There’s no denying which two big stories have dominated the headlines this week from an ESG perspective.
The gathering of the G7 countries’ leaders in Cornwall last weekend, and in particular their focus on commitments for aiding global recovery from the pandemic and tackling the effects of climate change, was always going to drive media scrutiny. Equally predictably, perhaps, was that while welcoming certain moves, activists would decry the promises as falling well short of what’s required.
In many of the write-ups, the UK playing the lead role amongst the G7 in being a ‘first mover’ on change became the focus. In one case, the focus was on the summit offering nothing new, rather than not enough. And of course, Boris Johnson’s taking of a plane from London to Cornwall was always going to get some extra attention.
What were the take-aways? Well, solidarity and commitment of course, but from an ESG perspective, little that businesses don’t already know, and aren’t already focused on.
Soon after though came the news that PwC would seek to expand its global workforce by a fairly eye-watering 100,000 people, in a projected $12 billon investment in meeting the demand for ESG-related advice.
Whereas to date much of the company’s work has been focused on reporting frameworks, the intention is to embed ESG factors much more broadly in its work for clients, according to Reuters.
It’s a huge commitment, and signifies the scale of the challenge businesses face in transforming, and how the focus on it only stands to grow.
If anything then, the summary is that ESG has become a highly-complex challenge for business leaders. You may say they already know that and it always has been, but the sheer scale of the challenge was underlined on an Oxford Saïd Business School webinar yesterday on Building a Better Economic System.
While the case was made for legal reform that makes broad stakeholder interests a mandatory aspect of running a business, and better alignment between the law, government policy, stakeholders and shareholders, the overriding points were about confusion and complexity.
Confusion in that reporting on performance against different types of ESG framework was ultimately highly confusing for a business’s investors. And complex in that for leaders, being able to satisfy those multiple needs, ensure understanding of transformation strategy and embed meaningful change throughout the business was complex because of the breadth and depth of the understanding.
Success against ESG parameters would need to be “built around a new code” that reflected all stakeholder interests, rather than being rooted in an original ‘code’ that served only shareholders, the audience heard.
And from a communications perspective, leaders would increasingly find themselves having to listen harder, and gain a more detailed understanding of their stakeholders.
The ESG News Review is written by Steve Earl, a Partner at BOLDT.
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