In the UK, this has been an unusual week for the public news agenda.
We’re more used to politicians wanting to bury ‘bad news’ on days when business and other stories are going to be dominating the headlines.
This week, with the Covid enquiry in full swing and a reasonable sense of who would give evidence when, it was the Government pretty much assured to be lead UK news story on certain days, and other stories effectively played second fiddle.
But the enquiry was also a stark reminder on the need for effective governance, which was what the probe was essentially digging into.
And several of the other news stories that did come out over the past week also underlined the need for effective corporate governance to deliver positive change.
The BBC, which has drawn heavy criticism from political and other circles recently over its stance in covering the Israeli-Hamas war, faces action from the Government to strengthen the way the corporation is governed, including how it handles complaints.
Yet a few days earlier, the Government announced that it would be reversing plans to compel large businesses to improve their corporate governance and auditing, something that Labour has vowed to reinstate if elected.
Investors Chronicle reported that “The draft law would have required so-called “public interest entities” – businesses with a turnover of more than £750mn or over 750 employees – to demonstrate resilience by identifying risks beyond a 12-month period and to show that they have made enough profits to justify dividends and buybacks.”
Corporate governance is in the headlines more and more. As the Financial Times put it recently, Crises show the need for better corporate governance, pointing to a year of strife in the financial services sector.
Meanwhile, as the major artificial intelligence safety conference got underway at Bletchley Park, there were warnings that large businesses needed to upgrade their levels of corporate governance to address the rise and prominence of AI.
This all contrasts starkly with the continuing doom surrounding the oft-purpoted demise of ESG as a basis for investing. The headlines continue to be clickbaity: the Financial Times recently carried ESG is beyond redemption: may it RIP, Bloomberg used The tyranny of ESG has run it course and CNN ran ESG investing is dying on Wall Street. Here’s why. Opinion pieces maybe, but they help to set the tone.
It raises a fairly obvious question: if ESG is dead in the water, why is there such a focus on improving governance, which after all is the backbone of businesses delivering on environmental and societal change commitments?
And possibly an obvious answer: because ESG is not dead, it’s the approach to existing ESG investment frameworks that’s the spanner in the works.
The notion that doing good is good for business remains, though with some scars. And regardless of how ESG metrics tie to corporate value, the big G of governance is coming to the fore, taking more of the spotlight and likely to become more prominent in reputation.
The ESG News Review is written by Steve Earl, a Partner at PR agency BOLDT.
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