So the whole world has gone mad about sustainability and ESG.
It really has.
Every firm I know, in every sector, is obsessing about how they can put forward their sustainability credentials. And frankly, they are trying too hard.
What I mean is that most firms don’t have anything to brag about much on this front. Or they’re doing too much too soon.
In any other area of business, effort (and therefore cost) is assigned on the value to be derived from this investment of time and resource. But when it comes to ESG matters, you can forget all that.
Everyone’s falling over themselves to desperately find SOMETHING they can highlight on the ESG front. The more the merrier. And let’s have them all right now!
That’s just plain dumb. So why are they losing their normal commercial senses?
Those of you who know me best will be aware that I think sustainability is really important in business today. Through our various research projects on the subject, we are hearing that ESG credentials – when evidence-based, realistic and relevant – really are starting to play a fundamental role in companies’ investment and purchasing decisions.
The problem is that sustainability claims often are somewhere between ‘misguided’ and ‘utter balderdash’.
OK – so why the panic from so many corporations?
It’s because it affects the CEO and the main board… personally.
Corporate reporting standards are now mandatory in Europe, China and the United States – certainly for larger quoted companies. The SEC’s rules in the US have come through somewhat watered down, but they are nevertheless there despite much opposition.
Now – it is the CEO and the Board who have to personally present reporting and progress on these ESG criteria to the financial markets when reporting quarterlies or annual results. So they really FEEL it.
If you have to handle something personally, it becomes something you make damned sure you’re focusing on in the business. And once your company has shown that easy early-stage progress on ESG factors (and the first few stages of progress are easier), you feel cheated if it doesn’t carry on at the same sensational rate. So you put the screws on your people. And it becomes a little obsessive.
This is why so many corporates urgently need a long-term ESG reporting and communications strategy… yet virtually none do. Almost none are saying “Where do we need to be in five years’ time and what is our reporting strategy as we make that progress?” So often, it’s the CEO and the Main Board simply saying “More, more, more!”
For supposedly clever people, running eye-wateringly powerful companies, it’s extraordinarily poor judgement (or lack thereof).
It’s a staggeringly misguided approach to managing expectations… of markets, of the financial community, of colleagues, of customers. Staggering.
So – what’s to do?
A really good Head of Sustainability, in cahoots with the Director of Comms and the Strategic Market Planning chief, needs to get their ducks in a row and advise the Board, in the strongest of terms, that they need a reporting and ESG comms strategy. Show the evidence. Define more clearly what good looks like. Tell the CEO not to blow all the powder in one go, and then be left with little room for manoeuvre. Have a plan that shows steady, consistent, managed progress.
Seems simple doesn’t it?
Yet the world seems to have gone mad and lost its business brain.
Slow down.
Look at the evidence.
Do the things that make a real difference commercially – whether with customers or the financial markets.
Make a plan.
Take actions that you can sustain over time.
I hope you find these bulletins entertaining. I’m happy to discuss all relevant engagements – from customer community creation, to directorial mentoring, to strategy development, to thought-leadership content development, to full campaign structuring and management, and more.
Do get in touch!
