The ESG Review: Can internal ESG communications counter the external turmoil?

 12th July 2023

It’s no secret that ESG has been having a rough ride in some sectors, and particularly for corporate America.

Criticism of unregulated ESG investing has grown to the point that concerns are being raised about some large companies cooling their commitments to tackling climate change, while the very acronym has become tarnished in the view of even the most prominent sustainable investors.

The picture from the recent closure of results season is actually a more mixed and complex one than the above might lead you to believe though, according to Reuters, which highlighted a growing divide between Europe and the more sceptical US this week. But it also pointed out that some companies are becoming deliberately less vocal on some ESG topics because of the advent of SEC disclosure rules.

A piece in the Financial Times this week was less optimistic, outlining why ‘green’ stocks may actually underperform comparatively, principally because of fewer media articles about the climate emergency appearing.

And according to Financial News, the furore is now impacting hiring into ESG positions, with a notable slowdown this year.

But with such external turmoil, and so much still to be proven and standardised around ESG investing, companies remaining committed to long-term purposeful change and pursuing ESG agendas despite the current investment crosswinds are redoubling their efforts to engaging employees in achieving those goals, according to a panel of experts questioned by GreenBiz.

The piece outlined how best to corral and maintain support for initiatives internally, and how to demonstrate clear results from doing so. While many sustainability heads may reference they need to involve colleagues in pursuing goals, given the current external environment their view is that internal engagement, and communication to support it, has become more important.

It cuts both ways of course, with numerous studies and surveys having floated around about the priority that potential recruits place on a company’s ESG commitments and alignment with their personal values, with this by KPMG outlining why a third of workers would turn down a job offer on those grounds.

How long it will take for ESG to regain some ground and better demonstrate returns remains to be seen, but for companies wanting to stay the course, a stronger internal focus will undoubtedly become a mainstay. As GreenBiz put it, the pursuit of those goals becomes more attractive for all employees when they understand how they help individuals, teams and the broader organisation to be more successful.

The ESG News Review is written by Steve Earl, a Partner at BOLDT.

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