The ESG opportunity for public relations

A paper by Jon White and I, published by Vuelio, examines ESG risk and opportunity for public relations practice.

The role of public relation in supporting management decision-making has been at the forefront of the response to COVID-19 for many organisations. Practitioners have supported business leaders in listening, planning and engaging with internal and external stakeholders in managing responses to the pandemic.

The crisis has accelerated many of the changes already underway in media, public engagement, and organisational communication, such as the role of communication as a strategic management function and a more human approach to communication by CEOs and management teams.

COVID-19 has also highlighted flaws in the use of financial metrics to measure the health and wellbeing of society. As society emerges from the pandemic, the need to measure corporate performance against broader metrics is an issue rising up the corporate agenda.

Investment and financial performance will drive economic recovery from COVID-19 but it will need to be balanced with Environmental, Social, and Governance (ESG) performance and risk.

Research published by Vuelio highlights the growing awareness of ESG as a corporate issue but also the opportunity for further education. It has published a report today called The Environment, Social and Corporate Governance (ESG) opportunity for public relations, researched and written by Dr Jon White and I. You can download a copy from the Vuelio website.

Vuelio found that three out of five (63%) public relations practitioners claim that they can confidently define ESG and its impact on their clients or organisation.

A third (31%) of organisations reported that they have a policy in place to manage ESG, while 41% said that it was a work in progress. More than a quarter (27%) said that they had taken no action to assess and manage ESG risk.

ESG frames of reference

The paper tackles the emergence of ESG and its implications for leadership, management, and communication. We examine the role of public relations, the developing regulatory environment and emerging frameworks. Along the way we seek out the views of practitioners and industry organisations operating in the area of ESG.

The leadership and management concerns grouped under the heading of ESG aren’t new. Companies have carried commitments to meeting broader social responsibilities for many years, acting on them with varying degrees of sincerity.

Critical commentary on corporate action on environmental concerns and social responsibility has labelled some of these actions greenwashing or misleading. Corporate commitment to the environment or social contribution is seen as masking other activities.

Corporate social responsibility has moved on from doing good works and seeking recognition for these to a realisation that corporations must demonstrate that they exist to contribute to the creation of sustainable value and broad social wellbeing.

In future the complex of concerns grouped as ESG will need to be managed together. The investment community increasingly expects to be informed on company commitments to and actions on these concerns.

We argue that issues related to ESG have been the domain of public relations and public affairs practitioners for at least 50 years. Arguments have been made over this time that management decision-making has needed to broaden to include stakeholder concerns and broad social and environmental issues.

Practical actions for public relations practitioners

ESG relates to people and the planet. There is no bigger issue. Organisations and public relations professionals should focus on the role they can play to make improvements to ESG in their own public sphere.

The paper concludes with eight area where practitioners can provide support to their organisations and clients in ESG.

1. Strategic communication planning

Failure of an organisation to meet the expectation of its public in any of the three dimensions of ESG will result in reputational and investor risk. Communication planning should not begin and end with intent but instead demonstrate a roadmap of action along with evidence of progress. It should also take a long term view and truly consider an organisation’s role within the publics that it serves.

2. Encouraging an open conversation

Public relations as an internal communication function of a corporation plays a critical role in engaging employees in the conversation about ESG. This relates primarily to understanding issues but also supporting and framing a corporation’s response. Open dialogue with internal and external stakeholders is critical to building advocacy to support long term goals.

3. Internal communications

There is an opportunity to engage employees in delivering solutions to reduce consumption in each of the areas of ESG. This includes energy, materials and waste management and addressing governance and transparency. It also provides a means of community engagement through platforms such as stakeholder panels, reference groups and volunteering.

4. Horizon scanning: listening, measuring and reacting

Key techniques in issues management include scanning and monitoring the organisation’s environment and the concerns of stakeholder groups to identify and understand issues at the earliest possible point in their development.

5. Improvements to decision-making

Thanks to public relations’ developed expertise in relationship management, knowledge of stakeholder groups and their concerns, and of techniques of issues management, practitioners have the potential to contribute to make informing decision-making at board and senior management levels.

6. Planning and stakeholder engagement

Thorough work in issues management also feeds through into planning. It makes plans more realistic, more likely to be realised, and gives fuller knowledge of what will be likely to engage stakeholders. Many critical issues related to ESG are fundamental to society and require a Government or industry level approach. Companies need to engage in wider industry decisions via trade associations and government.

7. Meaningful metrics

ESG is a strategic journey for companies. Financial markets and regulators are helping to create metrics such as SASB and SFDR. It’s a nascent area and for now companies need to adopt a framework best aligned to the organisation. BoldT, Mettle Capital, and Novisto are building datasets to enable companies, investors and markets to track performance across each of the dimensions of ESG.

8. Reporting on targets

Planned improvements to company reporting aimed at providing more complete information to investors will require more detail to be given on the steps taken to meet social and environmental obligations – how responsibilities to people, the planet and profit have been met. Public relations practitioners and the information and insights they can bring to reporting should be drawn into the process of report preparation.