One of the problems about writing a weekly column about ESG news is that some weeks there isn’t much news.
On the bright side, it does provide the opportunity to zone in on an article or topic that strikes a louder chord, as it points to something symbolic or more significant.
Such is the case with Andrew Ross Sorkin’s piece for the New York Times this week on boardroom diversity.
It centres on the differing responsibilities of public and private companies in disclosing information about - largely racial - diversity at boardroom level, making the point that while private companies tend to lag their public counterparts, they also face less scrutiny on diversity and can be quite content to be in that position.
It brought home to me a point that I think applies equally to many areas of the ESG spectrum: just because you aren’t measured on it doesn’t mean you shouldn’t be doing it, and effectively holding your own business to account over the way that it evolves to become a ‘better’ company.
There is the practical consideration that every good private company may find itself becoming a public company, so greater rigour and metrics are a good thing to instil. But there are many broader considerations that shape business value and reputation in the eyes of other stakeholders, chiefly employees, potential hires and business partners.
Then there is the practical consideration, as the New York Times article outlines, that start-ups and other fast-growing private companies may be able to attract more capital as investors place an increasing weight on diversity and inclusion in their investment calculus.
Businesses pursuing relevant ESG goals – so pretty much all of them – will always want to quantify how diverse the organisation is, particularly at boardroom level, and they will want to see measured progress towards applicable targets. But there’s also likely value to be gained from simply sharing information that doesn’t centre on statistics – the employee perspectives, practices and challenges of change that can all contribute to engaging storytelling.
And as PRMoment’s event this week on what makes a good ESG report heard, often the most important audiences for content and data around diversity and inclusion are internal ones, both to reassure employees that the company is pursuing a clear diversity and inclusion roadmap, and to share facts that can help them in becoming stronger external advocates.
What does this all point to then? Firstly, action to increase diversity and inclusion, in all of its forms and particularly at the very top of the business, must continue, be measured and be shared. But doing so should not stop at statistics. Of all ESG factors, diversity and inclusion is of course highly personal and emotive, and simply retelling the figures is not going to convince the people who matter most that your focus and achievements are because you cherish it as a business, as well as see value in increasing ‘performance’.
That starts with telling compelling, resonant stories within your own business, to let your credentials literally speak for themselves rather than being confined to data points.
The ESG News Review is written by Steve Earl, a Partner at BOLDT.
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