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The ESG News Review: The tension between environmental priorities and a post-pandemic economic recovery

Here's your round up of ESG related themes for communicators, week ending 07/05/21. Subscribe to PRmoment's weekly ESG updates below.

It has been one of those weeks when you could be forgiven for wondering what’s going on. 

That’s because the big businesses that seem to be doing most to fuel resurgent stock markets, at a time when politicians are continuing to commit to a sustainable economic recovery, are those that have had to make some of the most sizeable ESG commitments to change.

Cast your mind back little more than a year. Clients that had recently upped the ante in communicating their journeys to net-zero on carbon (and beyond) were talking to agencies about what the pandemic would mean for those targets, and what priority markets would attach to them as a recovery kicked in. The question was whether the human need for an economic rebound would put the planet’s needs on hold, at least in the short-term.

Looking at some of this week’s news, it would seem to be a fair – though fairly superficial – conclusion that the world’s need for economic recovery is what’s holding sway.

We saw an analysis piece in The Times about how big stocks in the extractives industry were largely responsible for the FTSE teetering around the 7,000 level.

Meanwhile, the Financial Times ran a story on an investor survey. It showed that despite piling on the pressure on the oil and gas sector to reduce carbon emissions and fossil fuel dependency, fewer than a fifth of investors questioned thought those companies would fulfil their net-zero ambitions.

Then came the FT’s piece on BlackRock – the world’s largest investor and chief protagonist amongst insisting on adherence to ESG standards – effectively being accused of double standards over P&G’s wood pulp and palm oil supply chain.

So have we seen some of the ESG winds change?

In short, no. Demand has been increasing in the mining sector for some time, and while like many other industry it faces significant ESG transformation challenges, any suppression of economic activity of the scale that we’ve seen through the COVID period had the potential to create a bounce in appetite, for metals in particular.

And it’s certainly no shock that investors are sceptical about whether, and how quickly, certain sectors are able to become greener. It’s just as easy to read the survey story as investors continuing to increase the pressure for sustainable business while acknowledging that not every company will be able to achieve its targets as it is to read it as investors losing faith already.

As business continues to pursue long-term strategic and sustainable change, some of which will only be achieved long after present leadership has retired, it’s natural that stories about the resurgence of sectors which seem to fly in the face of a green future will sometimes raise their heads, as will investor attitudes that are seemingly at odds with ESG investing, stakeholder capitalism and all of the reputation considerations. That’s the nature of news – something that goes against the grain, or is remarkable because it confounds expectations.

For communicators, there’s a need to see the bigger picture, no matter what gets thrown in the way. We’ve never seen the kind of long-term change that ESG ‘mandates’ before, so that bigger picture is a more distant horizon. It can be easy to lose perspective from time to time. Profound change of this breadth and depth is hard, there will be turbulence, but the ability to demonstrate sustainable progress in the areas that matter most is what’s most important.

In a report just out by the media tools specialist Vuelio, the main highlight was the growing awareness of ESG as a corporate issue but also the “opportunity for further education”. You could say that ESG topics will always create opportunities for further education, and it seemed a polite way to express that with many mountains to climb, people had better shape up fast for what lies ahead.

The report concentrated on what opportunities ESG presents for public relations and communications. It could probably have gone on a lot longer, because the possibilities are practically endless. First though, communicators need to understand all of the dynamics of ESG-driven change, all of the considerations around achieving positive change, and do what they can to foresee every twist and turn that the world may get along the way.

That is all far from easy. But committing to doing so, and keeping that bigger picture focus, holds greater potential for communications to be more valued by those in the boardroom than anything that has gone before.

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

This is a new weekly ESG column on PRmoment. The column will review the biggest ESG stories of the week, from a communications perspective.

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