When the IPCC’s last report - its second of three - on the climate emergency was published last summer, headlines screamed “code red” for days.
Yet when the report’s installment came out earlier this week, it drew similarly severe headlines, such as The Economist’s summation of a “narrowing window” to advert a climate catastrophe, but was just one big story on another day of new developments in the Ukraine war, travel chaos, political tussles and rising consumer prices.
The warnings were stark, and the context for businesses pursuing decarbonisation targets was clear, but the story did not have the impact of the last report.
The point, repeated from previous reports, was that it’s now or never for climate change. Global carbon emissions would need to peak in 2025 to limit warming to 1.5 degrees centigrade, which given the collective targets set out by major governments looks likely to be a target that will be missed by some distance.
The IPCC report, across its three aspects, provides a chilling reference point for the net zero targets that are central to many ESG commitments. It nails the United Nations’ colours to the mast around the need to chart progress around that change clearly and consistently, and frames the scientific methods and data capture that will be required to do so.
Yet even that can be open to abuse if businesses choose to use statistics to mask lack of genuine progress, some argue. As this post on Carbon Brief put it, “Providing convenient access to these resources and making them available for the world also opens a Pandora’s box of misinterpretation and inappropriate use.”
This week has also seen continued notes of caution in major business media around the foibles of ESG investing given the current broad and sometimes contradictory approach to reporting. This Financial Times piece is a must-read, not least for setting ESG investing challenges against the backdrop of a Spike Lee film. It landed this point with a big whack: “The biggest taxonomic mistake in ESG is the category itself. This creates a handy marketing tool for asset managers such as BlackRock to sell funds to customers who do not want their investments to finance bad stuff. The problem with the acronym is that it jams together disparate and sometimes contradictory objectives.”
Meanwhile, Harvard Business Review carried a lengthy article on how ESG funds have underperformed financially, with jabs such as “There’s also some evidence that companies publicly embrace ESG as a cover for poor business performance.”
As I’ve set out several times here, ESG does not have the wrong intentions, but it has some way to go in order to achieve a standardised, transparent and compatible approach to assessing stakeholder capitalism value.
Putting data-driven reporting to one side, one thing that the IPCC report’s relatively soft landing and the ongoing critique of ESG assertions does highlight is the need for communicators to be more creative in their work to share ESG-related transformation.
While few large businesses rely purely on announcing iterative data points against long-term goals, ESG-led communication is going to have to work harder to break through across the media mix. Despite the severity of the climate crisis, the world has too many things going on at once, across a fragmented environment read and listened to by an audience that is either distrusting of public information or prone to believing what crowds and peers in their social ‘bubbles’ do.
Cutting through that won’t just take ESG alignment and achievement, it will also take communications ingenuity and a mastery of the fabric of reputation. ESG communications will need broader horizons, and creative zeal over and above that used to sell products and promote brands.
The ESG News Review is written by Steve Earl, a Partner at BOLDT.
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