Navigating ESG: A Critical Skill for all Public Affairs Practitioners
By Ryan Anderson
Striking the right balance between business priorities and social change that satisfies all stakeholders can be a tricky path for many organizations to navigate.
Investors, employees and consumers have become increasingly vocal about their desire for the businesses they associate with to strike the right balance of environmental and social credentials.
At this year’s StratCommWorld conference being held May 1-2 at the National Press Club in Washington D.C., the topic of sustainability will be addressed in great detail to help strategic communications professionals have the tools needed to craft credible and actionable plans for highlighting an organization’s efforts related to environmental, social, governance, or ESG.
Rebecca Lowell Edwards, Chief Communications Officer at the American Civil Liberties Union (ACLU), Jane Randel, Social Impact Advisor and Co-Founder, Karp Randel, and Jerilan Greene, Principal and Founder, New Capacity Partners LLC, will engage in a panel discussion titled, Empowering the Future of ESG to provide StratCommWorld attendees with strategies and insights on the most important issues in sustainable business.
“People often think ESG and CSR are synonymous. Some people think one is like a more advanced version of the other. So, we want to make sure that we spend some time exploring how they are differentiated from one another. They are both important, but they are not the same thing.” – Becky Lowell Edwards
“I’m really pleased because I’m sitting on the panel with two women that I admire greatly,” Lowell Edwards said. “The idea of social value and what value any kind of entity should deliver, whether it’s a government entity, a publicly traded entity, or a nonprofit entity like the ACLU, should be front and center to any communicator. We are the people who have to understand those organizations and try and create understanding.”
Creating that understanding is a crucial aspect at all levels. More and more purchasing and loyalty trends are being driven by customers who prioritize ecological impact and sustainability when deciding which companies to interact with.
The principles of ESG stand in contrast to a philosophy voiced in the mid- to late-20th Century from Milton Friedman. Countering a move towards more philanthropic efforts by companies, Friedman argued that social responsibility negatively impacts an organization’s financial performance and that regulation and interference from “big government” will always damage the macro economy. Although the Friedman Doctrine likely played a role in how business was conducted in the late 20th Century, it is far from the only factor.
“The systems that we use to value those organizations have been somewhat flawed,” Edwards said. “Some people blame Milton Friedman. I’m not sure I do, but some people hold him accountable for this break of more holistic evaluation particularly of corporate entities, to the stock driven valuation. ESG was meant as a response to that so we would have a fuller sense of what a publicly traded entity should be held accountable to deliver.”
That switch in corporate accountability involved a move away from Friedman’s “bottom line is the bottom approach,” to a bigger picture view that drives how public affairs professionals at all levels engage with stakeholders.
“Rather than just looking at the share price and thinking about people who own the stock as being the beneficiaries of that entity, ESG sought to expand the expectations of what people could consider valuable outcomes from an entity, whether that’s an environmental good, whether that’s a social good, or whether that’s a role model in governance,” Lowell Edwards said.
“The more we can do to help people have the tools and the understanding of why it’s important to demonstrate more than a quarter-by-quarter earnings performance, the better off we’ll be at having these more fulsome conversations.”
Those conversations include finding ways to make consumers see an organization as taking an active role in ensuring that sustainable efforts are more than just talking points and are converted into real actions that can be measured and that benefit stakeholders at all levels.
“I try and just go back to the human-interest level. A shareholder is often potentially a neighbor to a corporation, right? They could be in the same zip code. They share roads. They share water supply. They share a lot of public goods with an entity, and they should be considering how that entity uses those resources responsibly,” she said.
The principles of ESG are applicable to for-profit and non-profit businesses alike. However, sometimes organizations will focus on one of the components more than the others.
“It’s interesting since I’m in a nonprofit, I’m mostly thinking about how companies can lean into the S (social) and the G (governance). I think when the concept of ESG first emerged, there was a lot of tension on the E (environmental). Because of the business of the ACLU, we’re particularly interested in companies feeling an obligation to lean into the social contract and also the way they think about building equity into their governance models,” Edwards said.
In addition to exploring the role of ESG, Edwards noted that the session will help to decouple some of the confusion that often arises between ESG and Corporate Social Responsibility (CSR).
“We’re planning to spend some time examining ESG and CSR and the relationship between the two because they often get conflated or confused,” Edwards said.
“People often think ESG and CSR are synonymous. Some people think one is like a more advanced version of the other. So, we want to make sure that we spend some time exploring how they are differentiated from one another. They are both important, but they are not the same thing.”
ABOUT THE AUTHOR
Ryan Anderson is a former Collegiate Sports Information Director (SID), Newspaper Editor and Reporter who currently works as a freelance journalist. He earned a Bachelor of Arts degree in Journalism from the University of Central Florida with a minor in Advertising/Public Relations. He also earned a Master of Science Degree in Sport Management from Houston Christian University. Currently, Ryan is working on a Master of Arts degree in Mass Communication with a concentration in Public Interest Communication and a Graduate Certificate in Global Strategic Communication from the University of Florida.