ESG (environmental, social, and governance) is a material risk framework many businesses, investors and observers use to better manage businesses and investments. In addition, businesses regularly engage with and act on wider social and environmental externalities, through changes to their core business models and processes, and/or through philanthropic programmes. But how do we best communicate this?Scepticism is arising around ESG: with some questioning whether businesses are overreaching their fiduciary duties, and others challenging whether businesses can deliver on their societal commitments. A particular criticism arises around the continually evolving nature of ESG, and related concepts such as corporate responsibility, sustainability and CSR that can lead to a lack of clarity and difficulties in robustly comparing one business’s activities with another’s.This online written discussion aims to bring together leading thinking and best practice on how to communicate business alongside social, environmental and governance issues. We invite you all to contribute. Share your insights and suggestions. The full discussion will then be summarised and shared so that you have a practical take-away on how we better communicate the benefits of embedding ESG. DOWNLOAD SUMMARY
Diana Best, Senior Finance Strategist, The Sunrise Project
Abir Chowdhury, URC
Amber Kiani, Director of Organizational Development, Sustainability, and Social Impact at BeQuest Tech, MovingWorlds
Chioma Izuwah, Business Fights Poverty Community Member
Ewan Livingston-Docwra, Strategist, BTeam
Flora von Michel, Business Fights Poverty Community Member
Haron Muturi|, Wake and Shine SHG, Junior Leader, Tharaka Nithi
Jacey Bingler, Senior Communications Campaigner, Sunrise US
João Maria Botelho, Researcher NOVA Business and Human Rights and Environment Research and Board Advisor, NOVA Green Lab
Sherif Muçalla, Researcher, Albania
Paul Rissman, Co-founder, Rights CoLab
Tolu Seun, Business Fights Poverty Community Member
Meredith Sumpter, Inclusive Capitalism
Janset Batibay, Inclusive Capitalism
Elizabeth Waweru, Research and Policy Officer, The Youth Cafe
Moderator: Katie Hyson, Business Fights Poverty
How can we better articulate the benefits of managing environmental, social and governance issues for businesses and wider stakeholders?
What are best practice examples and where are the pitfalls we must avoid?
How can we better work together to ensure joined-up narratives?
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S&P Global report (December 2021) points out that “We see plenty of “E” but less “S” in ESG*”, however they can’t explain Why this is the case.
Until this is explained properly it would be difficult to better articulate the benefits for businesses and wider stakeholders.
What are your thoughts on this?
P.S. Based on my article from 14 May 2022, I’ll provide my answer on 10 May.
For starters, we need to try to depoliticise the term ESG (or use something else). Too many think it is purely about companies wanting to be seen to do the right thing, rather than companies incorporating ESG risks into their strategies, and managing them accordingly. We need to hear this from companies much more vocally. And investors.
I welcome your thoughts to the following: 1. The benefits of managing environmental, social, and governance (ESG) issues for businesses and wider stakeholders can be articulated in various ways, including:
Improving financial performance and reducing risk through more efficient resource use, enhanced reputation and brand value, and better stakeholder engagement.
Addressing societal challenges and contributing to sustainable development by addressing environmental and social issues and creating positive impacts for stakeholders.
Attracting and retaining employees, customers, investors, and other stakeholders who are increasingly interested in ESG issues and seeking to align their values with their choices.
To better articulate these benefits, businesses can leverage frameworks such as the United Nations Sustainable Development Goals (SDGs), the Global Reporting Initiative (GRI), and the Task Force on Climate-related Financial Disclosures (TCFD) to communicate their ESG impacts and risks to stakeholders.
I recently met with a large group of consultants from Boston Consulting Group. They’re struggling to explain to their clients how ESG initiatives can improve ROI. I suggested that their investors will pressure them to do it if they don’t do it themselves, because investors are becoming increasingly aware of systemic risks related to climate change, inequality, anti-microbial resistance/pandemics, the rise of authoritarianism/erosion of the rule of law, etc. Last year between 10 and 15% of activist challenges to boards involved an environmental or social ask. Most business groups use a “race to the top” theory of change, but the carrots should certainly be augmented with sticks.