The tenets of ESG are evolving rapidly and hence so are the expectations from communications professionals responsible for advocating for it. ESG Communicators will have the difficult task of reconciling increasingly complex socio-political, economic, and environmental changes. In 2019, The Arthur W. Page Society released study guide to help chief communication officers (CCOs) and their teams achieve this. Stakeholder Capitalism and ESG: A Guide for Communication Leaders case-in-point examples to illustrate how Page members’ companies have defined and implemented commitments in each of the three areas of societal value or stakeholder capitalism.
Roger Bolton, President of Page has been on a listening tour across the globe to develop the study further for the benefit of CCOs worldwide. Previously, Bolton served as senior vice president of communications at Aetna with responsibility to lead culture change in a strategic business transformation. Before Aetna, Bolton led IBM’s global media relations and directed communications for the IBM server and software groups.
Prior to his business career, Bolton was assistant secretary of the Treasury for public affairs under President George H.W. Bush; assistant U.S. trade representative for public affairs under President Reagan; and special assistant to President Reagan in the White House, with responsibility for the president’s relations with business and labour.
During his India visit, Hemant Gaule, Dean of the School of Communications and Reputation got a chance to interview Roger on the topic of ESG, and implications for communicators for the future. In this interview, Roger speaks about the state and future outlook of ESG Communications, the expectations from communications leaders on this front, and the challenges and opportunities that lay ahead.
Is ESG a fad, masquerading as ‘woke’ capitalism? Or is ESG a broad concept that is still evolving, capturing most of the efforts by companies to do the right thing?
ESG is just one piece of a genuine, authentic, evolving commitment to create societal value that is increasingly referred to as stakeholder capitalism. In the recently released Page Guide to Stakeholder Capitalism and ESG, we reference three critical dimensions:
- How the company creates value, not just for customers and shareholders, but more broadly for all stakeholders and society at large, through its core business – its products and services. This is about corporate purpose. It’s the answer to the question, “Why do we exist?”
- The materiality and impact on all stakeholders of the company’s environmental, social and governance (ESG) operations, policies and programs. This involves efforts to mitigate negative impacts of the company’s operations (e.g., climate, environment, human rights violations)?
- Deciding whether the company should take a stand on societal issues that are important to key stakeholders as an expression of values or to advocate on behalf of employees’ or other stakeholders’ interests.
In all three areas, organisations must focus on delivering and then reporting on their efforts in a measurable and transparent way.
I agree with Fortune CEO Alan Murray, who recently wrote, “I continue to fail in my effort to find companies backing off of their ESG commitments. Despite predictions of pending recession and despite political pushback, big companies continue to focus on ways to improve their social and environmental impact.”
- How do you see the importance of sustainability for business’ performance? To what extent are organisations recognising and acting on ESG? Are the actions predominantly reactive or proactive?
Organisations are reacting, appropriately, to increasing demands from stakeholders, including their employees, customers, investors and civil society. But the best organisations also are proactively examining all of their operations and the impact of those on environmental and social needs. Beyond that, many increasingly are using the sometimes-competing demands and requirements to think innovatively about long-term, sustainable growth for their enterprises, along with the health of the planet.
- What kind of strategic communications counsel do organisations require from their internal and external communications teams on ESG Communications?
The strategic communication function is naturally at the centre of all three dimensions of stakeholder capitalism as a result of our natural role as the interface for the organisation with its multitude of stakeholders. Our responsibility to build a positive reputation for the organisation requires genuine efforts to build mutually beneficial relationships with all important stakeholders.
Organisations rely upon us to bring in the broad multi-stakeholder view and to advise on how they can build genuine commitments in all three dimensions of stakeholder capitalism. However, strategic communication leaders must not stop there. We have an obligation to work across the C-Suite to ensure that the organisation’s commitments are implemented with operational plans and encouraged with policy changes and performance incentives.
- What is the role of organisational leadership in ESG Communications? Are business leaders expected to lead these from the front? Or is it a task better suited for experts or dedicated ESG leaders?
It’s important to have dedicated ESG specialists to engage in complex materiality assessments and to deal with confusing reporting requirements. But it’s impossible for the organisation to make meaningful progress without the committed engagement of the business leadership.
The chief communication officer is well placed to work with the CEO and across the C-Suite to ensure meaningful business commitments, which must be reflected in strategic and operational planning, the development of appropriate policies and performance incentives, reporting and gap analysis.
- What are the biggest challenges in ESG Communications?
There are several, starting with thoughtful engagement with all important stakeholders to understand their wants and needs. Next, one must get the focus of business leadership onto the issues. This requires making the case for change.
Then, commitments must be made with the full involvement of all relevant parts of the organisation. This includes setting the operational goals. If business leaders are not a party to defining the commitments, they will not be on board with meeting them.
The commitments and plans must then be moulded into a compelling story with tangible goals and communicated to all stakeholders, internal and external.
Finally, it’s critical to hold the organisation accountable by reporting on progress.
- What is critical to the success of ESG communications? How do you measure the success of ESG Communications?
The most critical factor is authenticity, and that requires the organisation to do what it says it will do. The strategic communication leadership must be involved with business leadership in ensuring that this occurs. When it does so successfully, the communication of progress will earn a positive reputation and brand affinity for the organisation with its stakeholders. When done well, and over the longer term, an effective focus on sustainability also can enhance innovation, attract and retain top talent, and drive business success.
- Which areas of ESG are likely to be of predominant focus for organisations by and large?
It’s clear that climate change and the environment are at the top of the list for most companies, requiring meaningful efforts to build toward a zero-carbon future while also addressing any other negative impacts of the organisation’s operations on the environment. In addition, there are critical social issues that include health, safety and economic justice for all employees, including throughout the organisation’s supply chain. Finally, there are global socio-political-economic issues demanding attention, including the war in Ukraine, food shortages and hunger, human rights and slavery, challenges to democracy, and others. Businesses cannot solve all of these issues, but can play a constructive role on issues that are aligned with their mission and values and where they have influence and standing.
- How does an organisation strike a balance between communicating effectively and while not being labelled as Greenwashers?
Here, I have to quote the first two Page Principles: “Tell the truth” and “Prove it with action.” Arthur Page himself famously said, “Public relations is 90 percent doing and 10 percent talking about it.” The only way to avoid having greenwashing or purpose-washing accusations stick is to actually deliver on the commitments, and, if we fall short, to admit the errors and announce concrete steps to address the gaps.
You can see why the strategic communication function has such a stake in helping the enterprise to make realistic commitments and to building the operating plans, policy changes, performance incentives and reporting to make it real.
The responses above are from Roger Bolton – President – Arthur W. Page Society