Is there a standard for measuring ESG?
There is a myriad of ways to access information about ESG and sustainability and once you are fully attuned to the issues, almost everything links back to an Environmental, Social or Governance topic in one way or another.
From the Financial Times’ Moral Money to Bloomberg Green to the Sun’s Green team, there are plenty of places to find the latest news and insights. This is not to mention the numerous webinars, which are often recorded and can be listened to as helpful podcasts during your lunch break.
Last week I listened in to PR Moment’s webinar entitled “What’s your ESG risk?”, which included a panel with Instinctif’s managing partner and Reinventing Responsibility lead, Victoria Cross, speaking alongside John Thompson, head of communications, Actis and Bieneosa Ebite, MCIPR, head of corporate communications, Centrica, to discuss “How do you select the best ESG Framework for your business?”
While it is widely accepted that being a purpose driven company is 2021 is important, it quickly become clear from the panellists that there is very little harmonisation around current standards and reporting. From a private capital standpoint, John talked to the difficulties that this presents for firms, as well as for institutional investors who need to process the data, which led to Actis developing its own model.
By 2025, most listed businesses will be using the Task Force on Climate-related Financial Disclosures (TCFD) but as the name suggests, these relate to climate which is of course only one part of the discussion. Victoria highlighted the difficulties around harmonising reporting frameworks when the required standards differ so much from sector to sector.
There are broader sustainability reporting systems, such as those developed by the Sustainability Accounting Standards Board (SASB), Victoria shared that what it comes down to is choosing the standards that best suit the business in question and the demands of its stakeholders.
The impact of Covid-19
Covid has shone a light on the inequalities at play and more than ever before consumers are asking businesses to act responsibly. Bieneosa highlighted the case of Boohoo and its 40% share price crash following allegations of human rights abuses in its Leicester based supply chain, which served as a firm reminder that ESG issues are at the forefront of consumers’ minds.
However, when done right, ESG considerations can be a value driver. John spoke about the misconception that behaving responsibly and delivering great financial performance are at odds, arguing that they are mutually reinforcing. Indeed, ESG is not just about risk mitigation and having a licence to operate but it can also be a value creation lever.
Covid has further reinforced that when we work together, we are stronger, and Victoria indicated how this holds true when it comes to working with suppliers to solve sustainability challenges and improve working practices up and down supply chain.
The role of communications
Communicators of today have an important role in ESG and sustainability discussions. At Centrica, Bieneosa shared how ESG specialists work alongside communication professionals to not only share sustainability stories but also look on the horizon for future risks and opportunities.
Victoria shone a light on how she and other Reinventing Responsibility practitioners work with clients to engage different groups internally and externally, joining up conversations and developing compelling narratives – testing them with different audiences so that they appeal to a variety of stakeholders.
The most valuable learning I took away is that at its core, ESG is about transparency and communication professionals are well equipped to ask the hard questions, interrogate the answers, and translate the responses and outputs for a range of stakeholders.
Find out more about our Reinventing Responsibility offering here: https://responsibility.instinctif.com/