‘One of the comments on social media in reaction to our report, ‘The Environment, Social and Corporate Governance (ESG) opportunity for public relations’ was “actually, you lost me at ESG”,’ said Dr Jon White on our webinar with Stephen Waddington, Rebecca Zeitlin and Michelle Goodall yesterday.
While Environmental, Social and Governance is a main trend in PR in 2021, the meaning of the term is still vague for many and, as found in our recent study, two-thirds of PRs still don’t have an ESG strategy in place.
Here’s the video for those who were unable to attend the live event explaining the practicalities of ESG and the opportunities for the PR industry.
It was a wide-ranging discussion about a large and complex topic, but here are some of the key takeaways.
What is ESG?
As summed up by Dr Jon White, it’s ‘a new way of referring to a set of concerns that have been with us for many years. “The triple bottom line” is how it was referred to in the 90s.
‘ESG as a label has been in use for about 20 years now, and the term has been given new force by the Covid pandemic. It’s how business will need to adapt.’
‘ESG – that acronym explains less that any previous terms we’ve used in comms, actually,’ believes Jon. ‘We do have a real task of explaining what’s involved. Our practice loves jargon. We have to work against that as far as we can in this area, especially now…’
As summed up in the report, it is, at its core, ‘a call for companies to account for and report on their contribution beyond financial metrics within their scope of operation’.
ESG is a combination of environmental and social risks. For example, the business supply chain and its environmental impact, how employees are treated and human rights acts compliance.
It also includes business governance – from how legal issues such as bribery and corruption are monitored and managed through to ensuring that the board act fairly for all shareholders.
What is the difference between ESG and CSR?
The complex of concerns grouped as ESG are significantly more far reaching than the Corporate Social Responsibility or CSR programmes.
‘Corporate Social Responsibility is a class of initiatives that’s typically led by a marketing function,’ explains Stephen Waddington. ‘The challenge there is that it’s sometimes seen as masking other activities – it can be a veneer that doesn’t stand up to scrutiny. Fortunately, we’re moving on from that.’
‘ESG considers in the absolute whole – the financial value, and environmental and societal value, also.’
Why is ESG so much more important now?
‘ESG undoubtedly one of the primary issues facing PR at the moment,’ believes Stephen Waddington.
‘This conversation was spearheaded by the UN, but why it’s so important in the last 18 months? Covid. PR has shown itself in a leadership position to help organisations integrate with complex stakeholders through difficult transitions, like moving to working from home last March, for example.
‘Covid has highlighted flaws in the use of financial metrics to measure the health of an organisation. Everyone in society has been impacted, and that impacts how companies are managed.’
Hybrid Air Vehicle’s Rebecca Zeitlin agrees that crisis has led change:
‘Obviously, crisis is an accelerant. But even pre-Covid, we saw massive change during 2019 in how people were perceiving aviation for pleasure, for example. A lot of this was driven by climate-related concerns and humanitarian issues, right through to emissions; that critical mass was building anyway.
‘In this time of crisis, PR has become aware of its potential – it hasn’t realised it yet
Whilst there has always been socially responsible investment, there has been a marked change in the investor community and the number of investors considering ESG issues will likely lead to more complete investment analyses and better-informed investment decisions.
2020 was the year that ESG investing came of age. According to data provider Morningstar, by the end of 2020 total assets held in sustainable funds hit $1.7trillion – a 50% rise on where they started the year.
What are the risks of not engaging with ESG concerns?
‘Environmental damage, exploitation of labour – the risks are enormous,’ warns Jon. ‘A large percentage of organisations will not be prepared.
‘The opportunity for public relations is alerting those making decisions to the broader range of risks that need to be considered.
‘There’s new kind of stakeholder capitalism, new demands on management. For years, we’ve been saying that you need to consider all stakeholders, or you’re running huge risks.’
Practical advice on getting started with ESG?
Hybrid Air Vehicles is already on its ESG journey, and Rebecca had some advice for the two thirds of PR leaders who don’t yet have a strategy in place:
‘Scrutiny will be on a whole company and there are so many factors to consider – you have to find the most important ones, then maintain that framework throughout the scaling process. Pick the things that matter and work on them first; you can’t do everything at once.’
Research for the report found that ESG was led by the Head of Communications/PR in 19% of the organisations surveyed.
Should comms leaders take charge on this?
‘My argument is that PR practitioners, as senior advisers, should absolutely be involved,’ said Jon.
‘In the past, it’s true that it’s been managed by issues management external departments. I would say that’s now passe. The absolute key thing from the PR point-of-view – they should be involved in these discussions.’
Rebecca added that everyone has to be on board, company-wide: ‘Your CEO must be a figurehead for this as well and your whole organisation has to have buy-in. PR owns a lot of the relationships involved in this, but be aware that these conversations have to go beyond you.’
How can PR professionals contribute to ESG?
The ‘The Environment, Social and Corporate Governance (ESG) opportunity for public relations ’ report covers 8 ways that public relations can contribute to an organisation’s strategic response to ESG planning and risk.
Stephen pointed out that anyone attending the webinar and reading the ESG report are already contributing by raising their knowledge.
‘In the survey data, we had a whole range of responses – I think you’ve got to start small with each of the dimensions. Any organisation has to recognise the reach and opportunity it has. We put together a framework in the report where we suggested where you could become part of these conversation, ranging from strategic planning and risk assessment. This has to reside and be owned by leadership and board level. But PR as a department can be a conduit to bring stakeholders together.
‘Much of the work of ESG involves reporting within an organisation transparently and plotting the journey and framing meaningful metrics. It’s important that any metrics an organisation sets are meaningful and then held accountable to those through reporting via the comms team.’
What about ESG and the PRTechstack?
Stephen and Michelle discussed the importance of having the right tools in your PRTechstack to benchmark, scan, monitor and measure ESG concerns in the media and from various stakeholders and publics.
‘A shout for Vuelio. Your interest in this area is you provide media intelligence to help organisations understand both earned media and conversations in the public sphere as they relate to organisations. So that ‘horizon scanning’, both from a risk assessment and an operational perspective, is important.’
Michelle added ‘Pulsar [our sister platform] can provide early warning signs around issues and activism through all forms of social media, and that’s important because, particularly with a younger, more diverse audience those conversations are no longer just taking place in one or two of those social platforms. They’re taking place on TikTok, Instagram and the list goes on.’
How to get employee engagement on ESG?
‘Every organisation has values – values help staff make decisions,’ Rebecca believes. ‘We as communicators need to bring that to life; we have to help staff understand what their role is. We’re organisational glue and can help glue those layers together. I think we can also be a more visible and accessible champion for the cause – when your executives are further away, comms can make things real.’
Download The ESG opportunity for PR report by Stephen Waddington and Dr Jon White here.
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