To ESG or not to ESG - that is the question
With ESG regulations being dragged ever deeper into the political debate, especially in the US, businesses' are rethinking communications strategies. So, how can communicators avoid the pitfalls, and successfully highlight business values and ESG initiatives?
On one hand, communicating Environmental, Social, and Governance (ESG) initiatives is crucial to attract ethically aligned investment funds, estimated to be worth a trillion-dollars globally. Communicating values and positive impact also resonates with customers and can boost a business’ reputation, mana to a corporate communications team.
However, recent news from the world of ESG has exposed pitfalls.
From a regulatory perspective, for example, greenwashing can lead to severe consequences, with regulators increasingly willing to levy fines on businesses that talk the ESG talk, while not walking the walk. It’s crucial that businesses coordinate communications with governance teams to avoid any disconnect between rhetoric and reality.
Honesty is crucial in communications and will be respected more than trying to cover things up. So, businesses with fossil fuel interests should communicate realistic, detailed, and time-lined divesting plans rather than making unsubstantiated claims. Being pragmatic about climate change and staying committed to doing the right thing are appreciated.
Having communications or PR teams involved in decision-making around ESG and corporate governance will ensure consistency and help avoid misleading statements. It will also mean tough questions can be addressed internally before facing external scrutiny from journalists, shareholders, and regulators.
What recent months have taught us too, is that businesses should avoid polarizing debates on platforms like Twitter. Online debates are often dominated by extreme positions. Off-line however, there’s room for nuance and subtlety. Communications teams navigating ESG should therefore focus on longer-form written communications that allows for nuance, balance, and honesty.
In this politically charged environment, businesses must communicate in ways that steer clear of hyperbole. Clear evidence-based positions are essential. Make sure your team stress-tests communications before going public, and be ready to address tough questions. Taking the time to plan will allow your business to continue to communicate its positive impact, withstand scrutiny from the public, media, and regulators and, crucially, steer clear of the ‘culture wars’.