Director for Switzerland, Belgium and UK offices as well as deputy CEO for Leidar. He oversees key international client projects and relationships. In addition, he manages external partnerships and memberships of Leidar.