What Comms pros need to know about ESG

Environmental Social and Corporate Governance (ESG) is one of the most radical developments in business within the last 50 years.

It’s likely to shape the way both organisations and the communications sector evolve and operate for years to come.

But what is ESG? How is it different from CSR? (Corporate Social Responsibility). And how is public relations adapting to the opportunities and risks?

To help define ESG and chart its growth and impact on the communications sector, Vuelio commissioned PR industry thought leaders Stephen Waddington and Dr Jon White to produce ‘The Environment, Social and Corporate Governance (ESG) opportunity for public relations’. report

It is hot off the press today and I contributed my views to the internal communication part. I welcome this report as I know Comms pros will find it useful.

Congratulations to Vuelio, Stephen and Jon for collating this useful piece of research to help us understand the scale and discover who’s doing what.

Highlights include:

  • ESG and PR sector study highlights a third (31%) of organisations have a policy in place to manage ESG, 41% said that it was a ‘work in progress’
  • Head of Communications/PR is responsible for leading ESG in 19% of organisations but ESG is led by the CEO or another C-level function within 60% of organisations
  • Over half of PR agencies polled offer ESG support to clients or are developing ESG services.

Download The Environment, Social and Corporate Governance (ESG) opportunity for public relations report.

As summed up by report authors Stephen Waddington and Dr Jon White, ESG is, at its core: “a call for companies to account for and report on their contribution beyond financial metrics within their scope of operation.”

ESG is a combination of environmental and social risks. For example, the business supply chain and its environmental impact, how employees are treated and human rights acts compliance.

It also includes business governance – from how legal issues such as bribery and corruption are monitored and managed through to ensuring that the board act fairly for all shareholders.

The complex of concerns grouped as ESG are significantly more far reaching than the Corporate Social Responsibility or CSR programmes.

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.

The investment community increasingly expects to be informed on company commitments to and actions on these concerns.

What does the report say?

A survey of 187 public relations practitioners across a range of ESG issues was conducted in April 2021, to benchmark the sector’s readiness for ESG.

According to Vuelio’s research:

  • 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 (32%) 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%) of public relations practitioners said that they had taken ‘no action to assess and manage ESG risk’

Organisations recognise that they have work to do to manage the issues raised by ESG.

The research highlighted that:

  • Three-quarters report that they are somewhat prepared (63%) or not at all prepared (12%) for ESG
  • Two-thirds of organisations (67%) reported that they do not report on their ESG performance

Chart-2-27-percent-have-no-ESG-policy-in-place Chart from Vuelio research

This is a significant opportunity for public relations to support organisations and, in some cases, lead ESG.

What is happening in your organisation? Are you having these conversations?

What is the ESG opportunity for public relations?

Calls for the establishment of new roles to develop and manage ESG strategies, such as chief relationship or chief sustainability officers, are often made without reference to the roles that have been played by public relations practitioners for many years.

Given the unique relationship in many organisations between communications and the board and the importance of managing multiple stakeholders and publics in ESG, report authors Dr Jon White and Stephen Waddington are confident that ESG will be a key discipline for corporate affairs, public affairs and public relations professionals for many years to come.

They state in the report: “It is our firm belief that ESG concerns and how they will be met present large opportunities for public relations to make a larger contribution to organisational decision-making and performance.”

The report also contains views from senior agency leaders and communications professionals and those who have developed and delivered ESG programmes.

Vuelio says: “Thank you to John Brown, Founder and CEO of Don’t Cry Wolf;  Koray Camgoz, Director of Communications and Marketing at the PRCA; Steve Earl, Managing Partner of BOLDT; David Gallagher, President of Omnicom PR; Rachel Miller, Founder of All Things IC; Mandy Pearse, President  of the CIPR; and Rebecca Zeitlin, Head of Communications and External Affairs at Hybrid Air Vehicles.”

“Attitudes to ESG are rapidly changing because of the COVID-19 pandemic” says Hybrid Air Vehicles head of communications and external affairs Rebecca Zeitlin. “Scrutiny is the single word that I’d used to describe what’s brought ESG to the fore as an issue. The pandemic has created an opportunity to think and act differently.”

For CIPR president Mandy Pearse, ESG consideration is a natural fit for public relations and should be welcomed and actioned by the industry: ‘Strategic public relations practitioners take the long view on managing the organisations’ stakeholder relationships. ESG is not a quick fix but ethically implemented with purpose and commitment it is central to delivering outstanding reputation and brand loyalty.’

I’ve highlighted the critical role of effective internal communications in ESG: “Companies need to ensure there’s no integrity gap between what they say and do as the first people to spot those gaps are your employees. Done well, your people need to see how they fit in and the difference their work can make to your ESG ambitions.”

ESG quote from Rachel Miller

Download The Environment, Social and Corporate Governance (ESG) opportunity for public relations report.

Vuelio CMO Michelle Goodall believes there is an opportunity for the PR industry to bring skills and technology together to drive and continue to develop their organisational response to ESG: “Stephen and Jon provide excellent guidance in the report. Our tools, Vuelio and Pulsar, also provide communications professionals with the media, political, stakeholder and social media issue, share of voice, horizon scanning and audience insights they need for use in decision-making in one of the fastest developing and exciting areas of the communications industry.”

Gihan Hyde

Further reading via the All Things IC blog: What is ESG and how does it differ to CSR? – featuring Gihan Hyde.

Download The Environment, Social and Corporate Governance (ESG) opportunity for public relations report.

Post author: Rachel Miller.

First published on the All Things IC blog 4 May 2021.

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